(July 2, 2015)

On July 2, 2015 the European Court of Justice (CJEU) ruled in Case C‑334/14 The Belgian State versus Nathalie De Fruytier, (ECLI:EU:C:2015:437).

·        Do points (b) and (c) of Article 13(A)(1) of the Sixth ... [D]irective mean that the transportation, for clinics and laboratories, of samples and organs for the purposes of medical analysis or medical or therapeutic care, by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system, are not exempt from VAT as services closely related to medical services, namely, as services intended to diagnose, treat and, in so far as is possible, cure diseases or health disorders?

·        Can the activity of transporting, for clinics and laboratories, samples and organs for the purposes of medical analysis or medical or therapeutic care, carried out by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system for medical analysis, qualify for the exemption from VAT provided for in Article 13(A)(1)(b) and (c) of the Sixth ... [D]irective?

·        Must the concept of “other duly recognised establishments of a similar nature”, referred to in Article 13(A)(1)(b) of the Sixth Directive, be interpreted as covering private companies whose services consist in the transportation of [samples of human origin] for the purposes of analysis essential to the therapeutic objectives of hospitals and centres for medical treatment?

The dispute in the main proceedings and the questions referred for a preliminary ruling

·        Ms De Fruytier is engaged, in a self-employed capacity, in transporting human organs and samples of human origin for various hospitals and laboratories, under the authority and responsibility of a medical doctor.

·        The Belgian tax authority decided that Ms De Fruytier’s activity was subject to VAT.

·        Ms De Fruytier, being of the view that her activity should be exempt from VAT, challenged that decision before the courts. The Tribunal de première instance de Namur (Court of First Instance, Namur), by judgment of 1 June 2006, and subsequently the Cour d’appel de Liège (Court of Appeal, Liège), by judgment of 26 October 2007, ruled in favour of Ms De Fruytier and ordered the relevant abatements.

·        In consequence of the appeal in cassation brought by the Belgian State against the judgment of the Cour d’appel de Liège, the Cour de cassation (Court of cassation), by an order for reference of 18 June 2009, referred a question concerning the interpretation of Article 13(A)(1)(d) of the Sixth Directive to the Court of Justice for a preliminary ruling.

·        In its judgment in De Fruytier (C‑237/09, EU:C:2010:316), the Court of Justice ruled that that provision must be interpreted as not applying to the activity of transporting, in a self-employed capacity, human organs and samples of human origin for hospitals and laboratories.

·        In its judgment of 16 September 2010, the Cour de cassation set aside the judgment of the Cour d’appel de Liège and, consequently, referred the case to another court of appeal, the Cour d’appel de Mons (Court of Appeal, Mons). By a judgment of 15 February 2013, that latter court declared the appeal admissible and, before ruling on the substance of the appeal, ordered the proceedings to be reopened.

·        In those proceedings, Ms De Fruytier claimed that, although her activities do not qualify for an exemption on the basis of Article 44(2)(1b) of the VAT Code, which transposes Article 13(A)(1)(d) of the Sixth Directive into Belgian law, they should be granted an exemption on the basis of Article 44(2)(1) of the VAT Code, which transposes Article 13(A)(1)(b) of that directive into Belgian law. In particular, she based that reasoning on the judgment in Commission v France (C‑76/99, EU:C:2001:12).

·        In those circumstances, the Cour d’appel de Mons decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

(1)    Do points (b) and (c) of Article 13(A)(1) of the Sixth ... [D]irective mean that the transportation, for clinics and laboratories, of samples and organs for the purposes of medical analysis or medical or therapeutic care, by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system, are not exempt from VAT as services closely related to medical services, namely, as services intended to diagnose, treat and, in so far as is possible, cure diseases or health disorders?

(2)    Can the activity of transporting, for clinics and laboratories, samples and organs for the purposes of medical analysis or medical or therapeutic care, carried out by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system for medical analysis, qualify for the exemption from VAT provided for in Article 13(A)(1)(b) and (c) of the Sixth ... [D]irective?

(3)    Must the concept of “other duly recognised establishments of a similar nature”, referred to in Article 13(A)(1)(b) of the Sixth Directive, be interpreted as covering private companies whose services consist in the transportation of [samples of human origin] for the purposes of analysis essential to the therapeutic objectives of hospitals and centres for medical treatment?

The CJEU ruled as follows:

Neither Article 13(A)(1)(b) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment, nor Article 13(A)(1)(c) thereof, can be interpreted as applying to the transportation, for clinics and laboratories, of human organs and samples of human origin for the purposes of medical analysis or medical or therapeutic care, by a third party who is self-employed and whose services are covered by the reimbursement made by the social security system. In particular, such an activity does not qualify for an exemption from value added tax as an activity closely related to services of a medical nature as provided for in Article 13(A)(1)(b), since that self-employed third party cannot be characterised as a ‘body governed by public law’ or fall within the definition of a ‘hospital’, a ‘centre for medical treatment’ or a centre for ‘diagnosis’ or any ‘other duly recognised establishment of a similar nature’, operating under social conditions comparable to those applicable to bodies governed by public law.

For further information click here to be forwarded to the text of the ruling as published on the website of the CJEU, which will open in a new window.

Did you know that in our section CJEU Rulings we have made a selection of rulings of the CJEU? We have organized these rulings based on the subject they relate to (e.g. Freedom of establishment, Free movement of capital, Indirect taxes on the raising of capital, etc).

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