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On 1 January 2019, the Subsidy Scheme to Promote the Construction and Maintenance of Sports Facilities (BOSA) came into force. This scheme was established following the extension of the VAT exemption for sport. As a result of this extension, sports organisations are no longer eligible for VAT deduction on investments and costs through a tailored legal structure. The VAT benefit that the government consequently enjoys is channelled back into sport. This is done by[1]:
- local authorities: via the Specific Grant for the Promotion of Sport (SPUK);
- sports facilities: via the Scheme to Promote the Construction and Maintenance of Sports Facilities (BOSA).
It is not possible to obtain a BOSA grant for matters for which the local authority has already received a subsidy from the SPUK.
The BOSA Incentive Scheme, together with its annex and explanatory notes, was published in the Government Gazette of 20 July 2018 (No. 40859).
The Framework Scheme for Subsidies from the Ministries of Education, Culture and Science (OCW), Social Affairs and Employment (SZW) and Health, Welfare and Sport (VWS) applies to this scheme, with the exception of those parts of that framework scheme referred to in Article 3 of the BOSA Incentive Scheme.
The scheme is administered by the Agency for the Administration of Grants to Institutions (abbreviated as: So-I): www.dus-i.nl.
Grant amount
The scheme comprises the following two grants:
- 20% of the costs, including VAT, of eligible activities (see below);
- increased by up to 15% of the costs associated with measures[2]:
- as part of energy-saving measures;
- to improve accessibility.
The maximum grant per calendar year is: €2,500,000[3].
Grants of less than €5,000[4] are not provided[5]. However, as applications for grants of less than €125,000 are submitted retrospectively, it is possible to accumulate several smaller amounts and thus still qualify for the grant.
No grant will be awarded if the costs of the eligible activities are subject to VAT deduction (see footnote 6 on catering activities at a sports facility).
A national subsidy cap applies to the scheme. For 2019, this amounts to €87 million. The available funds will be allocated in the order in which applications are received.
PLEASE NOTE: an application submitted late in the calendar year may result in that application not being approved because the grant ceiling has been exceeded.
Grants are available for activities commencing on or after 1 January 2019.
The grant is awarded for a maximum of three years. The Minister may grant an exemption from this period for up to one year.
The eligible activities are:
- the construction or maintenance of sports facilities;
A sports facilities is a facility intended for, and used in, activities relating to amateur sport.[6]
Whether an organisation is an amateur sports organisation is determined on the basis of the SBI code[7].
- the purchase or maintenance of sports equipment.
Sports equipment These are items intended to support amateur sport. The examples given in the explanatory notes to the scheme include: climbing frames, trampolines and goals, but also, for example, the purchase of new balls, discuses or mats. The costs of gas, water or electricity are NOT included in the definition of ‘sports equipment’.
The explanatory notes provided by Dus-I list the following as (examples of) activities that ARE eligible for funding:
- sports equipment (such as a goalkeeper’s kit or athletics track equipment);
- renovation costs for sports facilities;
- certificates, licences and medals;
- operating costs, provided they relate to the sporting activity (for example, the hiring of maintenance staff);
- lease, purchase or ground rent costs relating to the land on which the sports facilities are situated, provided that these are costs on which VAT is payable.
The guidance provided by Dus-I lists the following as (examples of) activities that are NOT eligible for funding:
- gas, water, electricity;
- landscaping, unless landscaping forms an essential part of the site (as is the case, for example, with golf courses);
- playground at the sports park;
- hospitality sector (canteen interior);
- notary fees, insofar as they are not directly related to the construction or maintenance of the sports facilities.
Grants are only awarded for expenditure on which the sports organisation pays VAT. Consequently, the following, amongst others, are not eligible for a grant:
- rental costs (the letting of immovable property is exempt from VAT);
- wage and staff costs, insofar as these relate to the sports organisation’s own staff (the costs of hired staff are, however, eligible for subsidy, provided they are invoiced inclusive of VAT);
- insurance;
- fees for (building) planning permission;
- funding costs (under the Framework Act).
