Gemeinde A v Finanzamt

In Gemeinde A v Finanzamt (Case C‑344/22) (13 July 2023) the CJEU held that a spa tax collected by a German municipality did not represent consideration for a supply that was subject to VAT. 

Gemeinde A was a state-recognised spa town. It levied a tax to cover the costs of constructing and maintaining the spa and leisure facilities of the town and related events. The spa tax was levied on three groups of people: 

• those staying (but not resident) in the municipality who could use the spa facilities and participate in the related events;
• residents of the municipality the focal point of whose life was is a different municipality; and 
• non-local persons staying in the municipality for professional reasons. 

The tax was not levied on day visitors or non-local persons or residents working or training within the municipality itself. It was set at a daily rate for those non-local...