The English Bridge Union (EBU) charges participants of its competitions entrance fees, paying VAT on these fees. The body sought to challenge this VAT imposition in the UK’s Upper Tribunal Court, who referred to the Court of Justice whether duplicate bridge should be considered a sport for VAT purposes.
The supply of certain services closely linked to sport by non-profit making bodies to participants is exempt from VAT under Article 132(1)(m) Directive 2006/112/EC. The EBU argued that bridge constitutes a sport for reasons including its competitive nature and the fact that the activity was beneficial for mental and physical health. Indeed, this approach was adopted and endorsed by Advocate General Szpunar who suggested that sport was intended to be understood as the ‘training of mental or physical fitness in a way that is generally beneficial to the health and well-being of citizens’.
The Court of Justice, however, focused on the negligible physical element involved in competing in bridge. The court held that, if there does not appear to be a physical element to the activity, its benefits and competitive nature, whilst important, are not sufficient in establishing the activity as a sport.
Whilst an EU-wide, all-encompassing definition of sport does not exist, in its ruling, the Court of Justice considered the usual meaning of sports, the context of the directive and the purposes of the rules of which it is a part. In answering its first question, the Court of Justice found that sport is characterised by a not negligible physical element of sport, which bridge does not appear to have.
The context was examined as the directive intended to incorporate the usual meaning of sport, not activities that may be associated with the concept. Lastly, the purpose and objective of Article 132(1)(m) was to encourage and promote participation by large sections of the population in activities closely related to sport.
It is interesting to note the strides made by the EBU in gaining acceptance and consideration as a sport. In 1998, the International Olympic Committee classified it as a sport. Additionally, the Global Association of International Sports Federations (GAISF) has accepted bridge as a sport.
Whilst the Advocate General and a number of organisations do consider bridge a sport in its usual meaning, the European Court has gone the other way. Bridge may not be considered a sport for VAT purposes, but the Court of Justice has, as a result, left the door open for bridge to benefit from the VAT exemption available for ‘cultural activities’.