ECJ C-194/26 (Private Secondary School Evlogi and Hristo Georgievi) – Questions – VAT exemption for education: public vs. private providers

Court of Justice (CJEU) – C-194/26 (Private Secondary School Evlogi and Hristo Georgievi) – Questions – VAT exemption for education: compulsory vs. additional teaching, private commercial providers, and mixed single-amount pricing

Summary

This is a request for a preliminary ruling lodged on 11 February 2026 by the Sofiyski rayonen sad (Sofia District Court, Bulgaria), with the decision to refer dated 9 February 2026. The main proceedings are a civil dispute in which an educational establishment, Private Secondary School Evlogi and Hristo Georgievi EOOD (the applicant), seeks payment of a contractual penalty from a parent (defendant, “TN”) who unilaterally terminated an enrolment contract without the agreed notice.
The applicant is a commercial company that provides education following Bulgarian State education standards but is not a body governed by public law, and it is not registered under the Bulgarian VAT law (ZDDS). The contract covered both compulsory education (subjects and curricula prescribed by law) and additional, freely chosen education (here, karate/sport outside normal teaching hours), billed as a single combined amount.
The central VAT questions are whether education supplied for commercial purposes by a private establishment falls within the exemption in Article 132(1)(i), whether the optional extra lessons qualify as “school education” or as “closely related” supplies, whether exempting only public-law bodies breaches equal treatment, and whether billing a mixed (exempt + taxable) supply as a single undifferentiated amount without charging or itemising VAT is compatible with the principles of tax neutrality and transparency.
Subsidiary questions concern competition and State aid under Articles 101, 102 and 107 TFEU, and the fairness of the penalty clause under Directive 93/13/EEC.

Articles of the EU VAT Directive 2006/112/EC discussed

Article 1(2) – Sets out the fundamental principle of the common VAT system (VAT proportional to price, charged on transactions). Referenced in the fourth question, where the referring court asks whether the principle of tax transparency arising from it precludes billing combined remuneration for a mixed supply without separately indicating the price of the taxable component and without charging the VAT due on it.
Article 2 – Defines the transactions subject to VAT (the scope of taxable supplies). Invoked as the basis on which the taxable component (e.g. sport/karate) would be taxed if it does not fall within the education exemption, and features in the fourth question on mixed supplies combining an exempt supply and a taxable supply under Article 2.
Article 131 – General provision governing the application of the exemptions in Chapter 2 under conditions set by Member States. Listed among the EU-law provisions relied on, providing the framework within which the education exemption and any national limitations operate.
Article 132(1)(i) – Exempts the provision of children’s/young people’s education, school or university education, vocational training or retraining, and “closely related” supplies of goods and services, by bodies governed by public law with that aim or by “other organisations recognised by the Member State concerned as having similar objects.” This is the core provision: it underpins Questions 1, 2.1, 3 and 4, covering (a) whether compulsory education by a private commercial company is exempt “school education”, and (b) whether optional extra lessons are “school education” or “closely related” supplies.
Article 133 – Allows Member States to make the exemption for non-public-law bodies subject to conditions (e.g. absence of systematic profit aim). Referenced in Questions 1 and 3: it authorises but does not oblige Member States to restrict the exemption for bodies other than those governed by public law, feeding the equal-treatment analysis between public and private providers.
Article 134 – Excludes the exemption where supplies are not essential to the exempt transactions or are intended to obtain additional income in direct competition with commercial enterprises subject to VAT. Referenced in Question 1: the referring court notes it does not exclude extending the Article 132(1)(i) exemption to private bodies supplying education for commercial purposes.

(The referral also relies on Articles 101, 102 and 107 TFEU and Articles 3(1) and 6(1) of Directive 93/13/EEC, which fall outside the VAT Directive but frame the subsidiary competition, State-aid and unfair-terms questions.)

