On 5 March 2020 the European Court of Justice gave its judgment in case 48/19 (X GmbH), where the court is asked if a ‘health telephone service’ can be exempt from VAT.
Article in the EU VAT Directive
Article 132(1)(c) of Council Directive 2006/112/EC
Article 132
1. Member States shall exempt the following transactions:
(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;
Facts
- X operated a so-called health telephone on which medical advice was given to insured persons, and carried out patient guidance programs for chronically or long-term sick patients.
- The telephone advisory services were provided by nurses and medical staff who were also largely trained as health coaches. In more than a third of the cases, a doctor was also called in.
- Insofar as medical advice was requested, the medical conclusion was determined with the help of software, then the caller was advised about his specified therapeutic care situation.
- Diagnoses and possible therapies were explained and tips given on behavioural and treatment adjustments.
- The aim of the counselling programs was to better manage the costs of insured persons with chronic or psychological complaints and, in particular, to clearly reduce the number of new stationary admissions of the participants.
- X classified its activities as VAT exempt human health care. The German tax authorities disagreed.
- According to the German court, the applicant does not make remote diagnoses, but merely provides further information about a disease or provides information about diagnoses, without a required therapeutic purpose. The services are neither prescribed by a doctor nor performed as part of an individual prevention or rehabilitation measure.
Questions
In circumstances such as those in the main proceedings, in which a taxable person advises insured persons on various topics relating to healthcare and medical conditions by telephone on behalf of health insurance funds, does this constitute an activity that falls within the scope of Article 132(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax? 1
In circumstances such as those in the main proceedings, is it sufficient, in relation to the services referred to in question 1 and in respect of turnover in the context of ‘patient support programmes’, for the required evidence of professional qualifications if the consultations over the telephone are conducted by ‘health coaches’ (medical assistants, nurses) and a doctor is consulted in approximately one third of the cases?
AG Opinion
None
Decision
1. Article 132(1)(c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that services provided by telephone, consisting of advice relating to health and illness, can fall within the exemption provided for in that provision, provided that they pursue a therapeutic aim, which it is for the referring court to determine.
2. Article 132(1)(c) of Directive 2006/112 must be interpreted as not requiring that, due to the fact that medical services are provided by telephone, nurses and medical assistants who provide those services are subject to additional professional qualification requirements in order for those services to benefit from the exemption provided for in that provision, provided that they can be regarded as being of a level of quality equivalent to that of services provided by other service providers using the same means of communication, which is a matter for the referring court to determine.
Personal comments/VATupdate
Where the ECJ normally interprets the VAT exemptions pretty narrow and strict, it may now seem that they are fairly practical with the exemption for medical services.
Source Curia
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