Mudflat hiking: a sport or an experience?
A bucket-list item for adventurous walkers and a regular fixture for some. But is mudflat hiking a sport for VAT purposes? A knowledge group position answers the question for one particular kind of crossing.
Crossing to or from one of the Wadden islands on foot is only possible at low tide and is not without risk, because if the water rises you have to swim the rest. Since that is not the idea, mudflat hiking takes place under the guidance of experienced guides.
The exemption
The question matters for VAT because the Dutch VAT Act contains an exemption for services closely linked to the practice of sport or physical education supplied to individuals by non-profit organisations.
In its 2013 judgment in Město Žamberk the Court of Justice held that the concept of sport deserves a fairly broad reading, because the exemption aims to encourage participation in sport across broad sections of the population. Whether a service is closely linked to the practice of sport must be assessed on the facts, having regard to the layout and facilities lending themselves to that practice.
The intention of each individual visitor is irrelevant, as is the fact that an activity takes place in an organised setting, on a regular basis or with competition in mind. Nor is it enough on its own that an activity promotes physical and mental health.
The knowledge group's position
On 26 April 2024 the Dutch Tax Administration published a position on whether organised crossings in the Wadden area can count as the practice of sport.
The knowledge group notes that the level of an activity and the way it is practised are not decisive. Walking on the mudflats is not a sport in ordinary language, because relaxation comes first, as on a nature walk.
The crossings organised for a fee by a non-profit foundation are, however, very demanding and directed primarily at physical achievement. Participation requires good fitness, because parts of the route consist of salt marsh, muddy flats, sandbanks and fordable channels. The walk takes between four and six hours. For this specific, physically demanding form of mudflat hiking, the knowledge group accepts that there is a sport.
Conclusion
The position concerns a specific case and does not, in our view, mean that every walk can be treated as the practice of sport. What matters is that physical achievement, rather than relaxation, comes first.