CopyGene A/S v Skatteministeriet.
Date: 2010-06-10
23. Under the Sixth Directive, the scope of VAT is very wide in that Article 2 thereof, which concerns taxable transactions, refers not only to imports of goods but also to the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such (see, in particular, Case C‑255/02 Halifax and Others  [2006] ECR I‑1609, paragraph 49; Case C‑401/05 VDP Dental Laboratory  [2006] ECR I‑12121, paragraph 22; and Case C-88/09 Graphic Procédé  [2010] ECR I‑0000, paragraph 15). Article 13 of the Sixth Directive nevertheless exempts certain activities from VAT.
24. It is settled case-law that the exemptions referred to 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 as between one Memb er State and another (see, in particular, Case C-349/96 CPP  [1999] ECR I‑973, paragraph 15, and Case C‑473/08 Eulitz  [2010] ECR I‑0000, paragraph 25).
25. The Court has also consistently held that the exemptions in Article 13A of the Sixth Directive are not aimed at exempting from VAT every activity performed in the public interest, but only those which are listed and described in great detail in it (see, in particular, Case 107/84 Commission  v Germany  [1985] ECR 2655, paragraph 17; Case C‑307/01 D’Ambrumenil and Dispute Resolution Services  [2003] ECR I‑13989, paragraph 54; and Eulitz , paragraph 26, and the case-law cited).
26. The terms used to specify the exemptions in Article 13 of the Sixth Directive are to be interpreted strictly, since they constitute exceptions to the general principle that VAT is to be levied on all goods and 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, in particular, Case C‑445/05 Haderer  [2007] ECR I‑4841, paragraph 18, and the case-law cited, and Eulitz , paragraph 27, and the case-law cited).
27. As regards medical services, it is clear from the case-law that Article 13A(1)(b) of the Sixth Directive covers all services supplied in a hospital environment while Article 13A(1)(c) thereof covers medical services provided outside such a framework, both at the private address of the person providing the care and at the patient’s home or at any other place (see, to that effect, Case C‑141/00 Kügler  [2002] ECR I‑6833, paragraph 36). It follows that Article 13A(1)(b) and (c) of the Sixth Directive, which have separate fields of application, are intended to regulate all exemptions of medical services in the strict sense (see Kügler , paragraph 36, and Case C‑106/05 L.u.P.  [2006] ECR I‑5123, paragraph 26).
28. It follows, as the Court has previously ruled, that the concept of ‘medical care’ in Article 13A(1)(b) of the Sixth Directive and that of ‘the provision of medical care’ in Article 13A(1)(c) are both intended to cover services which have as their purpose the diagnosis, treatment and, in so far as possible, cure of diseases or health disorders (see Case C‑45/01 Dornier  [2003] ECR I‑12911, paragraph 48, and the case-law cited, and L.u.P. , paragraph 27).
29. Whilst ‘medical care’ and ‘the provision of medical care’ must have a therapeutic aim, it does not necessarily follow that the therapeutic purpose of a service must be confined within a particularly narrow compass (see Case C‑76/99 Commission  v France  [2001] ECR I‑249, paragraph 23, and Case C‑212/01 Unterpertinger  [2003] ECR I‑13859, paragraph 40).
30. Thus the Court has already ruled that medical services effected for prophylactic purposes may benefit from exemption under Article 13A(1)(b) or (c) of the Sixth Directive. Even in cases where the persons who are the subject of examinations or other medical intervention of a prophylactic nature are not suffering from any disease or health disorder, the inclusion of those services within the meaning of ‘medical care’ and ‘the provision of medical care’ is consistent with the objective of reducing the cost of healthcare, which is common to both the exemption under Article 13A(1)(b) of the Sixth Directive and that under (c) of that paragraph (see, to that effect, L.u.P. , paragraph 29, and the case-law cited). Accordingly, medical services supplied for the purpose of protecting, including maintaining or restoring, human health may benefit from the exemption under Article 13A(1)(b) and (c) of that directive (see, to that effect, Unterpertinger , paragraphs 40 and 41, and D’Ambrumenil and Dispute Resolution Services , paragraphs 58 and 59).
