The Minister for Medical Care has introduced the subsidy scheme to encourage the construction and maintenance of sports facilities published in the Government Gazette.
€87 million
In 2019, no less than €87 million will be allocated to this grant fund. The grant is awarded to amateur sports organisations for the purchase and maintenance of:
- sports facilities (i.e. facilities intended for and used for amateur sporting activities);
- sports equipment (equipment intended to support amateur sport).
The grant will only be awarded for activities commencing on or after 1 January 2019. The decision does not contain any information on how investments started in or before 2018 will be dealt with.
The grant fund is allocated on a “first come, first served” basis. Once the grant ceiling of €87 million has been reached, new applications for that year will be rejected.
Operate for at least 10 years
The grant recipient must ensure that the subsidised sports facility remains available for amateur sport for local users for at least 10 years. This period begins at the end of the grant period. The grant decision does not specify the consequences of failing to meet this condition (must the grant then be repaid in full or only in part?)
Grant
The grant amounts to 20% of the eligible costs (including VAT). Eligible costs are the investment costs associated with the purchase and maintenance of sports facilities and equipment.
No grant is awarded for investments of less than €5,000. The maximum grant per calendar year is €2,500,000.
An additional grant of 15% is awarded for the activities listed in the annex to the decision. This relates, on the one hand, to specifically described investments aimed at environmental protection and/or energy saving. In addition, the supplementary grant is awarded for investments aimed at improving the accessibility of sports facilities for people with disabilities.
VAT
The subsidy scheme is designed to compensate for the loss of the VAT deduction on sports facilities. This is a consequence of the necessary broadening of the VAT exemption for sport, as required by European case law. See our article Commercial sport remains in VAT. The abolition of this VAT exemption and the associated transitional arrangement will most likely form part of the tax plans for 2019 to be published on Prinsjesdag 2018
No grant will be awarded for costs in respect of which the amateur sports organisation is entitled to a VAT deduction. This applies, for example, to canteen costs, if and insofar as the canteen is operated subject to VAT (see our memorandum Tax liability of foundation and association). However, the canteen, which is exempt from VAT, is also highly unlikely to be eligible for a grant. After all, the question is whether the canteen is sufficiently dedicated to supporting the practice of amateur sport.
The grant recipient must also ensure that the investment does not give rise to any right to deduct VAT. This obligation applies throughout the 10-year review period applicable in relation to VAT deduction. For example, the investment must not be transferred to a profit-making entity within the review period. Such a commercial entity is entitled to deduct VAT.