Culture

V4.176 Exemption—cultural services

EU legislation

The exemption for cultural services is derived from Directive 2006/112/EC, art 132(1)(n)1, which exempts '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'. The term 'bodies' in this context does not exclude individuals. The fact that the exemption is covered by the general heading 'Exemptions for certain activities in the public interest' does not mean that a commercial enterprise is automatically excluded from exemption, although member states may impose conditions which have that effect2.

A tribunal3 has held that the European provisions have direct effect, with the result that VAT incorrectly accounted for as output tax prior to the introduction of the exemption in the UK (June 1996) is repayable, subject to unjust enrichment (see V5.159B) and partial exemption (see V3.460) considerations. However, on appeal by HMRC, the Court of Appeal referred the case to the CJEU4. The questions referred were:

'Are the terms of Article 13A(1)(n) of the Sixth Directive, in particular the words “certain cultural services”, sufficiently clear and precise such that Article 13A(1)(n) is of direct effect so as to exempt the supply of those cultural services by bodies governed by public law or other recognised cultural bodies, such as the supplies made by the Respondent in the present case, in the absence of any domestic implementing legislation?

Do the terms of Article 13A(1)(n) of the Sixth Directive, in particular the words “certain cultural services”,

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