Order of the CJEU of 14 March 2024 Concerning Amusement Parks
Spaces within shopping centers where devices (amusement machines) intended for children are installed do not constitute “amusement parks,” and thus the purchase of tokens allowing access to these devices does not qualify as an entry fee to such a park. Consequently, in this situation, there is no basis for applying the reduced VAT rate (CJEU Order of 14 March 2024, C-576/23, Elite Games SRL).
Substance of the Case
The taxpayer operated a business that provided access to play devices for children, installed in specially equipped rooms located within large shopping centers. Children could use these devices by purchasing tokens from vending machines. The taxpayer applied a reduced 5% VAT rate to the revenues from these services, assuming that the fee for using such devices constituted an entry fee to “amusement parks,” which was subject to a preferential VAT rate.
The tax authorities challenged the application of the reduced VAT rate, arguing that the activity in question was not conducted in an amusement park. According to these authorities, the rooms where the taxpayer provided its services could not be considered amusement parks. Additionally, the fee was set per hour or per game, and therefore could not be deemed an entry fee to an amusement park in the conventional sense of the term.
The case was brought before the national court, which expressed doubts as to whether the taxpayer’s activities could be classified as services granting access to amusement parks within the meaning of Point 7 of Annex III to the VAT Directive, potentially qualifying for a reduced VAT rate.
CJEU’s Position
In its order, the Court of Justice of the European Union held that a designated area within a shopping center where amusement machines for children are installed cannot be equated with the concept of “amusement parks.” This term presupposes the existence of a “built environment,” i.e., an area of land specially adapted to house equipment intended for recreation and entertainment. Therefore, according to the CJEU, a mere designated space located in a given venue does not meet this criterion.
As a result, the services in question involving entertainment spaces within shopping centers do not fall under the aforementioned point of the VAT Directive’s annex and, consequently, do not qualify for the preferential VAT rate.
This order is another ruling in which the Court has interpreted the concept of “amusement parks” (previously addressed in the CJEU judgment of 9 September 2021, C-406/20 Phantasialand). It is noteworthy that the Court found that the question referred for a preliminary ruling was sufficiently clear in light of the CJEU’s existing case law and did not require a formal judgment (i.e., an order was deemed sufficient).