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Flashback on ECJ cases C-334/14 (De Fruytier) – Hospitals and medical care – Self-employed activity

On July 2, 2015, the ECJ issued his decision on the case C-334/14 (De Fruytier) related to the exemption of hospital and medical care.

Context: Exemptions for certain activities in the public interest — Article 13(A)(1)(b) and (c) — Hospital and medical care — Closely related activities — Activity of transporting human organs and samples of human origin for the purposes of medical analysis or medical or therapeutic care — Self-employed activity — Hospitals, centres for medical treatment and diagnosis — Establishment of a similar nature


Article in the EU VAT Directive

Article 13(A)(1)(b) and (c) of the Sixth VAT directive


Facts

Ms De Fruytier is engaged, in a self-employed capacity, in transporting human organs and samples of human origin for various hospitals and laboratories, under the authority and responsibility of a medical doctor.

  • The Belgian tax authority decided that Ms De Fruytier’s activity was subject to VAT.
  • Ms De Fruytier, being of the view that her activity should be exempt from VAT, challenged that decision before the courts. The Tribunal de première instance de Namur (Court of First Instance, Namur), by judgment of 1 June 2006, and subsequently the Cour d’appel de Liège (Court of Appeal, Liège), by judgment of 26 October 2007, ruled in favour of Ms De Fruytier and ordered the relevant abatements.
  • In consequence of the appeal in cassation brought by the Belgian State against the judgment of the Cour d’appel de Liège, the Cour de cassation (Court of cassation), by an order for reference of 18 June 2009, referred a question concerning the interpretation of Article 13(A)(1)(d) of the Sixth Directive to the Court of Justice for a preliminary ruling.
  • In its judgment in De Fruytier (C‑237/09, EU:C:2010:316), the Court of Justice ruled that that provision must be interpreted as not applying to the activity of transporting, in a self-employed capacity, human organs and samples of human origin for hospitals and laboratories.
  • In its judgment of 16 September 2010, the Cour de cassation set aside the judgment of the Cour d’appel de Liège and, consequently, referred the case to another court of appeal, the Cour d’appel de Mons (Court of Appeal, Mons). By a judgment of 15 February 2013, that latter court declared the appeal admissible and, before ruling on the substance of the appeal, ordered the proceedings to be reopened.

Questions

Do points (b) and (c) of Article 13(A)(1) of the Sixth VAT directive 1 mean that the transportation of samples and organs, for the purposes of medical analysis or medical or therapeutic care, by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system to clinics and laboratories, are not exempt from VAT as services closely related to medical services, namely, as services intended to diagnose, treat and, in so far as is possible, cure diseases or health disorders?

Can the activity of transporting samples and organs for the purposes of medical analysis or medical or therapeutic care, carried out by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system to clinics and laboratories for medical analysis, qualify for the exemption from VAT provided for in Article 13(A)(1)(b) and (c) of the Sixth VAT directive?

Must the concept of other duly recognised establishments of a similar nature, referred to in Article 13(A)(1)(b) of the Sixth Directive, be interpreted as covering private companies whose services consist in the transportation of human samples for the purposes of analysis essential to the therapeutic objectives of hospitals and centres for medical treatment?


AG Opinion

None


Decision

Neither Article 13(A)(1)(b) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, nor Article 13(A)(1)(c) thereof, can be interpreted as applying to the transportation, for clinics and laboratories, of human organs and samples of human origin for the purposes of medical analysis or medical or therapeutic care, by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system. In particular, such an activity does not qualify for an exemption from value added tax as an activity closely related to services of a medical nature as provided for in Article 13(A)(1)(b), since that self-employed third party cannot be characterised as a ‘body governed by public law’ or fall within the definition of a ‘hospital’, a ‘centre for medical treatment’ or a centre for ‘diagnosis’ or any ‘other duly recognised establishment of a similar nature’, operating under social conditions comparable to those applicable to bodies governed by public law.


 

Personal comments/VATupdate 

First, that activity clearly does not constitute ‘medical care’ or ‘the provision of medical care’ within the meaning of Article 13(A)(1)(b) and (c) of the Sixth Directive, since it is not covered by medical services which have as their direct purpose the actual diagnosis, treatment or cure of diseases or health disorders, or the actual protection, maintenance or restoration of health.

Secondly, unlike, in particular, a laboratory governed by private law and undertaking diagnostic medical tests with a therapeutic purpose, a self-employed transporter is not an individualised entity performing the same type of particular function as hospitals or centres for medical treatment or diagnosis.


Source Curia


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