Private company offers extracurricular activities for children. Are they exempt from VAT?

Happy Education, C-612/20, judgment 28.04.2022

A Romanian company conducts a business of organizing educational activities for children.

Its services include homework help, language courses, art courses, sports activities, picking up children from school, and serving meals. Its activities were identical to those set forth in the Romanian state’s „school after school” program.

The company claimed that its activities were exempt from VAT. Meanwhile, the tax authorities stated that the company’s activities did not fall within the scope of the national educational system and it had not obtained the relevant permit to perform VAT exempt educational activities.

The main question to be answered by the Court is whether such an activity by the Romanian company fulfills the conditions for exemption from Article 132.1.i of the VAT directive – i.e. in particular whether this is „school or university education” provided by „bodies governed by public law having such as their aim or by other organizations recognized by the Member State concerned as having similar objects”.