EGC VAT Case T-171/26 (Meori) – Questions – VAT Exemption for Massage Therapists: EU Law Compatibility?

• Facts: The case involves an Italian tax assessment against “Fisionatural Center S.a.s. Di QT e C.” for higher taxable income in 2017, stemming from the non-recognition of VAT exemption for services provided by two massage therapists. The tax authorities based this on a “cut-off date” of March 17, 1999, for obtaining massage therapy diplomas to qualify for VAT exemption, arguing that those qualifying after this date are not equivalent to physiotherapists, who require a university degree.
• Issue of Unequal Treatment: The company (appellant) argues that this “cut-off date” creates unequal tax treatment between massage therapists who qualified before 1999 and those who qualified after, despite all performing the same services lawfully. This is claimed to breach principles of equality, reasonableness, and fiscal neutrality under both domestic and EU law.
• Regulatory Complexity: The referring court highlights the complex and inconsistent regulatory framework for massage therapists in Italy, noting that while their services are considered therapeutic and they lawfully practice, the VAT exemption regime changed, leading to different tax treatments based on the diploma date, without preventing them from exercising their profession.
• Impact of EU Law Principles: The court emphasizes that the principles of EU law, particularly the protection of competition and fiscal neutrality, dictate that services of equivalent quality should be treated similarly for tax purposes to avoid market distortions and negative impacts on users.
• Question for Preliminary Ruling: The core question referred to the Court of Justice of the European Union is whether the refusal to grant VAT exemption for services provided by massage therapists who entered a special closed register after March 17, 1999, based on Italy’s interpretation of Law 42/99, is compatible with EU law principles, particularly those of competition protection and fiscal neutrality.

Articles in the EU VAT Directive

• Does the Court of Justice consider that the principles [of EU law] of protection of competition and fiscal neutrality are breached by the refusal to grant exemption from VAT on invoices for services provided by massage therapists, healthcare professionals, applying the interpretative criterion of the tax authority (‘holders of a massage therapist qualification obtained after the entry into force of Law 42/99 following a two-year or three-year course may carry on their activity on a self-employed basis or as an employee at private healthcare facilities and contracted private facilities operating within the national health service, but may not benefit from VAT exemption, when tax documents are issued covering services provided on a self-employed basis’)?
• Is the refusal to recognise the right to exemption from VAT in respect of services provided by massage therapists entered in the special closed register after 17 March 1999 on the basis of the interpretation of Law 42/99 compatible with the principles of [EU] law and are the aforementioned related [provisions] contrary to those principles?

ECJ Cases referred to