On April 27, 2006, the ECJ issued its decision in the joined cases Joined Cases C-443/04 (Solleveld) & 444/04 (van den Hout-van Eijnsbergen).
Context: Sixth VAT Directive – Article 13A(1)(c) – Exemptions – Provision of medical care in the exercise of the medical and paramedical professions – Therapeutic treatments given by a physiotherapist and a psychotherapist – Definition by the Member State concerned of paramedical professions – Discretion – Limits
Article in the EU VAT Directive
Article 13A(1)(c) of the Sixth VAT Directive (Article 132(1)(c) of the EU VAT Directive 2006/112/EC)
Article 132(1)(c) (Exemption)
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;
- Mr Solleveld is a physiotherapist registered as such in the Register established by the BIG Law. In addition to his ‘classical’ physiotherapy activities, Mr Solleveld carries out so-called ‘disturbance field diagnostics’, in respect of which he completed additional specific training in Germany. It is apparent from the order for reference that this activity gives particular attention to dysfunctions of the jaw and mouth, which are established by X-rays, mouth-flow measurements, electrodermal and intra-oral investigations. This activity is based on the theory that detailed examination of the jaw, the teeth and the oral cavity can lead to the detection of causes of ailments and illnesses and form the starting point of treatment aimed at improving or remedying a condition.
- Mr Solleveld’s activities in this area consist first of establishing a diagnosis, to determine whether the patient’s ailments are associated with ‘disturbance fields’ in the jawbone or teeth. If that is the case, Mr Solleveld establishes a treatment plan. The latter involves, essentially, soft laser applications, homeopathic treatments and manual therapy. Before carrying out these treatments, Mr Solleveld may also refer the patient to a dentist or maxillary surgeon.
- As Mr Solleveld did not pay any VAT on services in connection with his activities in the area of disturbance field diagnostics, notices of additional assessment were sent to him in respect of the period 1 January 1994 to 31 December 2000. The objections which he made to those notices were rejected by the Inspector. The rejection was based, in particular, on the opinion of the Inspecteur voor de Gezondheiszorg (Inspector of Public Health), according to whom disturbance field diagnostics does not fall within the area of expertise of a physiotherapist within the meaning of Article 29 of the BIG Law and Article 5 of the 1997 Decree.
- By judgment of 18 November 2002, the Gerechtshof te Amsterdam (Amsterdam Regional Court of Appeal) dismissed the action brought by Mr Solleveld against the decisions to reject his objections, on the ground, in essence, that the medical care in question could not be regarded as having been provided by the latter in his capacity as a physiotherapist.
- Mr Solleveld appealed on a point of law to the Hoge Raad der Nederlanden (Netherlands Supreme Court) against the said judgment. In its order for reference, that court, after having observed that the medical care in question is not provided by Mr Solleveld in his professional capacity within the meaning of the BIG Law, is uncertain as to whether it should nevertheless be exempted from VAT, since, first, its purpose is, from a subjective point of view, to contribute to the medical treatment of the patient and, second, it is apparent from the facts established by the Gerechtshof te Amsterdam that, in 40 % of cases, Mr Solleveld’s patients are referred to him by a doctor or dentist and most insurance companies reimburse the cost of the treatment, at least when the patients have taken out additional insurance covering medical practices other than those coming within the scope of traditional medicine.
- Ms van den Hout-van Eijnsbergen works as a self-employed psychotherapist, and has a teaching diploma in this field. The Geneeskundig Hoofdinspecteur voor de Geestelijke Volksgezondheid (Principal Mental Health Inspector) found that she satisfied the conditions laid down in the 1986 Decree, and she was entered in the Register established by that Decree as a psychotherapist in 1988.
- As Ms van den Hout-van Eijnsbergen did not pay VAT on the services relating to her activities, notices of additional assessment were sent to her for the period 1 January 1992 to 31 December 1995. The objection which she made to these notices was rejected by the Inspector.
- By judgment of 20 March 2003, the Gerechtshof te ’s-Gravenhage (The Hague Regional Court of Appeal) dismissed the action brought by Ms van den Hout-van Eijnsbergen against the decision to reject her objection, on the ground, in essence, that ‘services provided by doctors and psychologists’ as referred to in Article 11(1)(g) of the 1968 Law on turnover tax, in the version in force during the tax years at issue in the main proceedings, must be construed solely as services provided by persons authorised to use the title of doctor or psychologist.
