Golf clubs across Ireland are in line for a windfall as the Revenue Commissioners this week confirmed that many can rely on a recent European Court of Justice decision to claim back VAT paid on green fees over the past four years.
The court found late last year that levying VAT when non-members pay green fees at member-owned clubs was not in line with EU law.
The case involving Bridport & West Dorset Golf Club in England has changed rules for affected golf courses in countries governed by the EU VAT Directive, including Ireland.
In an “eBrief” on its website, Revenue says it “accepts” the ECJ decision means that green fees charged by member-owned clubs to non-members should be treated as exempt from VAT.
This means such fees will not attract VAT, while “the legislation will be amended at the next available opportunity”, according to Revenue.
Membership fees are already VAT-exempt.
The tax authority also notes that claims can be made under the auspices of the ECJ decision for the past four years, thus potentially opening the door for a windfall to member-owned clubs.
Implications
It points out, however, that it is still examining the implications of the ECJ judgment in relation to 2013 and earlier years.
Depending on the period, the rate of VAT paid would have been either 9 or 13.5 per cent in the Republic and 20 per cent for clubs in the North, where the same rules apply.
Revenue will consider whether refunds might unjustly enrich a club, taking account of VAT's status as a consumption tax and the fact it was the golfer rather than the club who paid the tax.
"Revenue has met the Golfing Union of Ireland as part of this examination and will consult further with the GUI before issuing guidance on the position for 2013 and earlier years," the Revenue document says.
About 300 golf clubs in Ireland are member-owned. The remainder which are commercially-owned, are not affected by the ECJ judgment.
Pat Finn, general secretary of the GUI, said it was unclear how many clubs would seek VAT refunds.
Refund requests must include adjustments to credits previously claimed against VAT, a factor that could dissuade some potential applicants because it would be typical for courses to offset VAT paid on green fees against VAT due in other areas.
Revenue also points out that claims must be preceded by a “compliance review” because the authority’s examination of a refund claim will include a review of all of the club’s VAT obligations.
