The Court of Justice of the European Union (CJEU) is asked7 does “sport” require a physical activity or physical fitness. Is a specific form of a card game a “sport”?

This UK reference from the Upper Tribunal concerns the scope of exemption for sport under Article 132(1)(m) of the VAT Directive which exempts 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.

Background

The taxpayer, The English Bridge Union Limited, is arguing that HMRC has incorrectly restricted the meaning of sport to something which involves physical activity or physical fitness.

The CJEU, on appeal from the UT, is asked if a form of contract bridge is a ‘sport’. Contract bridge is a trick playing card game played by four players in two competing partnerships with partners sitting opposite each other around a table. The game is played competitively at national and international level and the taxpayer is the national body in England.

Opinion

The Advocate General (‘AG’) noted as part of its analysis that the term ‘sport’ is not defined in Directive 2006/112. There is no EU-wide all-encompassing definition of ‘sport’. The starting point is to consider the normal meaning of the word sport and “authoritative dictionaries offer definitions in line with our intuition by clearly requiring a physical element”. The AG also noted that the VAT exemption refers to ‘sport or physical education’. The UK and Commission claim that the fact that the provision refers to ‘sport or physical education’ also implies that the term ‘sport’ also necessitates a physical element. In the AG’s view this means the two are related but this does not mean the aim of the exemption was to exclude activities with no physical element.

Looking at the wider context, the Committee of Ministers of the Council of Europe, in 1992, issued a Sports Charter which, in the definition of ‘sport’, specifically refers to ‘physical activity’. While the activities of the Council of Europe constitute a benchmark for the EU’s activities the AG went on to note that there is no indication that the EU legislature intended to establish a link between the term in the VAT Directive and that in the Sports Charter of 1992.

The AG looked at a number of definitions of “sport” and although such definitions cannot be used to exhaustively define the term ‘sport’ for the VAT exemption, they provide a good starting point. The AG identified what the definitions of sport have in common:

1. they require a certain effort to overcome a challenge or an obstacle (and are thus not purely recreational), whether that challenge is competition against an adversary or the surpassing of individual physical or mental limits,
2. the overcoming of these challenges or obstacles
   1. trains a certain physical or mental skill and
   2. thereby yields benefits for the physical or mental wellbeing of the persons engaging in the sport, and
3. such activities are usually practised not solely in a purely commercial context
4. public perception or international recognition serve as an indication pointing to the existence of a ‘sport’.

The AG stressed the cultural component inherent in the VAT Directive. While the definition of ‘sport’ is an autonomous one of EU law, sight should not be lost of the fact that many sports are regional in nature and not present throughout the EU. Hurling in Ireland or kumoterki (sleigh races) in Poland were cited as examples by the AG.

The AG’s proposed response is that to be a ‘sport’ within the meaning of the VAT Directive, a physical element material to its outcome is not necessary. It is sufficient that the activity has a significant mental element which is material to its outcome. In the case of contract bridge, the AG is of the opinion that it is a sport within the meaning of the VAT Directive. The AG added that there is a broad international acceptance of the form of contract bridge in this case as a sport, not only because the International Olympic Committee, in 1998, decided to classify it as a sport but it also has been granted Olympic status which means that it will be offered at the 2020 Olympic Games.

7. Case C90/16 – The English Bridge Union Limited v Commissioners for Her Majesty’s Revenue & Customs