CELEX: 62009CJ0237
Language: en
Date: 2010-06-03
Title: Judgment of the Court (Third Chamber) of 3 June 2010.#Belgian State v Nathalie De Fruytier.#Reference for a preliminary ruling: Cour de cassation - Belgium.#Sixth VAT Directive - Article 13(A)(1)(d) - Exemptions for activities in the public interest - Supply of human organs, blood and milk - Activity of transporting, in a self-employed capacity, human organs and samples for hospitals and laboratories - Concepts of ‘supply of goods’ and ‘supply of services’ - Distinguishing criteria.#Case C-237/09.

Case C-237/09
      Étate belge
      v
      Nathalie De Fruytier
      (Reference for a preliminary ruling from the Cour de cassation (Belgium))
      (Sixth VAT Directive – Article 13(A)(1)(d) – Exemptions for activities in the public interest – Supply of human organs, blood and milk – Activity of transporting, in a self-employed capacity, human organs and samples for hospitals and laboratories – Concepts of ‘supply of goods’ and ‘supply of services’ – Distinguishing criteria)
      Summary of the Judgment
      Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the
            Sixth Directive Exemption of supplies of human organs, blood and milk
      (Council Directive 77/388, Art. 13(A)(1)(d))
      Article 13(A)(1)(d) of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes,
         exempting ‘supplies of human organs, blood and milk’ from value added tax, must be interpreted as not applying to the activity
         of transporting, in a self‑employed capacity, human organs and samples for hospitals and laboratories.
      
      If that activity merely involves physically moving the goods concerned from one place to another for various hospitals and
         laboratories, such activity cannot equate to a ‘supply of goods’ within the meaning of Article 5(1) of the Sixth Directive
         since it does not enable the other party actually to dispose of the goods at issue as if he were the owner.
      
      (see paras 25, 29, operative part)
JUDGMENT OF THE COURT (Third Chamber)
      3 June 2010 (*)
      
      (Sixth VAT Directive – Article 13(A)(1)(d) – Exemptions for activities in the public interest – Supply of human organs, blood and milk – Activity of transporting, in a self-employed capacity, human organs and samples for hospitals and laboratories – Concepts of ‘supply of goods’ and ‘supply of services’ – Distinguishing criteria )
      In Case C‑237/09,
      REFERENCE for a preliminary ruling under Article 234 EC from the Cour de cassation (Belgium), made by decision of 18 June
         2009, received at the Court on 1 July 2009, in the proceedings
      
      État State
      v
      Nathalie De Fruytier,
      THE COURT (Third Chamber),
      composed of K. Lenaerts, President of Chamber, R. Silva de Lapuerta, E. Juhász, J. Malenovský (Rapporteur) and D. Šváby, Judges,
      Advocate General: E. Sharpston,
      Registrar: R. Grass,
      having regard to the written procedure,
      after considering the observations submitted on behalf of:
      –        Ms De Fruytier, by E. Traversa, avocat,
      –        the Belgian Government, by M. Jacobs, acting as Agent,
      –        the Greek Government, by K. Georgiadis, I. Bakopoulos and M. Tassopoulou, acting as Agents,
      –        the Commission of the European Communities, by M. Afonso, acting as Agent,
      having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,
      gives the following
      Judgment
      1        This reference for a preliminary ruling concerns the interpretation of Article 13(A)(1)(d) of 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 (OJ 1977 L 145, p. 1) (‘the Sixth Directive’).
      
      2        The reference has been made in the course of proceedings between Ms De Fruytier and the Belgian State concerning liability
         to value added tax (‘VAT’) in respect of the former’s activity of transporting, in a self‑employed capacity, human organs
         and samples for various hospitals and laboratories.
      
       Legal context
       European Union law
      3        Article 5(1) of the Sixth Directive defines ‘supply of goods’ as the transfer of the right to dispose of tangible property
         as owner.
      
      4        Article 6(1) of the Sixth Directive defines ‘supply of services’ as any transaction which does not constitute a supply of
         goods within the meaning of Article 5 of that directive.
      
      5        Article 13(A)(1) of the Sixth Directive provides:
      
      ‘... Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct
         and straightforward application of such exemptions and of preventing any possible evasion, avoidance or abuse:
      
      ...
      (d)      supplies of human organs, blood and milk; 
      ...’
       National law
      6        Articles 10 and 18 of the Code de la taxe sur la valeur ajoutée (Belgian Value Added Tax Code) (‘the VAT Code’) transpose
         the definitions of supply of goods and supply of services given in Articles 5(1) and 6(1), respectively, of the Sixth Directive.
      
      7        Article 10 of the VAT Code provides:
      
      ‘1. “Supply of goods” means the transfer of the right to dispose of tangible property as owner. In particular, this involves
         making goods available to a person acquiring them pursuant to a contract transferring or dividing up ownership. 
      
      ...’
      8        Article 18 of the VAT Code provides:
      
      ‘1. “Supply of services” means any transaction which does not constitute a supply of goods within the meaning of this code.
         