Method of granting subsidies
The way in which the grant is awarded depends on the amount of the grant:
- up to €25,000
- the application must be submitted no later than 12 months after the completion of the eligible activities;
- using a form drawn up for that purpose, signed by authorised signatories;
- accompanied by:
- an invoice made out to the grant recipient;
- and for payments exceeding €500: proof of payment showing that the grant recipient has paid the invoice;
The Minister will decide on an application for the determination of the grant within 22 weeks.
- between €25,000 and €125,000:
- the eligible activities are yet to take place:
- application for grant regarding the grant:
- using a form drawn up for that purpose, signed by authorised signatories;
- accompanied by a quotation made out in the applicant’s name;
- application for grant regarding the grant:
- the eligible activities are yet to take place:
When deciding to award the grant, the Minister shall pay an advance (either as a lump sum or in instalments).
- application for establishing regarding the grant:
- by means of a form, submitted within 22 weeks of the date by which the activities for which the grant was awarded must have been carried out at the latest;
- Accounts are rendered by means of an invoice made out in the name of the grant recipient and a proof of payment showing that the recipient has paid;
The Minister will decide on an application for the determination of the grant within 22 weeks.
- the eligible activities have already taken place:
- the application must be submitted no later than 12 months after the completion of the eligible activities;
- using a form drawn up for that purpose, signed by authorised signatories;
- accompanied by:
- an invoice made out to the grant recipient;
- and, for payments exceeding €500, proof of payment showing that the grant recipient has paid the invoice;
The Minister will decide on an application for the determination of the grant within 22 weeks.
- over €125,000
- application for grant regarding the grant:
- by means of a form;
- with a quotation;
- and a liquidity forecast;
- application for establishing regarding the grant:
- by means of a form, submitted within 22 weeks of the date by which the activities for which the grant was awarded must have been carried out at the latest;
- Accounts are presented in a financial report.
- application for grant regarding the grant:
The Minister will decide on an application for the determination of the grant within 22 weeks.
Request
Applications for the grant must be submitted using an online form via the website of the implementing body, Dus-I (www.dus-i.nl). The invoices and quotations required to support the application must be attached to the application as scanned copies. A scanned copy of a bank statement from the applicant organisation must also be attached; this must not be more than 3 months old and must clearly show the name and IBAN of the applicant organisation.
An intermediary is permitted to apply for the grant on behalf of the sports organisation. In that case, a letter of authorisation issued by the sports organisation to the intermediary must be submitted with the application.
Quotation
In the context of implementation, Dus-I stipulates that the following information must, as a minimum, be included in the quotation:
- the full name and address of the grant applicant;
- the contractor’s details, such as name, address and Chamber of Commerce number;
- quotation number;
- date
- a description of the services, installation or equipment to be supplied;
- total price excluding VAT, the VAT (with percentage) and the price including VAT;
- the key terms and conditions under which the quotation is provided;
- reference to the contractor’s general terms and conditions;
- Quotations do not need to be signed;
- Quotations are subject to change.
Proposals must clearly relate to activities taking place from 2019 onwards, but do not necessarily need to be valid at the time of submitting the application.
Dus-I accepts quotations drawn up after 1 December 2018. Quotations dated before 1 December 2018 will not be considered, unless they have been signed by both parties.
Invoice
In the context of implementation, Dus-I stipulates that the invoice must contain at least the following details.
Invoice header
- the full name and address of the grant applicant;
- the contractor’s full company name and address;
- The contractor’s VAT number;
- Chamber of Commerce number of the contractor;
- date on which the invoice was issued;
- a unique, consecutive and sequential invoice number.
Invoice lines
- a detailed description of the goods, services or measures provided
- the number of goods, services or measures supplied;
- associated costs;
- the date of delivery of the goods, services or measures (or the date of advance payment);
- amount excluding VAT;
- VAT rate;
- VAT amount.
Any document that meets these requirements may be regarded as an invoice, regardless of its name or intended use.
Additional obligations
The grant recipient must ensure that:
- during the review period applicable under VAT legislation[8] there is no right to deduct VAT;
- the subsidised sports facility must remain available for amateur sport for local users for at least 10 years after the end of the subsidy period.
The grant recipient is obliged to report any failure to comply with these additional obligations. This reporting obligation must be fulfilled without delay[9].
