New view of VAT liability as regards the letting of sports premises

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PwC-skatteradgivning-Percent-3-solid_0002_burgundyThe Swedish Tax Agency has recently published a written guidance which could result in a major impact on VAT for real estate owners letting sports premises and for sports clubs letting or owning their own sports facilities via a company.

We previously wrote about the Administrative Court of Appeal’s rejection of the VAT reporting of sports facilities operated by Friskis & Svettis (sv: Bakslag vid momspliktig uthyrning av idrottslokaler). The Tax Agency has, on the basis of this decision, published a written guidance addressing the demarcation of non-VAT liable rental of sports premises contra VAT liable short-term rental of sports premises and facilities.

Previously, the general legal view had been that the renting of sports premises incurred 6 percent VAT when the premises were let out on a short-term basis for sporting activities. The term “short-term basis” implied, according to the legislator, in principle all sports and athletic activities taking place in the premises or in the facilities for which a fee was charged. It is only when the sports premises were let out exclusively, and during a long period of time, to one tenant that the letting was seen to comprise non-VAT liable renting.

The Tax Agency is now of the opinion that the statements in the preparatory work to the law no longer apply and that in letting sports premises an assessment of each premise and of each individual tenant is to be made to determine whether the letting comprises non-VAT liable letting or VAT liable short-term letting of sports premises. The Tax Agency’s new view here implies that the real estate owner letting one and the same sports premise at the same time to two different clients can, as regards one tenant, be seen to undertake non-VAT liable letting operations while, in letting to the other client, the real estate owner can be seen to provide a VAT liable sporting service.

An example of circumstances which, according to the Tax Agency, can argue that it is a case of non-VAT liable letting is when there is a long letting period, when compensation is paid in the form of fixed, monthly rental amounts and when the landlord is not present in the premises.

The Tax Agency states they, normally, will apply their new opinion from 1 January 2016.


The Tax Agency’s new position here implies that a number of cases where the letting of sports premises and facilities was previously seen to be liable for VAT, can now be seen to be VAT-free. This can lead to negative VAT effects for real estate owners with the right to deduct VAT and can, in turn, impact many sports associations, schools and other organisations letting sports premises. Not the least, this can have a major effect on the sports associations who own their own facilities via a company.

It should be noted that the Friskis & Svettis decision leading to the Tax Agency’s changed view has been appealed in the Supreme Administrative Court and has not, to date, come into effect. Consequently, it is notable that the Tax Agency has already announced its changed position in this context. Still, the new position implies that it is important for real estate owners, sports associations, etc., letting or letting out sports facilities to review existing contracts and how they will be impacted by the Tax Agency’s new view on this matter.

Do you have any questions on Value Added Taxes, customs and excise duties?

Henrik Ivarsson

Henrik Ivarsson

Henrik Ivarsson arbetar med momsfrågor på PwC:s kontor i Kristianstad.
010-212 85 25
Henrik Ivarsson works with Value Added Taxes at PwC's Kristianstad office.
+46 10 212 85 25

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