In accordance with the provisions of the Finance Act, 1995, the non-member turnover of member owned golf clubs will become liable to VAT at the 12.5 per cent rate with effect from 1 January 1996 if a club's turnover from such sources exceeds, or is likely to exceed, £20,000 in any period of 12 months.
This initiative is being taken to ensure that the current exemption afforded to member-owned golf clubs does not give rise to distortions of competition to the detriment of commercial golf facilities. EU law requires that the exemption of non-profit making organisations from VAT cannot apply if the basic purpose of the service being supplied is to obtain additional income for the organisation by carrying out transactions which are in direct competition with those of commercial enterprises which are liable to VAT.
Green fees constitute an important source of income for many clubs; indeed, many of the representations which I have received from golf clubs in recent months have pointed out that the development and expansion of their club facilities has been funded primarily by green fees. The leading role taken by many of our long established member-owned clubs in promoting Ireland abroad as a holiday destination for international golfing tourists is also well known and a matter of pride for the organisations concerned.
At the same time, it must be acknowledged that there has been a marked development of commercial golf facilities in recent years. Many of these commercial enterprises have complained to me that the present situation whereby they had to charge VAT on their facilities, but the traditional golf clubs did not, was putting them at a competitive disadvantage.
