© 2025 by Michael Firth KC, Gray's Inn Tax Chambers
Contact: michael.firth@taxbar.com
H7. Medical exemptions
GENERAL
Domestic law exemptions
Medical care by registered medical professionals
"(1) The supply of services consisting in the provision of medical care by a person registered or enrolled in any of the following—
(a) the register of medical practitioners;
(b) either of the registers of ophthalmic opticians or the register of dispensing opticians kept under the Opticians Act 1989 or either of the lists kept under section 9 of that Act of bodies corporate carrying on business as ophthalmic opticians or as dispensing opticians;
(c) the register kept under the Health Professions Order 2001;
(ca)the register of osteopaths maintained in accordance with the provisions of the Osteopaths Act 1993;
(cb)the register of chiropractors maintained in accordance with the provisions of the Chiropractors Act 1994;
(d) the register of qualified nurses, midwives and nursing associates maintained under article 5 of the Nursing and Midwifery Order 2001
Medical care by dentists, dental prostheses
"(2) The supply of any services consisting in the provision of medical care, or the supply of dental prostheses, by—
(a) a person registered in the dentists’ register;
(b) a person registered in the dental care professionals register established under section 36B of the Dentists Act 1984;
(2A) The supply of any services or dental prostheses by a dental technician.
Medical care by pharmacists
(3) The supply of any services consisting in the provision of medical care by a person registered in the register maintained under article 19 of the Pharmacy Order 2010 or in the register of pharmaceutical chemists kept under the Pharmacy (Northern Ireland) Order 1976.
Medical care in any hospital etc.
(4) The provision of care or medical or surgical treatment and, in connection with it, the supply of any goods, in any hospital or state-regulated institution.
Supply of a deputy for a registered medical practitioner
(5) The provision of a deputy for a person registered in the register of medical practitioners
Human products
(6) Human blood.
(7) Products for therapeutic purposes, derived from human blood.
(8) Human (including foetal) organs or tissue for diagnostic or therapeutic purposes or medical research.
EU law exemptions
"(b) hospital and medical care and closely related activities undertaken by bodies governed by public law or, under social conditions comparable with those applicable to bodies governed by public law, by hospitals, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature;
(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;
(d) the supply of human organs, blood and milk;
(e) the supply of services by dental technicians in their professional capacity and the supply of dental prostheses by dentists and dental technicians;" (Article 132)
Defining the professional qualifications
- Member State permitted to define qualifications and limit exemption to care within scope of expertise
"[30] That discretion covers not only the power to define the qualifications required to carry out the said professions, but also the power to define the specific medical-care activities which are covered by such professions. In fact, since the various qualifications acquired by the service providers do not necessarily prepare them to provide all types of care, a Member State is entitled to take the view, in the exercise of its discretion, that the definition of paramedical professions would be incomplete if it were limited to imposing general requirements as to the qualifications of providers, without specifying the care in respect of which they are qualified in the context of those professions." (Solleveld C-443/04)
- Must take account of aims of provision
"[41] That discretion is not however unlimited, as Member States must take account, first, of the intended aim of that provision, which is to ensure that the exemption applies only to medical care provided by practitioners with the required professional qualifications and, second, of the principle of fiscal neutrality (see, to that effect, judgment of 27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraphs 31, 36 and 37, and of 27 June 2019, Belgisch Syndicaat van Chiropraxie and Others, C‑597/17, EU:C:2019:544, paragraph 25).
[42] In the first place, the Member States must ensure that the exemption laid down in that provision is applied only to the provision of medical care of sufficiently high quality (see, to that effect, judgment of 27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraph 37, and of 27 June 2019, Belgisch Syndicaat van Chiropraxie and Others, C‑597/17, EU:C:2019:544, paragraph 26)." (X GmbH C-48/19)
- May require additional qualifications for medical care by phone to ensure high quality
"[43] In that regard, the requirement of sufficiently high quality applies independently of the means of communication chosen for the provision of the care.
[44] It is accordingly for the Member States to determine the professional qualifications enabling the providers concerned to offer sufficiently high quality care, as the case may be, by requiring the latter to acquire additional professional qualifications compared to those which are necessary for the provision of medical care other than by telephone." (X GmbH C-48/19)
- Subject to fiscal neutrality where supplies are of equivalent quality
"[45] In the second place, the Member States must respect the principle of fiscal neutrality, which precludes treating similar service providers, which are thus in competition with each other, differently for VAT purposes (judgments of 27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraph 39 and the case-law cited, and of 27 June 2019, Belgisch Syndicaat van Chiropraxie and Others, C‑597/17, EU:C:2019:544, paragraph 28).
