When it comes to VAT
VAT challenges for sports clubs in the digital age
Modern technology is being used more and more by the sports industry to enhance the fan experience and build stronger connections with supporters. Consider accessing live match streams, reviewing key highlights, and the use of apps. Apps are also making it easier for users to buy things within the app, like digital products, services, or merchandise, through what are known as 'in-app purchases.'
The provision of these digital services presents significant considerations regarding Value Added Tax (VAT), arising from dedicated EU VAT regulations governing digital services. Under this legislation, (among other things) the following is determined:
In summary, with specific reference to supporters (B2C market), EU VAT legislation requires that VAT on these services be paid in the country of residence of the supporter. In other words, while modern information technology is making it increasingly easy to sell services to supporters outside the Netherlands, this poses a challenge in terms of VAT. In many cases, the club is liable for foreign VAT obligations. This also requires the club to remain informed about the relevant VAT rates in different countries. Administrative procedures must be adapted accordingly.
Additionally, it is widely recognized that these services are rarely offered directly between a club and a supporter. Instead, digital services are typically delivered through a series of various providers. This is particularly important because some parties must provide turnkey platforms equipped with the digital infrastructure required to sell these services and process payments. Such chains are frequently extensive and span multiple jurisdictions. In these circumstances, it can be challenging—if not unfeasible—to ascertain the point at which services are ultimately delivered to end users and to identify the party responsible for accounting for VAT on those transactions. Because of this, EU VAT law includes a "commissionaire" fiction, which specifies who in the supply chain should be considered the supplier to the final consumer (and therefore responsible for paying the VAT). It is no secret that the club typically does not qualify as that supplier. Although the fiction simplifies matters, it is often challenging in practice to decide whether it applies.
It is, therefore, unsurprising that such matters are frequently subject to litigation. The Court of Justice of the European Union (CJEU) has issued several rulings clarifying the interpretation and practical application of this legislation. These rulings clarify that foreign VAT is generally due, and that the aforementioned (commissioner) provision frequently applies to digital services, such as in-app purchases and streaming platforms. For the clubs, this generally implies that (a) Dutch VAT is typically not applicable, while foreign VAT may apply, and (b) responsibility for remitting this foreign VAT rests with another party. In the event of an audit by the Tax and Customs Administration, it is essential to provide clear evidence and justification for not applying Dutch VAT to the sale of these services.
It is therefore essential to test one's own business case and the way in which digital services are offered against EU VAT legislation and its interpretation by the CJEU. By doing so, you minimise the risk of unforeseen issues and ensure accurate VAT payments across all countries where your services are provided.
If you have any questions about how VAT applies to digital services or want to know how your situation aligns with recent case law, please don't hesitate to reach out to us.
If you have any questions about this topic or if you would like to discuss the topic further, please do not hesitate to contact us at info@vatpartners.com
14-09-2025 - Tax authorities in Member States are increasingly encountering incidents of fraud and non-payment of VAT, which may arise from issues such as liquidity constraints. As a result, there has been a clear increase in the number of VAT liability cases over the past decade, as well as in the number of VAT fraud cases.
Read more07-09-2025 - VAT and Transfer Pricing. At first glance, two subjects that seem unrelated. This has also been the approach taken in practice for decades. However, a discussion on the correlation between these two topics has been emerging for some time. The key question is: do adjustments based on Transfer Pricing rules have an impact on VAT?
Read more04-09-2025 - VAT and Transfer Pricing. At first glance, two subjects that seem unrelated. This has also been the approach taken in practice for decades. However, a discussion on the correlation between these two topics has been emerging for some time. The key question is: do adjustments based on Transfer Pricing rules have an impact on VAT?
Read more06-08-2025 - If the supplier has agreed an intra-Community supply with the buyer, but the buyer decides to transport the goods to a country outside the EU instead of to another Member State, the 0% VAT rate can still be applied. In that case, the 0% VAT rate intended for export transactions applies.
Read more