On October 5, 2016, the ECJ issued its decision in the case C-412/15 (TMD).
Context: Reference for a preliminary ruling — Taxation — Value added tax — Directive 2006/112/EC — Exemptions for certain activities in the public interest — Article 132(1)(d) — Supplies of human organs, blood and milk — Scope — Plasma of human blood transformed and used for industrial purposes
Article in the EU VAT Directive
Article 132(1)(d) of the EU VAT Directive 2006/112/EU.
Article 132 (Exemption)
1. Member States shall exempt the following transactions:
(d) the supply of human organs, blood and milk;
Facts
- TMD manages a blood donor centre. Its business involves collecting, through a chemical process, blood plasma from donors and mixing it with an anticoagulant solution containing, inter alia, sodium citrate. That mixture is then processed in a centrifuge in order to extract certain components. Those components are collected and supplied frozen to businesses in the pharmaceutical sector.
- In the course of its business, TMD supplied that type of plasma to X AG, a company established in Switzerland. That company took delivery of the plasma from TMD and transported it to its various production facilities in other Member States of the European Union for the preparation of medicinal products.
- TMD took the view that the plasma which it supplied to manufacturers of medicinal products did not come under the exemption for supplies of human blood. In its VAT return for 2008, TMD therefore applied to the tax authority for the deduction of input VAT on its operations relating to the supply of plasma.
- The tax authority, on the other hand, considered that the supplies of plasma to other EU Member States were transactions that were exempt from VAT and, accordingly, refused the input tax deduction.
- In its returns for the years 2009 and 2010, which the tax authority accepted, TMD did not deduct input tax.
- On 7 December 2012 TMD applied for an adjustment of the VAT assessment for the period from 2008 to 2010. It applied for recognition of the right to deduct input taxes in relation to the supplies of plasma. In support of its application, it claimed that the intra-Community supplies of plasma for which it now sought a deduction of input taxes were not transactions that were exempt under Paragraph 4(17)(a) of the UStG, in that, in the opinion of the company, these were in fact supplies to pharmaceutical businesses of ‘source’ plasma for fractionation and the subsequent manufacture of medicinal products.
- The tax authority rejected the requests for adjustment by decision of 7 May 2013 against which TMD brought an action before the referring court.
- In support of its action, TMD contends that the supply of blood plasma for the manufacture of medicinal products does not constitute a supply of blood within the meaning of Paragraph 4(17)(a) of the UStG or of Article 132(1)(d) of Directive 2006/112.
Questions
Is Article 132(1)(d) of Directive 2006/112/EC 1 to be interpreted as meaning that the supply of human blood also encompasses the supply of blood plasma obtained from human blood?
If Question 1 is answered in the affirmative: does this also apply to blood plasma that is not intended to be used directly for therapeutic purposes, but exclusively for manufacturing medicinal products?
If Question 2 is answered in the negative: is classification as blood solely dependent on the intended purpose of the blood plasma, or also on the uses to which the blood plasma may theoretically be put?
AG Opinion
In conclusion, I propose that the Court answer the questions referred for a preliminary ruling by the Hessisches Finanzgericht (Finance Court, Hesse) as follows:
– the term ‘blood’ in Article 132(1)(d) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax encompasses the supply of blood plasma obtained from human blood;
– that term also encompasses blood plasma that is intended to be used for manufacturing medicinal products.
Decision
Article 132(1)(d) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted to the effect that supplies of human blood which Member States are required to exempt by virtue of that provision do not include supplies of plasma obtained from human blood where that plasma is intended to be used, not for direct therapeutic purposes, but exclusively for the manufacture of medicinal products.
Summary
Article 132 (1)(d) of the VAT Directive must be interpreted as meaning that supplies of human blood, which the Member States are required to exempt under that provision, do not include supplies of plasma obtained from human blood, where such plasma is not intended for direct therapeutic use but solely for the manufacture of medicinal products.
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