Exemption from VAT on cultural services. Can the article of the European VAT Directive be relied on directly? Judgment of the ECJ of February 15, 2017. BFI.


Article 13 (A) (1) (n) of Directive 77/388/EEC (formerly the Sixth Directive), which exempts certain activities in the public interest, sets out the exemption for “certain cultural services and goods closely linked thereto supplied by bodies governed by public law or by other cultural bodies recognised by the Member State concerned”.

In particular, the United Kingdom only transposed this provision, without establishing a list or definition for “certain cultural services”. In this sense, the British Film Institute (BFI) is a non-profit organization dedicated to the promotion of cinema in the United Kingdom, who sold tickets for projections with VAT. However, on the basis of a direct application of Article 13 of the Directive, it claimed the VAT corresponding to the sale of the ticket that constituted cultural services exempt from VAT. This claim was dismissed by the British Tax Administration, although subsequently accepted by appeal by the courts. However, in the light of the appeals presented by the Tax Administration before the Court of Appeal, that body refers a question to the Court of Justice of the EU as to whether Article 13A (1) (n) of the Sixth Directive, and in particular the expression “certain cultural services”, can be interpreted as having direct effect in the absence of national transposition rules.

Based on the jurisprudence of the ECJ, the Court replies that it can be directly invoked before the national bodies against the State all those provisions that are not subject to any condition and are sufficiently precise. However, as regards the term “certain cultural services”, it does not specify what cultural services are required to be exempted by the Member States, since it does not contain an exhaustive list of cultural services or the obligation to exempt them all, but only certain supplies, allowing Member States the ability to decide which cultural services are exempt. In that sense, a broad interpretation covering all the provisions of cultural services does not fall within the term “certain”, and the case-law states that the terms for the exemptions laid down in the Directive must be interpreted restrictively.

Finally, it should be borne in mind that the legislator did not opt for the European Commission’s proposal to draw up an exhaustive list of exempted cultural services, but instead opted for a wording allowing Member States to determine over what cultural services the exemption applies.

Consequently, in so far as that provision allows Member States to determine which provision of cultural services are exempt from VAT, the conditions for being able to rely on it directly are not fulfilled where it has not been transposed into national law.

A copy of the judgment with case number C-592/15 is attached.

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