On 22 January 2015, the European Court of Justice ruled that – having regard to the facts cited in this (Belgian!) case – the act of making a football stadium available does not qualify as letting of immovable property.
The fundamental characteristic of the concept of ‘letting of immovable property’ lies in conferring upon the other party to the contract, for an agreed period and for payment, the right to occupy property as if that person were the owner and to exclude any other person from enjoying such a right. In Belgium, such letting is as a general rule VAT-exempt and denies the recovery of input VAT on related investments.
However, to have this (VAT-exempt) letting of immovable property, all the conditions characterising that transaction must be complied with. If one of the conditions is not fulfilled, the transaction should – by default – be taxed and allow for input VAT recovery.
The ECJ’s judgment is of relevance not just for sports facilities but may also be so for other types of real estate with multi- and even single-user arrangements in both the private and (semi-)public sector. A matter to monitor closely!
For more information, please do not hesitate to contact your local PwC adviser.
Source : http://curia.europa.eu/juris/document/document.jsf?text=&docid=161607&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=222925