Recently, the European Commission has formally requested Austria to provide some further information on the national VAT exemptions concerning the supply of certain services in public interest. According to the European Commission, especially the Austrian implementation of the exemption under the VAT Directive for supplies of certain services closely linked to sport or physical education by non-profit-making organisations to persons taking part in those activities is too wide. The same objection is also held to supplies of certain cultural services: the exemption of all the running business of theatres, museums, zoos, natural preserves, and botanical gardens is considered to go beyond what is allowed under the VAT Directive. A closer examination shows that the objections of the European Commission are correct.