L.u.P. GmbH v Finanzamt Bochum-Mitte.
Date: 2006-06-08
18. By its question, the national court seeks to determine the conditions which, under Article 13A of the Sixth Directive, may be imposed on the granting of the VAT exemption for medical tests carried out by laboratories governed by private law outside a centre for treatment on prescription from a general practitioner.
22. According to the Court’s case-law, the criterion for drawing a clear distinction between those two tax exemptions is less the nature of the service than the place where it is provided. Article 13A(1)(b) of the Sixth Directive exempts services encompassing a range of medical care in establishments pursuing social purposes such as the protection of human health, whereas letter (c) of the same provision exempts services provided outside hospitals, be they provided at the service provider’s private residence, the patient’s residence or at any other location (see, to that effect, Case 353/85 Commission  v United Kingdom  [1988] ECR 817, paragraphs 32 and 33; Kügler , paragraphs 35 and 36; and Case C‑45/01 Dornier  [2003] ECR I‑12911, paragraph 47).
The nature of the services at issue in the main proceedings
23. In the present case, although the national court, in its order for reference, as well as L.u.P. and the Commission of the European Communities, in their written observations, seem to agree that medical tests such as those at issue in the main proceedings may be activities ‘closely related’ to ‘medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive, it should be ascertained whether those tests nevertheless may be ‘medical care’ within the meaning of that provision or ‘the provision of medical care’ within the meaning of letter (c) of the same article. If that is so, those tests will be exempt under the Sixth Directive, irrespective of where they are carried out, even though the latter provision does not explicitly provide for exemption of activities closely related to medical care (see Dornier , paragraph 47).
24. According to the Court’s case-law, the exemptions envisaged 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 supplies of services for consideration by a taxable person. However, the interpretation of the terms used in that provision 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 ( Dornier , paragraph 42; and Case C‑498/03 Kingscrest Associates and Montecello  [2005] ECR I‑4427, paragraph 29).
25. As the Court has previously held, the exemptions provided for in Article 13A(1)(b) of the Sixth Directive and letter (c) of the same provision both have the objective of reducing the cost of health care ( Dornier , paragraph 43; and Case C‑307/01 D’Ambrumenil and Dispute Resolution Services  [2003] ECR I‑13989, paragraph 58).
26. Regarding services of a medical nature, the case-law is to the effect that the term ‘medical care’ in Article 13A(1)(b) of the Sixth Directive must be interpreted as covering all provisions of medical care envisaged in letter (c) of the same provision ( Dornier , paragraph 50), since those two provisions are intended to regulate all exemptions of medical services in the strict sense ( Kügler , paragraph 36).
27. It follows that the concept of ‘medical care’ in Article 13A(1)(b) of the Sixth Directive and that of ‘the provision of medical care’ in letter (c) of the same provision 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, to that effect, Dornier , paragraph 48).
29. It should be borne in mind that, 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. The Court’s case-law is to the effect that medical services effected for prophylactic purposes may benefit from the exemption under Article 13A(1)(c) of the Sixth Directive. Even in cases where it is clear that the persons who are the subject of examinations or other medical interventions 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 health care, which is common to both the exemption under Article 13A(1)(b) and that under (c) of that paragraph. Accordingly, medical services effected 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, Case C‑212/01 Unterpertinger  [2003] ECR I‑13859, paragraphs 40 and 41; and D’Ambrumenil and Dispute Resolution Services , paragraphs 58 and 59).
31. In those circumstances, as maintained by L.u.P. at the hearing, and as acknowledged as being possible by the national court and the Commission, the Court finds that, in the light of the objective of reducing health care costs pursued by the abovementioned exemptions, medical tests such as those at issue in the main proceedings, which have as their purpose the observation and examination of patients for prophylactic purposes, may constitute ‘medical care’ within the meaning of Article 13A(1)(b) of the Sixth Directive or ‘the provision of medical care’ within the meaning of letter (c) of the same paragraph (see, to that effect, Commission  v France , paragraph 30).
32. This interpretation is, moreover, consistent with the principle of fiscal neutrality, which precludes treating similar supplies of services, which are thus in competition with each other, differently for VAT purposes (Case C-109/02 Commission  v Germany  [2003] ECR I‑12691, paragraph 20; and Kingscrest Associates and Montecello , paragraph 54). It would be contrary to that principle to make medical tests prescribed by general practitioners subject to a different VAT scheme depending on where they are carried out when they are equivalent from a qualitative point of view in the light of the professional qualifications of the service providers in question (see, to that effect, Dornier , paragraph 49; and Joined Cases C‑443/04 and C‑444/04 Solleveld and van den Hout-van Eijnsbergen  [2006] ECR I-0000, paragraphs 40 and 41).
The type of establishments providing the services at issue in the main proceedings
35. That line of argument cannot be accepted. As the 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 such as that at issue in the main proceedings must be regarded as being an establishment ‘of a similar nature’ as the ‘hospitals’ and the ‘centres for medical treatment or diagnosis’ within the meaning of that provision.
