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Gemeente Borsele v Staatssecretaris van Financiën

In Gemeente Borsele v Staatssecretaris van Financiën C-520/14 (12 May 2016) the CJEU found that a local authority which provided a service for the transport of schoolchildren did not carry out an economic activity and was therefore not a taxable person.

The municipality of Borsele was charged VAT on the transport of pupils to and from school. A third of parents paid a contribution for the transport covering 3% of its cost but most of it was financed by the municipality from public funds. The issue was whether the municipality carried out an economic activity and was therefore a taxable person so that it could recover the VAT. The CJEU noted that the difference between the operating costs and the sums received in return for the services offered suggested that the parental contribution was a fee rather than consideration for a service. Consequently the...

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