Canterbury Hockey Club and Canterbury Ladies Hockey Club v The Commissioners for Her Majesty’s Revenue and Customs.
Date: 2008-10-16
15. The Sixth Directive confers a very wide scope on VAT comprising all economic activities of producers, traders and persons supplying services (see, among others, Case 348/87 Stichting Uitvoering Financiële Acties  [1989] ECR 1737, paragraph 10). However, Article 13 of the Sixth Directive exempts certain activities from VAT.
16. The exemptions provided for in that article constitute, according to the case-law of the Court, independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (see, particularly, Case C‑284/03 Temco Europe  [2004] ECR I‑11237, paragraph 16; Case C‑498/03 Kingscrest Associates and Montecello  [2005] ECR I‑4427, paragraph 22; and Case C‑434/05 Horizon College  [2007] ECR I‑4793, paragraph 15).
17. The terms used to specify the exemptions under Article 13 of the Sixth Directive are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all supplies of services for consideration. However, that requirement of strict interpretation does not mean that the terms used to specify those exemptions should be construed in such a way as to deprive them of their intended effect ( Temco Europe , paragraph 17, and Horizon College , paragraph 16). They must be interpreted in the light of the context in which they are used and the scheme of the Sixth Directive, having particular regard to the underlying purpose of the exemption in question (see, to that effect, Temco Europe , paragraph 18, and Case C-428/02 Fonden Marselisborg Lystbådehavn  [2005] ECR I‑1527, paragraph 28).
18. Article 13A of the Sixth Directive relates to the exemption from VAT of certain activities in the public interest. That exemption does not cover every activity performed in the public interest, but only those which are listed in that provision and described in great detail (Case C‑401/05 VDP Dental Laboratory  [2006] ECR I‑12121, paragraph 24, and Horizon College , paragraph 14).
19. As regards sport and physical education, as activities in the public interest, the exemption under Article 13A(1)(m) of the Sixth Directive is intended to encourage those types of activities but is not a general exemption of all supplies of services linked to them (see Case C‑246/04 Turn- und Sportunion Waldburg [2006] ECR I‑589, paragraph 39).
21. First, the services closely linked to sport or physical education must be supplied by an organisation covered by Article 13A(1)(m) of the Sixth Directive. Thus, for the services in question to be eligible for exemption under that provision, it is essential that those services be supplied by a non-profit-making organisation. As is clear from the order for reference, that requirement may be treated as satisfied in the main proceedings.
22. Second, the services supplied by such organisations are eligible for exemption, as transactions in the public interest, provided that they are closely linked to sport or physical education and are supplied to persons taking part in sport or physical education. Moreover, it follows from the first indent of Article 13A(2)(b) of the Sixth Directive that supplies of services covered by Article 13A(1)(m) may be exempted only if they are essential to the transaction exempted, namely sport or physical recreation.
27. However, Article 13A(1)(m) of the Sixth Directive is not intended to confer the benefit of the exemption under that provision only on certain types of sport but covers sport in general, which also includes sports necessarily practised by individuals in groups of persons or practised within organisational and administrative structures put in place by unincorporated associations or corporate persons, such as sports clubs, provided that the requirements set forth in paragraphs 21 and 22 of the present judgment are fulfilled.
30. It follows, besides, from that interpretation that the exemption for transactions effected by undertakings or organisations mentioned in Article 13A(1)(m) of the Sixth Directive would not benefit certain persons who participate in sport solely because they participate in it within a structure managed by a club. That interpretation would not be consistent with the principle of fiscal neutrality, inherent in the common system of VAT, in compliance with which the exemptions provided for in Article 13 of the Sixth Directive must be applied (see, to that effect, Case C‑283/95 Fischer  [1998] ECR I-3369, paragraph 27). In fact, that principle precludes, in particular, economic operators who effect the same transactions being treated differently in respect of the levying of VAT (see, to that effect, Case C‑216/97 Gregg  [1999] ECR I‑4947, paragraph 20). It follows that that principle would be disregarded if the possibility of invoking the benefit of the exemption under Article 13A(1)(m) of the Sixth Directive depended on the organisational structure particular to the sporting activity practised.
34. In the main proceedings, it is for the national court to determine, having regard to all the circumstances in which the transaction in question takes place in order to identify its characteristic features (see Case C‑231/94 Faaborg-Gelting Linien  [1996] ECR I-2395, paragraph 12, and Case C‑150/99 Stockholm Lindöpark  [1991] ECR I‑493, paragraph 26), whether the services supplied by England Hockey to the Hockey Clubs are closely linked and essential to sport, whether the true beneficiaries of those services are persons taking part in sport, and whether or not those services are intended, basically, to obtain additional income for England Hockey by carrying out transactions which are in direct competition with those of commercial enterprises liable for VAT.
38. In that regard, the different categories of activities which are to be exempted from VAT, those which may be exempted by the Member States and those which may not, as well as the conditions to which the activities eligible for exemption may be made subject by the Member States, are specifically defined by the content of Article 13A of the Sixth Directive (Case C‑144/00 Hoffmann  [2003] ECR I‑2921, paragraph 38).
39. The possible restrictions on the benefit of the exemptions provided for by Article 13A of the Sixth Directive may be imposed only in the context of the application of paragraph 2 of that provision (see Hoffmann , paragraph 39). Thus, when a Member State accords an exemption for certain services closely linked to sport or physical education supplied by non-profit-making organisations, it may not make that exemption subject to conditions other than those laid down in Article 13A(2) of the Sixth Directive (see Case C‑124/96 Commission  v Spain  [1998] ECR I‑2501, paragraph 18). Since that provision does not lay down restrictions as regards recipients of the services in question, the Member States have no power to exclude a certain group of recipients of those services from the benefit of the exemption in question.