- Ms van den Hout-van Eijnsbergen brought an appeal on a point of law before the Hoge Raad der Nederlanden against the said judgment. In its order for reference, that court, after having observed that it is beyond reasonable doubt that the purpose of treatments provided by self-employed psychotherapists is therapeutic, notes that psychotherapists did not appear on the list of professions referred to in Article 11(1)(g) of the 1968 Law on turnover tax in the version applicable to the dispute, even if they satisfied the statutory requirements for registration and were actually entered in the Register of Psychotherapists. Moreover, the referring court indicates that that provision, in the version in force since 1 December 1997, now states that medical care provided by psychotherapists is exempt from VAT. The said court is accordingly uncertain as to whether the exhaustive list of the medical professions in the 1968 Law on turnover tax, in the version in force prior to the said date, could be sufficient to exclude the medical care at issue from the exemption laid down by Article 13A(1)(c) of the Sixth Directive.
Must Article 13(A)(1)(c) of the Sixth Directive 1 be construed as meaning that exemption from VAT is conferred in respect of interventions comprising the establishment of a diagnosis, the provision of therapeutic advice and possible provision of treatment, in the framework of the diagnostic treatment described in paragraphs 3.1.2 and 3.1.3 above, even where those interventions cannot be subsumed within the exercise, by the person carrying out those interventions, of a medical or paramedical profession as defined by the Member State concerned?
C-444/04 (van den Hout-van Eijnsbergen)
Must Article 13(A)(1)(c) of the Sixth Directive 1 be construed as meaning that psychotherapeutic treatments provided by a person carrying on a profession who satisfies the legal requirements for registration listed in paragraph 3.1, and is registered in the Register of Psychotherapists, are exempt from VAT, even where those interventions cannot be subsumed within the exercise, by the person carrying out those interventions, of a medical or paramedical profession as defined by the Member State concerned?
Under Article 13A(1)(c) of the Sixth Directive, a Member State has the power to define which forms of medical care are to be regarded as being activities falling within a particular medical or paramedical profession and, as such, exempt from VAT. However, those definitions must be sufficiently flexible to allow alternative and interdisciplinary methods of treatment recognised as medical care likewise to be classified as falling within the ambit of one or more professional groups. In the exercise of that power, the Member States must also observe the principle of fiscal neutrality.
Article 13A(1)(c) of the Sixth Directive confers on the Member States the discretion to define paramedical professions. In the exercise of that discretion, the Member States must observe the objectives of the Sixth Directive and the general legal principles, in particular the principles of equal treatment and fiscal neutrality. It is for the referring court to consider whether the Member State concerned has exceeded its discretion by refraining from exempting from VAT services provided by psychotherapists but exempting corresponding services provided by psychiatrists and psychologists.
Article 13A(1)(c) 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 must be interpreted as meaning that it confers on the Member States the discretion to define the paramedical professions and the medical care coming within the scope of such professions for the purpose of the exemption laid down by that provision. However, the Member States must, in the exercise of that discretion, comply with the objective pursued by the said provision, which is to ensure that the exemption applies solely to services provided by persons with the required professional qualifications, and the principle of fiscal neutrality.
National legislation which excludes the profession of psychotherapist from the definition of the paramedical professions is contrary to the said objective and principle only to the extent that psychotherapeutic treatments would, if carried out by psychiatrists, psychologists or any other medical or paramedical profession, be exempt from value added tax, whereas, carried out by psychotherapists, they can be regarded as being of equivalent quality having regard to the professional qualifications of the latter, a matter which it is for the referring court to determine.
National legislation which excludes certain specific medical-care activities, such as treatments using disturbance field diagnostics, carried out by physiotherapists from the definition of that paramedical profession is contrary to the said objective and principle only to the extent that such treatments would, if carried out by doctors or dentists, be exempt from value added tax, whereas, carried out by physiotherapists, they can be regarded as being of equivalent quality having regard to the professional qualifications of the latter, a matter which it is for the referring court to determine.
X performs Body Stress Release treatments (BSR treatments). X is not a BIG professional. The BSR treatment of X concerns the health care of the human being provided to the individual patient. X obtained the BSR diploma in 2002 at the BSR Academy in South Africa. The BSR program was accredited in May 2019 by the Foundation for Quality and Toetsing Nature-oriented Training (KTNO) as equivalent to HBO level. 105 EC points have been awarded to the BSR study. X has also completed the Register training basic medical knowledge to which 45 EC points have been awarded. In addition, X has 17 years of practical experience in which she takes annual refresher courses and three in-depth BSR courses.
The Amsterdam Court of Appeal ruled that X successfully invoked the Decree of the State Secretary of Finance of 29 March 2016, BLKB2016/433MM, UN 2016/22.15 . Therefore, X’s BSR treatments are exempt from VAT under the medical VAT exemption. Even if the appeal to the aforementioned decision would not succeed, X would have been successful on the basis of the EU law principle of tax neutrality as described by the European Court of Justice in the ECJ judgment of 27 April 2006, C-443/04 (Soleveld),
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