Pursuant to the framework regulations[10] Furthermore, there is an obligation to report if it appears likely that the activities for which the grant was awarded will not be carried out, will not be carried out on time, or will not be carried out in full (for example, if the maximum grant period of three years is exceeded).
The explanatory notes to the scheme state, with regard to the first notification mentioned above: “The notification may result in the withdrawal of the grant decision or in the decision being amended to the detriment of the grant recipient: after all, it is not the intention that both the grant and the VAT refund should be received.”.
The explanatory notes do not specify the consequences of the second notification mentioned above. It is, however, noted that there are no consequences if the sports facility ceases to exist.
Under the framework regulations, the grant recipient must ensure that the grant is used effectively and that the funds required for the implementation of the grant are managed responsibly[11].
The grant recipient is also obliged to maintain records organised in a clear, verifiable and efficient manner. The records and the associated documents must be retained for 10 years following the approval of the grant[12].
[1] Under the BOSA Incentive Scheme, €87 million will be channelled directly back to individual sports organisations (in 2019). In addition, €152 million will be channelled back to local authorities via the Specific Sports Incentive Grant (SPUK).
[2] The measures eligible for this additional grant are listed in Annex I to the scheme.
[3] This corresponds to eligible costs of €12,500,000 (including VAT).
[4] This corresponds to eligible costs of €25,000 (including VAT).
[5] It appears from the answer to a question on the Dus-I website that the increase in the grant amount relating to the costs of energy-saving measures or improvements to accessibility may be taken into account when assessing whether the minimum amount has been exceeded. The exact wording of this question and answer is as follows:
“A minimum investment of 25,000 euros is very high for some organisations. What can be done?
The minimum threshold for an application is 5,000 and the grant amounts to 20% of the investment. A minimum of €25,000 must therefore be invested.
Energy-saving measures and measures to improve accessibility (see Annex) are eligible for a grant of 35%. For example: 35% of €15,000 = €5,250.
Combinations are also possible. Invoices from a calendar year may be carried forward to reach the minimum threshold.
”For investments spanning several years, the application must be for at least €5,000 each year.”.
[6] Insofar as the catering facilities within the sports complex are used for activities subject to VAT, there is a right to deduct the input VAT attributable to those activities. To that extent, there is no entitlement to a grant under the BOSA Incentive Scheme.
It appears from the explanatory notes to the scheme that the Minister is of the view that, insofar as hospitality facilities are used in a manner that qualifies for VAT exemption, these facilities do not meet the definitions of sports facilities and sports equipment, and are therefore not eligible for subsidy even in such cases.
The FAQs on the Dus-I website state quite clearly that costs relating to catering activities are not eligible for the grant.
[7] All organisations with an SBI code beginning with 93.1 are sports organisations. Organisations with the codes 93.13 (gyms), 93.14.6 (gyms), 93.19.1 (professional sportspeople), 93.19.3 (organising fishing trips), 93.19.4 (supporters’ clubs (sport)) and 93.19.5 (organising sporting events) are not eligible for a grant.
As regards the SBI code, registration with the Chamber of Commerce is, in principle, the determining factor.
[8] The review period covers the year in which a purchased asset is brought into service, PLUS:
- movable property: the next four years;
- property: the next nine years.
The VAT adjustment scheme does not apply to services (the Government has submitted a bill on the application of the adjustment scheme to high-value services for public consultation online, but has not yet tabled it for debate in Parliament). For example, under VAT rules, a service is deemed to be provided in the case of renovation work that does not result in the creation of a new property.
[9] Article 13(3) of the BOSA Incentive Grant Scheme.
[10] Article 5.7 of the Framework Regulations on Grants from the Ministries of Education, Culture and Science (OCW), Social Affairs and Employment (SZW) and Health, Welfare and Sport (VWS).
[11] Article 5.1 of the Framework Regulations on Subsidies from the Ministries of Education, Culture and Science (OCW), Social Affairs and Employment (SZW) and Health, Welfare and Sport (VWS).
[12] Article 5.2 of the Framework Regulations on Subsidies from the OCZ, SZW and VWS.