37. The Commission’s argument that it follows from the case-law concerning exemptions that activities carried out upstream from those provided by the ultimate service provider are not exempt (Case 107/84 Commission  v Germany  [1985] ECR 2655, paragraph 20; Case C‑240/99 Skandia  [2001] ECR I‑1951, paragraphs 40 and 41; Case C‑235/00 CSC Financial Services  [2001] ECR I‑10237, paragraphs 39 and 40; and Case C‑472/03 Arthur Andersen  [2005] ECR I‑1719, paragraph 39), so that only medical tests carried out by laboratories on behalf of patients in the context of a direct contractual relationship with those patients comes within the scope of Article 13A(1)(b) of the Sixth Directive, must also be rejected, as that case-law relates to the interpretation of other exemptions, the wording and objectives of which are different from those pursued by that provision (see, to that effect,  Case 107/84 Commission  v Germany , paragraph 13).
38. The Court has held previously with respect to the exemption of samples taken by laboratories for the purpose of medical analysis that it is irrelevant, for the application of Article 13A(1)(b) of the Sixth Directive, whether the laboratory which takes the sample also carries out the analysis, or subcontracts it to another laboratory but remains responsible to the patient for the analysis, or, because of the nature of the analysis at issue, is obliged to send the sample to a specialised laboratory ( Commission  v France , paragraph 28). Likewise, paragraph 67 of D’Ambrumenil and Dispute Resolution Services  indicates that medical checks intended principally to enable the prevention or detection of illness or the monitoring of the health of workers or insured persons may satisfy the conditions for exemption under Article 13A(1)(c) of the Sixth Directive, even if they take place at the request of third parties.
39. It thus follows that medical tests carried out by a laboratory governed by private law, such as the one at issue in the main proceedings, which have as their purpose the observation and examination of patients for prophylactic purposes, may come within the exemption for medical care provided for in Article 13A(1)(b) of the Sixth Directive.
42. As has been held previously, Article 13A(1)(b) of the Sixth Directive does not specify the conditions and procedures for that recognition. 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).
43. Moreover, under Article 13A(2)(a) of the Sixth Directive, Member States may make the grant of the exemption provided for in Article 13A(1)(b) to bodies other than those governed by public law subject to one or more of the conditions referred to therein (see, to that effect, Dornier , paragraph 65). Those optional conditions may also be imposed freely and additionally by Member States for the grant of that exemption (see, to that effect, Kingscrest Associates and Montecello , paragraph 38).
45. Suffice it to note that the wording of Article 13A(2) of the Sixth Directive makes it clear that the conditions laid down in letter (a) thereof may be applied only to medical services coming within Article 13A(1)(b) and not to care exempt under Article 13A(1)(c). The latter provision, moreover, makes the exemption of that care contingent not on the public law status of the care-providing organisation or establishment or its recognition by the Member State concerned, but on the condition that that care must be provided in the exercise of the medical and paramedical professions as defined in national legislation ( Solleveld and van den Hout-van Eijnsbergen , paragraph 23).
48. However, it is also clear from the case-law that it is for the national courts to examine whether the Member States, in imposing such conditions, have observed the limits of their discretion in applying Community principles, in particular the principle of equal treatment (see, to that effect, Dornier , paragraph 69; Kingscrest Associates and Montecello , paragraph 52; and Solleveld and van den Hout-van Eijnsbergen , paragraph 36).
50. It may be stated at the outset that compliance with the principle of fiscal neutrality requires, first, that all of the categories of establishments governed by private law referred to in Article 13A(1)(b) of the Sixth Directive be subject to the same conditions for the purpose of their recognition for the provision of similar services. In the present case, therefore, it is for the national court to ascertain whether the national legislation complies with that requirement or whether, on the contrary, it restricts the application of the conditions in question to certain types of establishments whilst excluding others.
51. Next, in so far as the national legislation makes the exemption of medical care such as that at issue in the main proceedings subject to those conditions, which it is for the national court to determine, it should be borne in mind that the Court has held previously that the condition requiring that the treatment be provided under medical supervision, in so far as it is intended to preclude the exemption from applying to treatment given under the sole responsibility of members of paramedical professions, goes beyond the limits of the discretion allowed to the Member States under Article 13A(1)(b) of the Sixth Directive. The term ‘medical care’ in that provision covers not only treatment provided directly by doctors or other health professionals under medical supervision, but also paramedical services given in hospitals under the sole responsibility of persons who are not doctors ( Dornier , paragraph 70).
52. It follows that, for the purposes of the exemption provided for in Article 13A(1)(b) of the Sixth Directive, a Member State may not validly make recognition of establishments governed by private law subject to a condition requiring that the tests carried out by those establishments be done under medical supervision (see, to that effect, Dornier , paragraphs 71 and 82).
53. As to the second condition, it is also apparent from the case-law that, in order to determine whether establishments governed by private law may be recognised for the purpose of the application of the exemption provided for in Article 13A(1)(b) of the Sixth Directive, the national authorities may, in accordance with Community law and subject to review by the national courts, take into consideration, inter alia and in addition to the public interest of the activities of the taxable person in question and the fact that other taxable persons carrying on the same activities already have similar recognition, the fact that the costs incurred for the treatment in question may be largely met by health insurance schemes or other social security bodies ( Dornier , paragraphs 72 and 73).
54. Accordingly, in requiring, for the purpose of recognition as laboratories governed by private law for the application of that exemption, that at least 40% of the medical tests carried out by the laboratories concerned must be intended for persons insured by a social security authority, the Member State in question did not go beyond the limits of the discretion allowed to it by that provision.