Case C‑573/15

État belge

v

Oxycure Belgium SA

(Request for a preliminary ruling from the Cour d’appel de Liège)

(Reference for a preliminary ruling — Value added tax — Directive 2006/112/EC — Article 98(2) — Annex III, points 3 and 4 — Principle of fiscal neutrality — Medical treatment using oxygen — Reduced VAT rate — Oxygen cylinders — Standard rate of VAT — Oxygen concentrators)

Summary — Judgment of the Court (Sixth Chamber), 9 March 2017

Harmonisation of fiscal legislation — Common system of value added tax — Discretionary power of the Member States to apply a reduced rate to certain supplies of goods and services — Exercise thereof — Limits — Compliance with the principle of fiscal neutrality — Application of a reduced rate only to oxygen cylinders — Lawfulness

(Council Directive 2006/112, Art. 98(1) and (2) and Annex III, points 3 and 4)

Article 98(1) and (2) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax and Annex III, points 3 and 4, thereto, read in the light of the principle of fiscal neutrality, does not preclude national legislation, such as that at issue in the main proceedings, which provides that the standard rate of value added tax is applicable to the supply or rental of oxygen concentrators, while that legislation provides for the application of the reduced value added tax rate on the supply of oxygen cylinders.

Therefore, the Member States may, in principle, choose to apply a reduced VAT rate to pharmaceutical products which are mentioned in point 3 of Annex III to the VAT Directive, while applying the standard rate to medical devices mentioned in point 4 thereof. They may also choose to apply a reduced VAT rate to specific pharmaceutical products or medical devices among those mentioned in points 3 and 4, while applying the standard rate to other such products or devices. In any event, the Member States are required to apply the standard rate to products not mentioned in that annex.

However, where a Member State chooses to apply selectively the reduced rate of VAT to certain goods or specific services mentioned in Annex III to the VAT Directive, it must comply with the principle of fiscal neutrality (see, to that effect, judgments of 3 April 2008, Zweckverband zur Trinkwasserversorgung und Abwasserbeseitigung Torgau-Westlbien, C‑442/05, EU:C:2008:184, paragraphs 41 and 43; of 6 May 2010, Commission v France, C‑94/09, EU:C:2010:253, paragraph 30; and of 27 February 2014, Pro Med Logistik and Pongratz, C‑454/12 and C‑455/12, EU:C:2014:111, paragraph 45).

As a preliminary point, it must be recalled that the principle of fiscal neutrality precludes treating similar supplies of services, which are thus in competition with each other, differently for VAT purposes (see judgment of 11 September 2014, K, C‑219/13, EU:C:2014:2207, paragraph 24 and the case-law cited).

However, as the Court has repeatedly made clear, that principle cannot extend the scope of a reduced rate in the absence of clear wording to that effect (see, in particular, judgment of 5 March 2015, Commission v Luxembourg, C‑502/13, EU:C:2015:143, paragraph 51, and of 2 July 2015, De Fruytier, C‑334/14, EU:C:2015:437, paragraph 37).

That principle is not a rule of primary law which can condition the validity of a reduced rate, but a principle of interpretation, to be applied concurrently with the principle of strict interpretation of reduced rates (see, to that effect, judgment of 19 July 2012, Deutsche Bank, C‑44/11, EU:C:2012:484, paragraph 45).

(see paras 26, 28, 30-32, 37, operative part)