      
      ...’
      9        Article 44 of the VAT Code, which transposes Article 13(A) of the Sixth Directive concerning exemption from VAT for certain
         activities in the public interest, provides:
      
      ‘1. Services supplied in the course of their normal activity by the following persons shall be exempt from tax:
      ...
      (2) doctors, dentists, physiotherapists, midwives, nurses, carers, home nurses and masseurs, whose medical care services are
         listed in the nomenclature of health services covered by compulsory sickness and invalidity insurance;
      
      2. The following shall also be exempt from tax:
      (1) the supply of services, and the supply of goods closely related thereto, provided in the course of their normal activity
         by hospitals and psychiatric institutions, clinics and medical centres; the transport of sick and injured persons in specially-equipped
         vehicles;
      
      ...
      (l)(b) the supply of human organs, blood and milk;
      ...’
       The dispute in the main proceedings and the question referred for a preliminary ruling
      10      Ms De Fruytier is engaged, in a self-employed capacity, in transporting human organs and samples for various hospitals and
         laboratories.
      
      11      The Belgian tax authority decided that Ms De Fruytier’s activity was subject to VAT.
      
      12      Considering that her activity should be exempt from VAT, Ms De Fruytier challenged that decision before the courts. The Court
         of First Instance, Namur, by judgment of 1 June 2006, and subsequently the Court of Appeal, Liège, by judgment of 26 October
         2007, ruled in favour of Ms De Fruytier and ordered the relevant abatements.
      
      13      In its judgment, the Court of Appeal, Liège held that the activity of transporting human organs and samples in which Ms De
         Fruytier engaged was exempt under Article 44(2)(1)(b) of the VAT Code, essentially on the following grounds.
      
      14      Trading in human organs and samples is prohibited under Belgian law. Therefore, in order to ensure the effectiveness of Article
         44(2)(1)(b) of the VAT Code, the activity in the public interest covered by those provisions with regard to human organs,
         blood and milk cannot be the supply of such items in the sense of a ‘supply of goods’, as defined in Article 10 of the VAT
         Code, because such ‘supply’ is, by definition, excluded as it is prohibited by law. The ‘supply’ for the purposes of Article
         44(2)(1)(b) of the VAT Code must therefore be regarded as being related to the act of actually supplying goods, which is what
         the transport services provided by Ms De Fruytier correspond to.
      
      15      The Belgian State appealed against that judgment on a point of law.
      
      16      In support of its appeal, it argues that the term ‘supply’ used in Article 44(2)(1)(b) of the VAT Code should be interpreted
         according to the definition given in Article 10 of the VAT Code, that is to say, any transaction whereby tangible property
         is transferred by one party to another party, who is thenceforth authorised to dispose of it as owner or in the capacity of
         owner. Consequently, since the transport activity engaged in by Ms De Fruytier should be regarded not as a ‘supply of goods’
         within the meaning of Article 10 of the VAT Code, but as a supply of services, it is not covered by the exemption contained
         in Article 44(2)(1)(b) of the VAT Code.
      
      17      In those circumstances the Cour de cassation decided to stay proceedings and to refer the following question to the Court
         for a preliminary ruling:
      
      ‘Does the activity of transporting, in a self-employed capacity, human organs and samples for hospitals and laboratories constitute
         the supply of human organs, blood and milk, which is exempt from [VAT] under Article 13(A)(1)(d) of the Sixth Directive …?’
         
      
       The question referred for a preliminary ruling
      18      By its question, the referring court asks, in essence, whether Article 13(A)(1)(d) of the Sixth Directive, since it exempts
         from VAT ‘supplies of human organs, blood and milk’, must be interpreted as applying to the activity of transporting, on a
         self‑employed basis, human organs and samples, for hospitals and laboratories.
      
      19      It must be recalled at the outset that the Sixth Directive confers a very wide scope of application on VAT, covering all economic
         activities of producers, traders and persons supplying services. However, Article 13 of that directive exempts from VAT certain
         activities of public interest (Article 13(A)) and other activities (Article 13(B)) (see Case C-253/07 Canterbury Hockey Club and Canterbury Ladies Hockey Club [2008] ECR I‑7821, paragraph 15, and Case C-473/08 Eulitz [2010] ECR I‑0000, point 24).
      
      20      Also, according to consistent case-law, the terms used to specify an exemption contained in Article 13 of the Sixth Directive
         are to be interpreted strictly, since that exemption constitutes an exception to the general principle that VAT is to be levied
         on all services supplied for consideration by a taxable person. Nevertheless, the interpretation of those terms must be consistent
         with the objectives pursued by those exemptions and comply with the requirements of the principle of fiscal neutrality inherent
         in the common system of VAT. Thus, the requirement of strict interpretation does not mean that the terms used to specify the
         exemptions referred to in Article 13 should be construed in such a way as to deprive the exemptions of their intended effect
         (see Case C‑434/05 Horizon College [2007] ECR I‑4793, paragraph 16; Case C‑445/05 Haderer [2007] ECR I‑4841, paragraph 18 and case‑law cited; and Case C‑461/08 Don Bosco Onroerend Goed [2009] ECR I‑0000, paragraph 25 and case-law cited).
      
