On 27 June 2019, the European Court of Justice gave its judgment in case C-591/17 (Belgisch Syndicaat van Chiropraxie and Others), regarding medical services and the VAT exemption.
A number of Belgian chiropractors, osteopaths, plastic surgeons and professional associations brought an action before the referring court in 2016 for the annulment of, inter alia, Article 110 of the Law of 26 December 2015. This Law provides rules for the creation of jobs and better income.
The actions brought by chiropractors, osteopaths and some of their professional associations are based, in particular, on infringement of Article 132 (1) (c) of the VAT Directyive. According to them, Article 110 of this law is incompatible with this provision insofar as the VAT exemption granted therein is reserved without reasonable justification to the practitioners of a regulated medical or paramedical profession, whereby this statute under Belgian law does not belong to the professions of chiropractor and osteopath.
The plastic surgeons argue that, under Belgian law, an unjustified difference exists in treatment between medicinal products or medical devices provided as a result of an aesthetic intervention or treatment, and medicinal products or devices are provided as a result of surgery or treatment of a therapeutic nature, since only the latter are subject to a reduced VAT rate.
The Constitutional Court (Belgium) decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:
‘(1) Is Article 132 (1) (c) of [Directive 2006/112] to be interpreted as meaning that that provision reserves the exemption provided for therein, both in relation to conventional and non-conventional practices, to practitioners of a medical or paramedical profession that is subject to national legislation on healthcare professions and meets the requirements set out in that national legislation and that persons who do not meet those requirements but are affiliated to a professional association of chiropractors or osteopaths and to the answer the requirements set by that association, are excluded?
2) Do Article 132 (1) (b), (c) and (e), Article 134 and Article 98 of [Directive 2006/112], read in conjunction with points 3 and 4 of Annex III to that directive, in particular from from the point of view of the principle of fiscal neutrality, to be interpreted as:
(a) that they preclude a national provision providing for a reduced rate of VAT applicable to medicinal products and medical devices provided as a result of surgery or treatment of a therapeutic nature, while medicinal products and medical devices that are provided as a result of an intervention or treatment of a purely aesthetic nature, and are closely related to it, are subject to the normal VAT rate;
b) or that they allow or impose equal treatment of the aforementioned cases?
(3) It is for the [Constitutional] Court to assess the effects of the provisions to be annulled [on account of the incompatibility already established with Directive 2006/112] and those which, if appropriate, must be wholly or partially annulled if the answer to the first or second questions that they are contrary to European Union law in order to allow the [national] legislator to bring them into line with that law? ”
The ECJ rules as follows:
- The exemption of article 132 (1) (c) is not reserved for services provided by practitioners of a medical or paramedical profession regulated by the legislation of the Member State concerned.
- Article 98 of Directive 2006/112, read in conjunction with points 3 and 4 of Annex III to that directive, must be interpreted as not precluding national legislation which makes a difference in treatment between medicinal products and medical devices provided as a result of surgery or treatment of a therapeutic nature on the one hand and medicines and medical devices provided as a result of surgery or treatment of a purely aesthetic nature on the other because the latter medicines and medical devices are excluded from the benefit of the reduced rate of value added tax that applies to the first-mentioned medicines and medical devices.
- In circumstances such as those at issue in the main proceedings, a national court may not apply a national provision which allows it to maintain certain effects of an annulled act in order to temporarily suspend the effect of national provisions which it has declared incompatible with Directive 2006/112 until they have been brought into line with this Directive, in order to limit the risk of legal uncertainty resulting from the retroactive effect of such annulment and, furthermore, to prevent application of a national rule prior to those provisions and incompatible with that Directive.
Source: curia.europa.eu (Dutch)