On 27 June 2019, the European Court of Justice gave its judgment in case C-591/17 (Belgisch Syndicaat van Chiropraxie and Others), regarding medical services and the VAT exemption.
Context: Reference for a preliminary ruling – Taxation – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 132(1)(c) – Exemptions – Medical and paramedical professions – Chiropractic and osteopathy – Article 98 – Annex III, points (3) and (4) – Medicinal products and medical devices – Reduced rate – Supply as part of therapeutic interventions or treatments – Standard rate – Supply as part of aesthetic interventions or treatments – Principle of fiscal neutrality – Maintenance of the effects of national legislation incompatible with EU law
Article in the EU VAT Directive
Article 98 and 132 of the EU VAT Directive 2006/112/EC
Article 98 (Rate)
1. Member States may apply either one or two reduced rates.
2. The reduced rates shall apply only to supplies of goods or services in the categories set out in Annex III. The reduced rates shall not apply to electronically supplied services.
3. When applying the reduced rates provided for in paragraph 1 to categories of goods,Member States may use the Combined Nomenclature to establish the precise coverage of the category concerned.
Article 132 (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;
Facts (simplified):
A number of Belgian chiropractors, osteopaths, plastic surgeons and professional associations brought an action before the referring court in 2016 for the annulment of, inter alia, Article 110 of the Law of 26 December 2015. This Law provides rules for the creation of jobs and better income.
The actions brought by chiropractors, osteopaths and some of their professional associations are based, in particular, on infringement of Article 132 (1) (c) of the VAT Directyive. According to them, Article 110 of this law is incompatible with this provision insofar as the VAT exemption granted therein is reserved without reasonable justification to the practitioners of a regulated medical or paramedical profession, whereby this statute under Belgian law does not belong to the professions of chiropractor and osteopath.
The plastic surgeons argue that, under Belgian law, an unjustified difference exists in treatment between medicinal products or medical devices provided as a result of an aesthetic intervention or treatment, and medicinal products or devices are provided as a result of surgery or treatment of a therapeutic nature, since only the latter are subject to a reduced VAT rate.
Question
(1) Is Article 132 (1) (c) of [Directive 2006/112] to be interpreted as meaning that that provision reserves the exemption provided for therein, both in relation to conventional and non-conventional practices, to practitioners of a medical or paramedical profession that is subject to national legislation on healthcare professions and meets the requirements set out in that national legislation and that persons who do not meet those requirements but are affiliated to a professional association of chiropractors or osteopaths and to the answer the requirements set by that association, are excluded?
2) Do Article 132 (1) (b), (c) and (e), Article 134 and Article 98 of [Directive 2006/112], read in conjunction with points 3 and 4 of Annex III to that directive, in particular from from the point of view of the principle of fiscal neutrality, to be interpreted as:
(a) that they preclude a national provision providing for a reduced rate of VAT applicable to medicinal products and medical devices provided as a result of surgery or treatment of a therapeutic nature, while medicinal products and medical devices that are provided as a result of an intervention or treatment of a purely aesthetic nature, and are closely related to it, are subject to the normal VAT rate;
b) or that they allow or impose equal treatment of the aforementioned cases?
(3) It is for the [Constitutional] Court to assess the effects of the provisions to be annulled [on account of the incompatibility already established with Directive 2006/112] and those which, if appropriate, must be wholly or partially annulled if the answer to the first or second questions that they are contrary to European Union law in order to allow the [national] legislator to bring them into line with that law? ”
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 the application of the exemption therein is not reserved to services provided by practitioners of a medical or paramedical profession regulated by the law of the Member State concerned.
(2) Article 98 of Directive 2006/112, read in conjunction with points 3 and 4 of Annex III to that directive, must be interpreted as not precluding national legislation differentiating treatment between medicinal products and medical devices that are provided as a result of an operation or treatment with a therapeutic character on the one hand and medicines and medical devices that are provided as a result of an operation or treatment with a purely aesthetic character, on the other hand, because the latter medicines and medical devices are excluded from the benefit of the reduced rate of value added tax that applies to the first-mentioned medicines and medical devices.
(3) In circumstances such as those at issue in the main proceedings, a national court cannot apply a national provision allowing it to preserve certain effects of an act which it has declared void in order to temporarily effect the effect of national provisions which it has declared incompatible with Directive 2006/112. until brought into compliance with this Directive, in order to limit the risk of legal uncertainty due to the retroactive effect of such annulment and furthermore to prevent the application of any national regime that precedes those provisions and is incompatible with that Directive.
Source
Summary
Belgian chiropractors, osteopaths, plastic surgeons and professional associations have lodged an appeal for violation of art 132(1)(c) of the VAT Directive. The VAT exemption in Belgium is reserved for practitioners of a regulated medical or paramedical profession, excluding chiropractors and osteopaths.
The plastic surgeons have lodged an appeal because medicines or medical aids provided as a result of an intervention or treatment with an aesthetic character are taxed in Belgium at the standard rate, and medicines or medical aids provided as a result of an intervention or treatment with a therapeutic character at the reduced VAT rate.
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