EU court rules learning to swim is not education

In Dubrovin & Tröger GbR – Aquatics, VAT case C‑373/19, the European Court of Justice (CJEU) ruled that a business operating as a swimming school was not providing education similar to that provided by a university or school. Its supplies were not exempt and had to be standard rated.

Dubrovin & Tröger GbR – Aquatics was a German partnership that ran a swimming school for children.

• It took the view that the services were VAT exempt.
• The German tax authorities disagreed, assessing the supplies to VAT at the standard rate.
• The German Finance Court found that the teaching of basic swimming techniques did constitute school education.
• The tax authorities appealed to the Federal Finance court who referred the matter to the CJEU.

The key questions were:

• Does the concept of school or university education also include swimming tuition?
• Could the partnership be treated as having the same educational aims as bodies governed by public law, such as those that have as their aim the provision of children’s or young people’s education, school or university education, vocational training or retraining, by virtue of the fact that it provided tuition which enabled participants to learn a basic skill (swimming).

The CJEU found that the VAT exemption did not apply.

• While the swimming tuition was of undoubted importance and in the general interest, it constituted specialised tuition provided occasionally, which does not amount in itself, to the transfer of knowledge and skills covering a wide and diversified set of subjects, or to their furthering and development, which is characteristic of school or university education.

Comment

Since the UK left the EU it is no longer bound by the decisions of the CJEU. HMRC currently allows a sole trader or partnership to treat education in subjects normally taught in universities and schools as exempt from VAT and swimming is commonly taught in primary schools in the UK. It will be interesting to see whether HMRC takes account of this decision, especially as it will be the first opportunity for them either follow or depart from a CJEU decision on VAT since Brexit.

Useful guides on this topic

Education & VAT
What rate of VAT applies to education? What sort of services are classed as education? What do you do if you have multiple supplies including education? What cases are there on VAT and education?

Mixed supplies: Single or Multiple supply?
Is a mixed supply a single or multiple supply for VAT purposes? What tests and case law apply?

External link

Dubrovin & Tröger GbR – Aquatics, VAT case C‑373/19