      21      According to the case-law of the Court, the exemptions provided for in Article 13 of the Sixth Directive constitute independent
         concepts of European Union law whose purpose is to avoid divergences in the application of the VAT system from one Member
         State to another (see, in particular, Case C‑349/96 CPP [1999] ECR I‑973, paragraph 15; Horizon College, paragraph 15; and Case C‑242/08 Swiss Re Germany Holding [2009] ECR I‑0000, paragraph 33). As a consequence, the terms of a provision of the Sixth Directive which makes no express
         reference to the law of the Member States for the purpose of determining its meaning and scope must normally be given an autonomous
         and uniform interpretation throughout the Union (see to that effect Case C-497/01 Zita Modes [2003] ECR I‑14393, paragraph 34, and Case C‑25/03 HE [2005] ECR I‑3123, paragraph 63).
      
      22      It follows from the foregoing that the ‘supply of goods’, to which Article 13(A)(1)(d) of the Sixth Directive refers in connection
         with ‘supplies of human organs, blood and milk’, must be given an autonomous and uniform interpretation specific to the law
         of the European Union.
      
      23      In that regard, it must be recalled that Article 5(1) of the Sixth Directive provides that ‘“supply of goods” shall mean the
         transfer of the right to dispose of tangible property as owner’ (see Case C‑111/05 Aktiebolaget NN [2007] ECR I‑2697, paragraph 31). Also, it is clear from Article 6(1) of the Sixth Directive that the term ‘supply of services’
         covers any transaction not constituting a supply of goods within the meaning of Article 5 of that directive (see Case C‑88/09
         Graphic Procédé [2010] ECR I‑0000, paragraph 17).
      
      24      Moreover, it follows from the case-law of the Court that the concept of supply of goods does not refer to the transfer of
         ownership in accordance with the procedures prescribed by the applicable national law but covers any transfer of tangible
         property by one party which empowers the other party actually to dispose of it as if he were its owner (see, to that effect,
         Case C‑320/88 Shipping and Forwarding Enterprise Safe [1990] ECR I‑285, paragraphs 7 and 8; Case C‑291/92 Armbrecht [1995] ECR I‑2775, paragraphs 13 and 14; Case C‑185/01 Auto Lease Holland [2003] ECR I‑1317, paragraphs 32 and 33; and Aktiebolaget NN, paragraph 32 and case-law cited).
      
      25      If an activity of transporting human organs and samples, such as that at issue in the main proceedings, merely involves physically
         moving the goods concerned from one place to another for various hospitals and laboratories, such activity cannot equate to
         a ‘supply of goods’ within the meaning of Article 5(1) of the Sixth Directive since it does not enable the other party actually
         to dispose of the goods at issue as if he were the owner.
      
      26      Consequently, such an activity cannot benefit from the exemption from VAT under Article 13(A)(1)(d) of the Sixth Directive
         for ‘supplies of human organs, blood and milk’.
      
      27      In that regard, even though it is clear from the order for reference that in Belgium human organs and samples cannot be traded,
         and even though Article 21 of the Convention for the protection of human rights and dignity of the human being with regard
         to the application of biology and medicine: Convention on Human Rights and Biomedicine, concluded at Oviedo on 4 April 1997,
         provides, under the heading ‘Prohibition of financial gain’, that the human body and its parts are not, as such, to give rise
         to financial gain, those factors in themselves cannot be regarded as wholly depriving Article 13(A)(1)(d) of the Sixth Directive
         of its effectiveness. That convention, open for signature in particular by the member States of the Council of Europe, on
         the one hand, and by the European Union, on the other hand, under Article 33(1) of the convention, has not been signed by
         the European Union. Moreover, of the Member States, only a small majority of them have actually ratified the convention.
      
      28      It is conceivable therefore that in Member States other than the Kingdom of Belgium such transactions, in particular those
         relating to human milk, are lawful and may thus enjoy the exemption provided for in Article 13(A)(1)(d) of the Sixth Directive.
      
      29      In the light of the above considerations, the answer to the question referred must be that Article 13(A)(1)(d) of the Sixth
         Directive, exempting ‘supplies of human organs, blood and milk’ from VAT, must be interpreted as not applying to the activity
         of transporting, in a self‑employed capacity, human organs and samples for hospitals and laboratories.
      
       Costs
      30      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court,
         the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs
         of those parties, are not recoverable.
      
      On those grounds, the Court (Third Chamber) hereby rules:
      Article 13(A)(1)(d) of 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, exempting ‘supplies of human organs,
            blood and milk’ from value added tax, must be interpreted as not applying to the activity of transporting, in a self‑employed
            capacity, human organs and samples for hospitals and laboratories. 
      [Signatures]
      * Language of the case: French.