Date of issue: 12th March 2007

ARTISTES DANCE FOR JOY OVER TAX RULING

Although not directly affected by the ruling, chartered accountants Clement Keys say Birmingham lap dancing clubs will be interested to learn that a Norwegian strip club will not be forced to charge the equivalent of VAT after being taken to court by the country's tax authorities.

Norway is not a member of the EU but has a similar tax regime to the UK and the rest of Europe. The standard rate of Norway's VAT equivalent is 25% and Den Blue Engel had refused to charge this on ticket sales because it maintained the artistes' services were a form of art and were therefore exempt.

The tax authorities argued that this type of 'artistic services' did not fall within the exemption and tax was therefore payable.

Whilst the dispute had already been considered at a lower court which had ruled in the club's favour, the tax authorities had sought to have the decision overturned. They were unsuccessful and as a result of the court's ruling Norway's strip clubs will not have to pay VAT.

As stated the decision of the Norwegian Courts is unlikely to benefit UK based strip and lap dancing clubs as these are normally run on a commercial basis and in the UK the cultural exemption is limited to live performances organised by charities and not for profit organisations.