[46] Thus, in particular, it is for the referring court to determine whether the exclusion of consultations and patient support programmes performed by nurses and medical assistants from the exemption under Article 132(1)(c) of Directive 2006/112 is contrary to the principle of fiscal neutrality in so far as, due to their professional qualifications, those practitioners are able to ensure that such services provided by telephone are of an equivalent quality level to that of services performed by other providers using the same means of communication." (X GmbH C-48/19)
Distinction between the exemptions
- Medical care in hospital v. medical care outside hospital
"[21] It is also important to note that the criterion for drawing a clear distinction between the two tax exemptions under those provisions is less the nature of the service than the place where it is provided. Article 132(1)(b) of the directive covers all services supplied in a hospital environment while Article 132(1)(c) thereof covers 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, judgment of 8 June 2006, L.u.P., C‑106/05, EU:C:2006:380, paragraph 22 and judgment of 2 July 2015, De Fruytier, C‑334/14, EU:C:2015:437, paragraph 19)." (Peters C-700/17)
"[47] Next, as correctly pointed out by the Advocate General in points 44 to 46 of her Opinion, the criterion for drawing a clear distinction between the two tax exemptions provided for in Article 13A(1)(b) and (c) is less the nature of the service than the place where it is provided. The Court has held that, under Article 13A(1)(b), it is appropriate to exempt services encompassing a whole 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 and within the framework of a confidential relationship between the patient and the person providing the care (Commission v United Kingdom, cited above, paragraph 33)." (Dornier C-45/01)
"[36] It follows that Article 13(A)(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. Article 13(A)(1)(b) exempts all services supplied in a hospital environment while Article 13(A)(1)(c) is designed to exempt 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." (Kugler C-141/00)
- Professionals exemption applies to medical care outside a hospital setting
"[40] It follows that only medical care provided in the exercise of the medical and paramedical professions, outside a hospital setting, for the purpose of prevention, diagnosis or treatment qualifies for exemption under Article 13(A)(1)(c) of the Sixth Directive, to the exclusion of other activities relating to general care and domestic help." (Kugler C-141/00)
- But location not a condition
"[19] In that regard, it must be noted that Article 132(1)(c) of Directive 2006/112 refers solely, in the wording of the first condition set, to the concept of ‘the provision of medical care’, without any mention of factors in relation to the location of the provision of the service.
...
[21] Accordingly, it follows from that that, for Article 132(1)(c) of that directive to apply, a service which fulfils the conditions referred to in that provision is capable of coming within the exemption laid down in that provision, regardless of where it is provided." (X GmbH C-48/19)
- Medical professional exemption normally applies in the framework of confidential relationship, but that is not a condition
"[34] Moreover, to add such a condition is unwarranted in light of the objective of that provision of reducing the cost of medical care and making that care more accessible to individuals (see, to that effect, judgment of 13 March 2014, Klinikum Dortmund, C‑366/12, EU:C:2014:143, paragraph 28 and the case-law cited), to the extent that those services are of sufficient quality (see, to that effect, judgment of27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraph 37), without the existence of a confidential relationship between the patient and the person providing the care being decisive in that regard.
[35] It is true that the Court has held that, in contrast to Article 13(A)(1)(b) of the Sixth Directive, the exemption laid down in Article 13(A)(1)(c) of that directive applies to services provided outside hospitals and similar establishments and within the framework of a confidential relationship between the patient and the person providing the care, a relationship which is normally established in the consulting room of that person (see, to that effect, judgment of 23 February 1988, Commission v United Kingdom, 353/85, EU:C:1988:82, paragraph 33 and judgment of 10 September 2002, Kügler, C‑141/00, EU:C:2002:473, paragraph 35).
[36] However, it cannot follow from those findings that the exemption under Article 132(1)(c) of Directive 2006/112 applies only to the provision of medical care within the framework of a confidential relationship between the person providing the care and the person being treated.
[37] It must be noted that the purpose of those findings was merely to highlight the difference between that provision and Article 13(1)(b) of the Sixth Directive with respect to defining the field of application of the two exemptions laid down in those provisions.
...
[39] Similarly, the existence of a confidential relationship between the patient and the person providing the care was raised by the Court in paragraph 35 of judgment of 10 September 2002, Kügler (C‑141/00, EU:C:2002:473), in order to highlight the difference between the two exemptions under Article 13(A)(1)(b) and (c) of the Sixth Directive as regards the place where the services must be supplied, illustrating the framework within which the services under Article 13(A)(1)(c) of that directive are generally provided." (Peters C-700/17)
- Contrary to fiscal neutrality for exemption to depend on where medical tests are carried out
"[29] Moreover, the Court has stated that, it would be contrary to the principle of fiscal neutrality 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, judgment of 8 June 2006, L.u.P., C‑106/05, EU:C:2006:380, paragraph 32).
[30] Therefore, the answer to the first question is that Article 132(1)(b) and (c) of Directive 2006/112 must be interpreted as meaning that the provision of medical care such as that at issue in the main proceedings, supplied by a medical specialist in clinical chemistry and laboratory diagnostics, is capable of falling within the scope of the exemption under Article 132(1)(c) of that directive, where it fails to meet all the conditions for the application of the exemption under Article 132(1)(b) of the directive." (Peters C-700/17)
- Consider both exemptions if conditions for one not satisfied
"[27] In that regard, it must be stated that the provision of medical care which does not meet all the requirements laid down in order to benefit from the exemption from VAT under Article 132(1)(b) of the directive is not, as a matter of principle, excluded from the exemption laid down in Article 132(1)(c) of that directive.
