On March 12, 2015, the ECJ issued its decision in the case C-594/13 («go fair» Zeitarbeit).
Context: References for a preliminary ruling — VAT — Directive 2006/112/EC — Article 132(1)(g) — Exemption for supplies of services closely linked to welfare and social security work — Concept of ‘bodies recognised as being devoted to social wellbeing’ — Temporary-work agency — Hiring out of qualified care workers — Exemption not allowed
Article in the EU VAT Directive
Article 132(1)(g) of the EU VAT Directive 2006/112/EC.
1. Member States shall exempt the following transactions:
(g) the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other bodies recognised by the Member State concerned as being devoted to social wellbeing;
Facts
- ‘go fair’ is a business in the form of a general partnership (‘offene Handelsgesellschaft’ (OHG)), the object of which is to contract out labour on the basis of the Gesetz zur Regelung der Arbeitnehmerüberlassung (Law regulating the contracting out of labour) (AÜG).
- As a temporary-work agency, it hired out in the year 2010 care workers it employs (nurses and geriatric nursing assistants) to inpatient and outpatient care establishments within the meaning of Paragraph 4, point 16, of the UStG. The employees of ‘go fair’ formed part of the organisational structure of the relevant care establishments. They performed the care services in accordance with the remit given to them by those establishments and were to that extent bound by their instructions. The care establishments in question were also responsible for the general and specialist supervision of the activities carried out by the temporary agency workers.
- By notice of 18 October 2010 determining the prepayment of turnover tax for September 2010, the Finanzamt Hamburg-Altona subjected the turnover derived from the supply of services by ‘go fair’ to the standard rate of tax. The action brought by ‘go fair’ against that decision was dismissed by the Finanzgericht Hamburg (Finance Court, Hamburg).
- The Bundesfinanzhof (Federal Finance Court), before which an action in ‘revision’ (appeal on a point of law) was brought by ‘go fair’, observes that that company does not fulfil the conditions laid down in Paragraph 4, point 16(k) of the UStG, because it does not operate an establishment involved in nursing and caring for persons in need of physical, mental or psychological help, but a temporary-work agency. Its income is therefore not tax exempt under that provision.
- The Bundesfinanzhof takes the view, however, that ‘go fair’ did provide services which are ‘closely linked to welfare and social security work’, within the meaning of Article 132(1)(g) of Directive 2006/112 and that the possibility cannot be ruled out that it may rely directly on that provision to claim the benefit of the exemption provided for therein.
Questions
(1) On the interpretation of Article 132(1)(g) of Directive 2006/112:
(a) Can a Member State exercise the discretion it enjoys in the context of recognising a body as being devoted to social wellbeing in such a way that, while it recognises persons who provide their services to social security funds and care funds, it does not also recognise State-examined care workers who provide their services directly to persons in need of care?
(b) If State-examined care workers are to be recognised as being devoted to social wellbeing, does the recognition of a temporary-work agency which hires out State-examined care workers to recognised care establishments (host establishments) follow from the recognition of the staff hired out?
(2) On the interpretation of Article 134(a) of Directive 2006/112:
Is the supply of State-examined care workers, as a transaction closely linked to welfare and social security work, essential to the provision of care services to the host establishment (user undertaking), if the host establishment cannot operate without staff?
AG Opinion
None
Decision
Article 132(1)(g) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that neither State-examined care workers who provide their services directly to persons in need of care nor a temporary-work agency which supplies such workers to establishments recognised as being devoted to social wellbeing come within the scope of ‘bodies recognised as being devoted to social wellbeing’ contained in that provision.
Summary
Neither qualified health personnel who provide their services directly to the needy, nor an employment agency that places such personnel at the disposal of institutions recognized as having a social character are covered by the concept of ‘organizations which are recognized as institutions of a social nature’. within the meaning of this provision.
Source:
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