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ECJ C-700/17 (Wolf-Henning Peters) – Judgment – Medical care; VAT exemption; Relationship of trust between doctor and patient

On 18 September 2019, The European Court of Justice gave its judgment in case C-700-17 (Wolf-Henning Peters). This case deals with the VAT exemption for medical activities.

Unofficial translation

Facts (simplified):

Peters is a doctor, established in Germany, specialized in clinical chemistry and laboratory diagnostics. He provided medical care services to LADR Medizinisches Versorgungszentrum Wittstock GmbH, a company that performs laboratory work for independent doctors, rehabilitation clinics, medical services and hospitals.

He received a monthly allowance from LADR for those services which consisted, in particular, of medical examinations for specific medical laboratory diagnoses and medical support for blood transfusions in the context of specific treatments.

Peters did not submit a VAT Return because he considered that his services were exempt from VAT.

The German tax office, on the other hand, considered that it concerned taxable services. They reasoned that the VAT exemption only applies if there is a relationship of trust between the doctor and the person treated. This condition is not met for services provided by clinical chemists and laboratory doctors.

The Bundesfinanzhof (Supreme Federal Tax Court, Germany) decided refer the following questions to the ECJ for a preliminary ruling:

(1) Must the VAT exemption for medical care services by a doctor specializing in clinical chemistry and laboratory diagnostics be assessed on the basis of Article 132 (1) (c) or Article 132 (1) (b) of the EU VAT Directive?

(2) Can Article 132 (1) (c) of the VAT Directive – if this provision applies – only be applied if there is a relationship of trust between the doctor and the person treated?

Considerations

It follows from the case-law of the Court that the terms ‘medical care’ in Article 132 (1) (b) and ‘medical care’ in Article 132 (1) , point (c) both concern services whose purpose is to diagnose, treat and, as far as possible, cure illnesses or health problems.

The criterion for defining the scope of those two exemptions provided for in those provisions is not so much related to the nature of the service, but to the place where it is provided. Article 132 (1) (b) relates to services provided in a hospital, while Article 132 (1) (c) relates to services provided outside a hospital, at the private address of the healthcare provider or at home with the patient or at any other place.

The term ‘medical care’ has the same meaning, and medical care services that are provided by a medical specialist in clinical chemistry and laboratory diagnostics, may fall under the VAT exemption of Article 132 (1) (c) if these services do not meet all the conditions for the exemption provided for in Article 132 (1) (b).

According to a literal interpretation of Article 132 (1) (c), a service must be exempted if it meets two conditions, namely that the service consists of medical care, and second, that such care is provided in the context of the practice of medical and paramedical professions as defined by the Member State concerned. It is therefore in no way clear from the wording of that provision that the VAT exemption for medical care requires that it be granted in the context of a relationship of trust between the care provider and the person treated.

Judgment

The European Court of Justice rules as follows:

(1) Article 132 (1) (b) and (c) of the EU VAT Directive must be interpreted as meaning that medical care services such as those at issue in the main proceedings provided by a medical specialist in clinical chemistry and laboratory diagnostics, may fall under the VAT exemption of Article 132 (1) (c) of this Directive if these services do not meet all the conditions for the exemption in which Article 132 (1) (b) of this Directive.

2) Article 132 (1) (c) of the EU VAT Directive must be interpreted as meaning that the exemption from value added tax set out therein is not subject to the condition that the medical care in question is provided in the context of a relationship of trust between the patient and the care provider.

Source: Curia (Dutch, English version not yet available)

 

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