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EU legislation

The exemption for cultural services is derived from Archived Directive 2006/112/EC, art 132(1)(n), which exempts 'certain cultural services and goods closely linked thereto supplied by bodies governed by public law or by other cultural bodies recognised by the Member State concerned'. The term 'bodies' in this context does not exclude individuals. The fact that the exemption is covered by the general heading 'Exemptions for certain activities in the public interest' does not mean that a commercial enterprise is automatically excluded from exemption, although member states may impose conditions which have that effect¹.

A tribunal² has previously held that the European legal provisions have direct effect, with the result that VAT incorrectly accounted for as output tax prior to the introduction of the exemption in the UK (June 1996) is repayable, subject to unjust enrichment (see V5.159B) and partial exemption (see V3.460) considerations. However, on appeal by HMRC, the Court of Appeal referred the case to the CJEU³. The questions referred were:

'Are the terms of Article 13A(1)(n)