Preliminary Ruling Questions

Must Article 132(1)(i), Article 133 and Article 134 of Directive 2006/112/EC be interpreted as not precluding the VAT exemption of education services provided for commercial purposes by establishments that are not bodies governed by public law, where the establishment provides education in accordance with State education standards in the subjects and subject areas taught in schools and covering the content of the curriculum applicable throughout the national territory (compulsory education)?
Must Article 132(1)(i) of Directive 2006/112/EC be interpreted as meaning that activities such as those in the main proceedings — the organisation of additional education and lessons in subjects such as foreign languages, mathematics, literature, sport, music and summer school (education not part of the compulsory curriculum under recognised State education standards), freely chosen by pupils or their parents, taking place outside the usual teaching hours and which may also be provided by another national or European commercial company under the principles of the free market and freedom of contract — cannot be classified as “school education” and/or “closely related” to the principal education supply, and therefore is not exempt from VAT? (Question 2.1)If the answer to the previous question is affirmative (additional education does not fall within Article 132(1)(i)): Must Article 102 TFEU be interpreted as applying to the provision of a taxable but untaxed supply of additional lessons under an enrolment contract to a person who has also concluded the basic enrolment contract for compulsory education (untaxed under Article 132(1)(i)), where the additional lessons are chosen by the parent/pupil, are not covered by compulsory State education standards, take place outside compulsory teaching hours and entail additional remuneration? (Question 2.2)
Must Article 132(1)(i) and Article 133 of Directive 2006/112/EC and the principle of equal treatment be interpreted as meaning that a supply of services provided by a person governed by private law in the field of education in the public interest (general, non-specialised education in subjects/areas applicable throughout the national territory under uniform State education standards — “compulsory education”) constitutes a non-taxable supply? Does the principle of equal tax treatment permit bodies governed by public law to be favoured over private-law establishments where both carry out the same education activity for the purposes of Article 132(1)(i)? (Question 3.1)If the answer is negative (i.e. it is not a non-taxable supply): Does national legislation exempting from VAT public-interest education (compulsory education) provided by public-law bodies, but not by private-law establishments, constitute State aid within the meaning of Article 107 TFEU? Must Article 107 TFEU be interpreted as precluding national legislation that does not exempt private-law bodies from charging VAT on “education in the public interest” while exempting public-law bodies, where this leads to different treatment for the same activity and increases the administrative burden on the private-law establishment? Does the VAT exemption of compulsory education provided by public-law bodies constitute State aid under Article 107 TFEU if the same activity by commercial companies is not exempt? (Question 3.2)
If the answer to the second question is negative (i.e. the “sport” service supplied outside normal teaching hours, based on the parent’s/pupil’s choice and not part of compulsory education, is subject to VAT): Must the principles of tax neutrality and tax transparency be interpreted as prohibiting a taxable person from billing a combined amount for a mixed supply — comprising both an exempt supply (Article 132(1)(i)) and a taxable supply (Article 2) — without charging VAT on the taxable component and without indicating the remuneration for each individual supply separately? Must Article 1(2) of Directive 2006/112/EC and the principle of tax transparency arising therefrom be interpreted as precluding a taxable person providing such a mixed supply from billing combined remuneration without separately indicating the price of the taxable component and without charging the VAT due on it, thereby creating uncertainty as to the tax treatment?If affirmative (EU law precludes such a practice): Must the taxable person indicate the remuneration for the two supplies — taxable and non-taxable — separately?
Must Article 6(1) of Directive 93/13/EEC be interpreted as meaning that a term in a consumer contract (such as the contractual penalty at issue) which sets the penalty on the basis of a combined price for a mixed supply is unfair within the meaning of Article 3(1), where the supplier has failed to fulfil its transparency obligation regarding the pricing of the taxable component by not indicating a separate price for it and has not charged VAT on it? (Fifth question)

Key Takeaways

Private/commercial education providers and the exemption: The case tests whether a for-profit company delivering State-standard compulsory education can be an “other organisation recognised by the Member State” under Article 132(1)(i), and whether Member States may lawfully confine the exemption to public-law bodies — a distinction with direct competitive, pricing and administrative-burden consequences for private education operators.
Scope of “school education” and “closely related” supplies: Businesses supplying bundled educational packages must watch how the Court delineates exempt core teaching from optional/ancillary activities (sport, meals, books, extra languages), as the classification determines VAT treatment of each element and the reach of the strict-interpretation and “closely related” tests.
Invoicing mixed supplies: The referral squarely raises whether charging a single combined amount for exempt + taxable elements — without itemising or charging VAT on the taxable part — breaches tax neutrality and transparency (and Directive 93/13 on unfair terms), a practical warning for taxpayers to price, itemise and document mixed supplies transparently.

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