Did the Supreme Administrative Court grant a VAT exemption for erotic performances?

In recent days, much attention has been drawn to the judgment of the Supreme Administrative Court (NSA) of 16 October 2025, case no. I FSK 1342/22. Numerous online comments have expressed outrage, claiming that, according to the NSA, online erotic performances are entitled to a VAT exemption. However, when commenting on this matter, two key points should be borne in mind:

• In cases concerning tax rulings, both the tax authority and administrative courts are bound by the description of the factual circumstances or the future event as presented by the applicant;
• In such cases (and, more broadly, tax matters), the role of the Supreme Administrative Court (NSA) or the Provincial Administrative Court (WSA) is not to make moral assessments, but solely to evaluate tax issues — including the classification of an activity within the categories provided for under tax law.

Therefore, setting aside moral indignation, let us take a closer look at what the NSA actually decided in this case.

Description of the Future Event – Artistic Performances Created by an Artist/Creator

When examining the NSA’s judgment, one must first refer to the challenged tax ruling issued by the Director of the National Tax Information (KIS) on 16 September 2021 (no. 0114-KDIP4-2.4012.419.2021.3.AS).

In the factual description, the taxpayer indicated that they intended to provide, via the Internet, “cultural services by performing original artistic shows/performances of an erotic nature on a dedicated online platform (main PKWiU codes: 90; 90.01; 90.01.10; PKD 90.01.Z Performing arts activities; 90.02.Z; 90.03.Z).”

It is evident that the description was drafted to emphasize the cultural character of the service. The taxpayer stressed that they would perform artistic shows of an erotic nature inspired by Asian erotic art. The applicant described themselves as an artist creating individual artistic works through a process of creative activity. The performances were to include dance and stage–musical elements. The taxpayer underlined that they would not produce pornographic films, and that the shows would take place in real time.

At this point, it is worth noting three circumstances that proved crucial in the case. First, the applicant described their services as cultural services provided by an individual creator or performing artist. Second, the performances were to be conducted and made available live. Third, the applicant stressed that the activity in question was not illegal.

Director of KIS: Erotic Shows Have No Connection with the Concept of Culture

The tax authority held that although the applicant acted as an individual creator and performing artist within the meaning of the Copyright and Related Rights Act, the services provided did not have a cultural character and therefore could not benefit from the VAT exemption under Article 43(1)(33)(b) of the VAT Act – i.e. as cultural services provided by individual creators or performing artists, remunerated by way of fees. The tax authority stated:

„Not every service provided by a creator must be regarded as a cultural service. The purpose of an erotic show is, in principle, to induce sexual arousal rather than to provide access to culture and national heritage. It is also difficult to recognize that such shows are carried out in the public interest so as to justify lowering the cost of access to such a service through a VAT exemption.”

WSA: erotic themes are part of everyday life

The Provincial Administrative Court (WSA) in Gliwice, in its judgment of 19 April 2022 (case no. I SA/Gl 1527/21), found that – in light of the description of the future event provided by the taxpayer – the position of the tax authority lacked justification.

According to the Court, the cultural services referred to in Article 43(1)(33) of the VAT Act may also refer to mass culture. The WSA ruled:

„(…) Erotic themes are part of everyday life, human relations, and an inherent element of culture – present in literature, theatre, film, and art (…). Therefore, if an erotic-themed performance does not depict criminalized behaviour, does not consist solely in the presentation of sexual acts in a manner violating social norms, and the creator’s intent is not to induce sexual arousal in the audience, its cultural character cannot be excluded, nor can the conclusion that it serves the public interest.”

NSA: performances containing erotic elements are part of mass culture; the boundary between cultural and non-cultural services is very thin[1]

In the case at hand (I FSK 1342/22), the Supreme Administrative Court (NSA) held that the performances described by the taxpayer, containing elements of eroticism, constitute services belonging to mass culture, and therefore may qualify for the exemption under Article 43(1)(33)(b) of the VAT Act. The Court emphasized that its ruling was based on the description of the future event presented in the application for a tax ruling – as, in the absence of evidentiary proceedings, it was not possible to verify the actual nature of the performances.

According to the NSA, eroticism is a component of mass culture. A performance could not be regarded as a cultural service if it contained pornographic content or criminalized behaviour; however, according to the description submitted by the taxpayer, such elements were not present in this case. The NSA also noted that the application did not indicate that the purpose of the performances was to induce sexual desire – an argument raised by the tax authority in the challenged ruling.

Commentary on the NSA Judgment (I FSK 1342/22)

There is no doubt that the judgments of both the WSA in Gliwice and the NSA are correct – for several reasons. Yet, one aspect that deserves particular attention is the courts’ rejection of the tax authority’s attempt to independently assess the nature of the service using arbitrary and unverifiable criteria, especially given the lack of any evidentiary procedure in tax ruling cases. It is self-evident that the definition of “cultural services” – and indeed of “culture” itself – is necessarily broad. Not everyone would agree that erotic dance constitutes a form of cultural activity, just as not everyone would consider a disco polo concert to be cultural expression.

However, it is not the role of either the Director of KIS or administrative courts reviewing tax rulings to lament that the legislature has not restricted the VAT exemption to “high culture” activities only. The legislature did not do so – and therefore, moral reinterpretation of statutory provisions by the tax authority cannot be accepted. The administrative courts’ judgments should therefore be received with respect and recognition, also because the judges were undoubtedly aware of the wave of online criticism that would follow – stemming from a complete misunderstanding of the essence of the dispute and the courts’ reasoning.

So – did NSA grant a VAT exemption for erotic shows? No, it did not. It was the legislature that decided that the VAT exemption applies to performances which: constitute art, are part of mass culture, and do not contain pornography or other criminalized conduct (in short, to legal artistic activities).

Let us remember – the NSA assessed the taxpayer’s services solely under the VAT Act, based on the description provided in the tax ruling application, as this is precisely the court’s role in such cases. Anyone expecting the Supreme Administrative Court to make a moral assessment of the taxpayer’s activities should revisit the provisions governing the functioning of the administrative judiciary.

And as a side note – this is not the first time such controversy has arisen in VAT-related judgments. A similar discussion followed the CJEU ruling of 8 May 2019 in Case C-568/17 (Staatssecretaris van Financiën v. L. W. Geelen) concerning the VAT treatment of interactive erotic live-streaming sessions

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[1] The written reasoning of the Supreme Administrative Court’s judgment in this case has not yet been published; therefore, the following part of the article is based on the oral reasoning delivered by the Court.