How The 2022 EU VAT Directive Affects The Equestrian Sector

The VAT (Value Added Tax) legislation of the Member States of the European Union, including setting the VAT rates, is based on the European VAT directive 2006/112/EC. Member States cannot arbitrarily decide which VAT rates are applied to which type of goods including when it comes to reducing the VAT rate on certain products. To do this, Member States must adhere to an exhaustive list of concrete goods and services as set out in thatVAT Directive . Reducing VAT rates on certain products is often used politically to encourage the purchase of such goods and services.

On April 5, 2022, the EU Council adopted a directive[1]  (Directive) – which entered into force on April 6^th 2022 -  that allows for a fundamental overhaul of the existing VAT rates in all Member States which has a big impact on the equestrian sector. The new VAT rules can be applied from the date of entry, except from the application of reduced VAT-rates to sports events, theathers and live streaming of shows, which will be applicable on the 1^st January 2025.

Below is an explanation of what this revision actually entails, what the general impact of the directive could be and how it might affect the equestrian and sports sector.