VAT treatment of green fees charged by member-owned golf clubs to non-members

Purpose of eBrief

This eBrief sets out Revenue’s position following the recent judgment of the European Court of Justice (CJEU) in the Bridport & West Dorset Golf Club Limited case (C-495/12). The issue in dispute centred on Article 132.1(m) of the EU VAT Directive (112/2006/EC) that provides exemption for the supply of certain services closely linked to sport or physical education by non-profit making organisations to persons taking part in sport or physical education. The question before the CJEU was whether the supply of golf facilities by non-profit making clubs to visitors could also benefit from this exemption. The CJEU found that green fees received by non-profit making organisations from non-members could benefit from the Article 132.1(m) exemption.

Direct application of the European Court of Justice Decision to Ireland

Green fees charged by non-profit making organisations, such as member owned clubs, to visitors have to date been liable to VAT at the second reduced rate of 9%. Revenue accepts that as a consequence of the recent CJEU decision (C-495/12), green fees charged by member owned clubs to non-members should be treated as exempt from VAT. While the Value-Added Tax Consolidation Act 2010 (VATCA) provides for taxation of green fees by member-owned golf clubs, the clubs concerned may treat non-member green fees, including the green fee element of competition fees, as exempt from VAT with effect from 1 January 2014. The legislation will be amended at the next available opportunity. Member-owned clubs whose non-member green fees are exempt will no longer have an entitlement to a credit for VAT incurred on their inputs in relation to such fees and input credits related to such fees should be adjusted accordingly.

Retrospective application of the European Court of Justice Decision

The decision of the CJEU, which has direct effect, may be relied on by non-profit making organisations for past VAT periods, subject to the 4-year time limit for making claims. Valid claims for refunds for past periods that rely on the CJEU case must contain the following for each VAT period:

1. the grounds on which the refund is claimed, and
2. a computation of the amount of the refund claimed by setting out adjustments to both output and input VAT.

Claims for refund should be preceded by a compliance review since any Revenue examination of a refund claim will include a review of all VAT obligations.

Protective notices that simply reference the CJEU judgment are not valid claims. Revenue has to date received a number of protective notices.

Revenue is examining the implications of the CJEU judgment in relation to 2013 and earlier years. In making refunds to member-owned clubs, Revenue must consider whether the refund would unjustly enrich the club. VAT by its nature is a tax on consumption: the consumers in the current context are the persons who paid the VAT-inclusive green fees. The VAT Consolidation Act specifies circumstances in which a refund of an overpaid amount may result in the unjust enrichment of a claimant. The circumstances include the extent to which the overpaid amount was, for practical purposes, passed on by the claimant to other persons in the price charged. Revenue has met with the Golfing Union of Ireland (GUI) as part of this examination and will consult further with the GUI before issuing guidance on the position for 2013 and earlier years.

Further Information

Enquiries regarding any issue contained in this eBrief should be addressed to the Revenue District responsible for the taxpayer's affairs. Contact details for all Revenue Districts can be found on the Contact Details Page.

31 January 2014