Cirsa obtained important victory at Luxembourg’s Court

2012-07-30

Reading time 1:45 min

(Spain).- The Court of Justice of the European Communities decided, against the criteria applied by the Tax Agency, that the jackpots are no longer part of the volume of bingo activity for the calculation of the VAT cuota, a ruling considered by the Spanish Bingo Businessmen Confederation (CEJ) that had this same purpose as one of its main claims in tax areas within its strategic program.

IBT, a company of the casino division of Cirsa Group, lodged an administrative contentious appeal against the decision of the Regional Economic Administrative Court of Catalonia (TEARC) of not considering the jackpots excluded of the bingo business volumen when calculating the pro-rata rule of the VAT.

"Besides, TEARC applied the unfair criteria kept against all odds by the Spanish Tax Agency, which considers these quantities (in accordance with the law reserved to the players and that never achieve to be included in the assets of the businessmen) as part of the business volume of the bingo companies,” expressed the association in a press release.

In such procedure, the High Court of Justice of Catalonia, upon request by Cirsa, raised to Court of Luxembourg, as a pre-judicial matter to solve the resource, if the interpretation of the Spanish Tax Agency was according to article 11, part A, paragraph 1, letter a), of the Directive 77/388/CEE of the Council, May 17, 1977, Sixth Directive.

The judgement of the Court of Luxembourg establishes that such norm must be interpreted in the sense that, "in the case of the sale of bingo boards as the one that is object of the main issue, the consolidated tax base on the added value does not comprise the part of the price of those boards, previously set by the norm, which is allocated to the payment of the jackpots to players.”

According to that, the Court of Luxembourg decided that the articles 17, paragraph 5, and 19, paragraph 1, of the Directive 77/388, in its version modified by Directive 98/80, must be interpreted in the sense that "Member states cannot establish that, for the purpose of the calculation of the pro-rate of tax deduction on the added value, the part, previously fixed by the norm, of the sale price of the bingo boards that must be paid to players in concept of prices, is part of the business volume that has to include in the denominator of the fraction envisaged in the named article 19, paragraph 1.”

CEJ President Fernando Henar has entrusted the CEJ Technical Cabinet to ellaborate precise instructions for the better use of the Luxembourg court decision by Spanish bingo businessmen. Once approved, they will be issued by CEJ to its federated associations.