37. On the other hand, if the referring court concluded that the analysis of cord blood actually has a medical diagnostic purpose and does not merely form part of the tests to determine whether the stem cells are viable, the conclusion would follow that there was a supply of diagnostic care within the exemption laid down in Article 13A(1)(b) of the Sixth Directive, subject to compliance with the other requirements laid down by that provision and by that directive.
38. As regards, next, the concept of activities ‘closely related’ to ‘hospital and medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive, it is apparent from the very terms of that provision that it does not envisage services which are unrelated to hospital care for the patients receiving those services or to any medical care which they might receive (see Dornier , paragraph 33, and Joined Cases C‑394/04 and C‑395/04 Ygeia  [2005] ECR I‑10373, paragraph 17).
39. Accordingly, the Court ruled that services fall within the concept of ‘activities closely related’ to hospital or medical care appearing in Article 13A(1)(b) of the Sixth Directive only when they are actually supplied as a service ancillary to the hospital or medical care received by the patients in question and constituting the principal service (see Ygeia , paragraph 18).
40. In that regard, it follows from the case-law that a service may be regarded as ancillary to a principal service if it does not constitute an end in itself, but a means of better enjoying the supplier’s principal service (see Commission v France , paragraph 27; Dornier , paragraph 34; Ygeia , paragraph 19; and Case C‑434/05 Horizon College  [2007] ECR I-4793, paragraph 29, and the case-law cited). As regards medical services, the Court has stated that, taking account of the objective pursued by the exemption provided for in Article 13A(1)(b) of the Sixth Directive, only the supply of services which are logically part of the provision of hospital and medical-care services, and which constitute an indispensable stage in the process of the supply of those services to achieve their therapeutic objectives, is capable of amounting to ‘closely related activities’ within the meaning of that provision (see, to that effect, Ygeia , paragraph 25).
45. Further, the exemption provided for in Article 13A(1)(b) of the Sixth Directive does not impose what the referring court describes, in its first question, as a ‘temporal requirement’. Neither the purpose of that exemption nor the general scheme of the Sixth Directive requires that provision to be interpreted as if there were such a requirement. Thus, the possibility put forward in that question that there could be a long period of time between the collection of the cord stem cells concerned and their possible future use for the purposes of hospital or medical care does not, as such, preclude activities such as those at issue in the main proceedings from coming within that exemption, all the more so since, as the referring court points out in the second part of the first question, it is impossible to collect blood containing cord stem cells otherwise than at birth.
46. However, it does not follow that the activities at issue in the main proceedings could be regarded as being services which are ‘closely related’ to ‘hospital and medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive.
47. In that regard, it is established that, whatever the precise figures derived from the current state of scientific knowledge may be, in the case of the majority of the recipients of the activities at issue in the main proceedings, there is not and probably never will be a principal service coming within the concept of ‘hospital and medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive. Thus, the first question is based on the premiss that, when services such as those at issue in the main proceedings are supplied, there is usually no hospital or medical care which has been performed, commenced, necessitated or determined, or even envisaged in its major aspects.
48. Indeed, it is only in the double eventuality that, first, the state of medical science enables or requires use of cord stem cells for the treatment or prevention of a given illness and, second, that illness presents or is likely to present in a specific case that a sufficiently close link would exist between, on the one hand, the hospital and medical care which would constitute the principal service and, on the other, the activities at issue in the main proceedings.
49. In those circumstances, even accepting that the activities at issue in the main proceedings could have no purpose other than that of using the cord stem cells thus preserved in connection with medical care provided in a hospital environment and could not be diverted to other uses, those activities cannot be regarded as actually being supplied as services ancillary to the hospital or medical care received by the patients in question and constituting the principal service.
50. Therefore, those activities do not fall within the concept of activities ‘closely related’ to ‘hospital and medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive. Indeed, since the hospital and medical care have not been performed, commenced or yet envisaged, activities such as those at issue in the main proceedings are merely liable, if certain eventualities come to pass, to be closely related to medical care provided in a hospital environment.
51. As regards, finally, the possibility raised in the fourth question, namely the allogeneic rather than autologous use of the cord stem cells, it is sufficient to observe that that circumstance has, as a rule, no bearing on the conclusions set forth in paragraphs 34 to 50 of the present judgment.
57. In this respect, it should be noted that the rules for interpreting the exemptions in Article 13 of the Sixth Directive set out in paragraph 26 of the present judgment apply to the specific conditions laid down for those exemptions to apply and in particular to those concerning the status or identity of the economic agent performing the services covered by the exemption (see Eulitz , paragraph 42, and the case-law cited).
58. As regards Article 13A(1)(b) of the Sixth Directive, it is clear from the Court’s settled case-law that that provision covers duly recognised establishments pursuing social purposes, such as the protection of human health (see, to that effect, Dornier , paragraph 47).
60. Where necessary, it is for the referring court to determine whether an operator such as CopyGene is ‘of a similar nature’ to hospitals and centres for medical treatment or diagnosis. It should be noted, as the Court has already ruled, that since diagnostic medical tests, in the light of their therapeutic purpose, come within the concept of ‘medical care’ as referred to in Article 13A(1)(b) of the Sixth Directive, a laboratory governed by private law and undertaking analyses must be regarded as being an establishment ‘of a similar nature’ to ‘hospitals’ and ‘centres for medical treatment or diagnosis’ within the meaning of that provision (see L.u.P. , paragraphs 18 and 35). That being so, in the present case, CopyGene, in answer to a question at the hearing before the Court, stated in essence that, usually, it analyses cord stem cells solely in order to ascertain whether there are sufficient ‘viable’ cells to justify the preservation of the sample in question.
62. Therefore, the fact that the Kingdom of Denmark has not exercised the right, provided for by Article 13A(2)(a) of the Sixth Directive, to make the granting to bodies other than those governed by public law of the exemption provided for in Article 13A(1)(b) subject, in each individual case, to one or more of the conditions referred to later in paragraph 2, does not affect the possibility that an establishment may be recognised for the purposes of granting the exemption referred to in Article 13A(1)(b) of the Sixth Directive (see, by analogy, Dornier , paragraph 66).
63. It is thus, in principle, for the national law of each Member State to lay down the rules according to which such recognition may be granted to establishments which request it. The Member States enjoy a discretion in this regard ( Dornier , paragraphs 64 and 81, and L.u.P. , paragraph 42).
64. Where a taxable person seeks the status of an establishment duly recognised for the purposes of Article 13A(1)(b) of the Sixth Directive, it is for the competent authorities to observe the limits of the discretion conferred upon them by the latter provision in applying the principles of European Union law, in particular the principle of equal treatment which, in the field of VAT, takes the form of the principle of fiscal neutrality (see, to that effect, Dornier , paragraph 69, and L.u.P. , paragraph 48).
65. In that regard, in order to determine which establishments should be ‘recognised’ under that provision, the national authorities should, in accordance with European Union law and subject to review by the national courts, take into consideration a number of factors, which include the public interest of the activities of the taxable person in question, the fact that other taxable persons carrying on the same activities already have similar recognition, and the fact that the costs incurred for the treatment in question may be largely met by health insurance schemes or other social security bodies (see, to that effect, Kügler , paragraphs 57 and 58; Dornier , paragraphs 72 and 73; and L.u.P. , paragraph 53).
71. It should, however, be made clear that the considerations set forth in paragraphs 69 and 70 of the present judgment do not mean that the exemption under Article 13A(1)(b) of the Sixth Directive must be systematically excluded when the services supplied are not reimbursed by the social security authorities. It is rather a factor which must be weighed in the balance, and which could be outweighed, for example, by the necessity to ensure equal treatment. Indeed, it is also apparent from the case-law that, if, for example, a taxable person’s situation is comparable to that of other operators providing the same services in comparable situations, the mere fact that the cost of those services is not fully covered by the social security authorities does not justify a difference in the treatment of providers for VAT purposes (see, to that effect, Dornier , paragraph 75).
72. Furthermore, contrary to the Greek Government’s suggestion, the mere fact that a taxable person such as CopyGene is an establishment governed by private law does not automatically mean that such a taxable person’s activities could not come within the exemption under Article 13A(1)(b) of the Sixth Directive. When the Community legislature intended to restrict the grant of the exemptions under Article 13A(1) of the Sixth Directive to certain non-profit-making or non-commercial entities, it said so expressly, as is clear from subparagraphs (l), (m) and (q) thereof (see Case C‑498/03 Kingscrest Associates and Montecello [2005] ECR I-4427, paragraph 37).