[28] It is in no way apparent from the wording of Article 132(1)(b) of Directive 2006/112 that that provision is intended to limit the scope of Article 132(1)(c) of the directive, which concerns, as has been noted in paragraph 21 of the present judgment, services provided outside of the structures falling under Article 132(1)(b) of that directive, in the context of the exercise of medical and paramedical professions as defined by the Member States." (Peters C-700/17)
Purpose
- Reducing the cost of medical care
"[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)." (LUP C-106/05)
- Not to disadvantage private medical operators, but to ensure fair competition
"[70] ... One may observe that, generally speaking, it was not the intention of the EU legislature to disadvantage from a tax point of view the promoters of private medicine but rather to ensure that competition between them and public bodies remain fair." (I GmbH C-228/20, AG Hogan)
- Not aimed at services having a very indirect or distant effect on preventing heatlh conditions (e.g. nutrition monitoring)
"[33] Any other interpretation would have the consequence of extending the scope of the exemption laid down in Article 132(1)(c) of Directive 2006/112 beyond the rationale reflected in the wording of that provision as well as the heading of Chapter 2 of Title IX of that directive. Any service performed in the exercise of a medical or paramedical profession, having, even in a very indirect or distant manner, the effect of preventing certain health conditions, would fall within the exemption laid down by that provision, which would not correspond with the intention of the EU legislature and the requirement that such an exemption be interpreted strictly, as recalled in paragraph 22 of the present judgment. As the Advocate General observed in point 61 of her Opinion, a merely uncertain link with a health condition, without a specific risk of health impairment, cannot suffice in that regard." (Frenetikexito C-581/19)
ESTABLISHMENT OF A SIMILAR NATURE
- Can include laboratory or individualised entity performing comparable function
"[23] With regard to the application of Article 132(1)(b) of the directive to such services, the Court has already held that a laboratory or an individualised entity performing a comparable function is capable of constituting an establishment ‘of a similar nature’ to ‘hospitals’ and ‘centres for medical treatment or diagnosis’ within the meaning of Article 132(1)(b) of Directive 2006/112 (see, to that effect, judgment of 2 July 2015, De Fruytier, C‑334/14, EU:C:2015:437, paragraph 35 and the case-law cited)." (Peters C-700/17)
"[130] Regarding the second issue, LuP requires us to hold that GSTS is similar to the other subparagraph (b) establishments: see paragraph 71 above. We would have concluded in any event that GSTS satisfies this part of the requirements of subparagraph (b). We would not have concluded that GSTS is a hospital. Without suggesting that it was, Ms Foster understandably drew our attention to the fact that its laboratories are still on hospital premises (the contracts require the Trusts’ consent to any relocation by GSTS), sparking debate before us as to whether the GSTS laboratories needed to be on the hospital site. We find that GSTS occupies laboratories on hospital premises for a combination of the reasons that the laboratories already existed when GSTS was set up, making it convenient to continue to use them and that a pathology laboratory needs to be situated at least reasonably close to the hospital it serves; self-evidently, the closer it is, the more easily can samples be passed from the hospital to the laboratory (communication of results can nowadays be done electronically) and can hospital staff visit the laboratory. The necessary degree of proximity depends on the urgency of the case: some test results are required urgently. None of this really assists us with the present issue.
[131] The words ‘centre for medical treatment or diagnosis’, on the other hand, are fairly wide. We consider that the draftsman intended to capture establishments where patients are diagnosed (or treated) even if they did not qualify for the label of a ‘hospital’; the Directive had to cater for the diversity of forms of healthcare establishment across the Member States. The subparagraph then includes establishments ‘similar’ to those. We would have concluded that an establishment is similar to a centre for diagnosis if it is a centre for an activity similar to (even if not exactly equating to) diagnosis, and that GSTS meets this description." (GSTS Pathology Services LLP v. HMRC [2014] UKFTT 211 (TC), Judge Paines QC)
- Does not include an individual transporter
"[36] In the present case it must be held that unlike, in particular, a laboratory governed by private law and undertaking diagnostic medical tests with a therapeutic purpose, a self-employed transporter such as Ms De Fruytier is not an individualised entity performing the same type of particular function as hospitals or centres for medical treatment or diagnosis. Therefore, such a transporter cannot be characterised as ‘an establishment of a similar nature’ to those establishments or centres, within the meaning of Article 13(A)(1)(b) of the Sixth Directive, and, consequently, does not qualify for a VAT exemption on the basis of that provision."(De Fruytier C-334/14)
MEDICAL CARE
- Services which have as their purpose diagnosis, treatment, cure of diseases/health disorders
"[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)." (LUP C-106/05)
- Medical interventions carried out for a non-therapeutic purpose not medical care
"[38] The Court has already held, in Case C-384/98 D. [2000] ECR I-6795, at paragraph 18, that the concept of provision of medical care does not lend itself to an interpretation which includes medical interventions carried out for a purpose other than that of diagnosing, treating and, in so far as possible, curing diseases or health disorders." (Kugler C-141/00)
- Therapeutic purpose not interpreted narrowly
"[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)." (Copygene C-262/08)
"[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... " (LUP C-106/05)
- Maintaining or restoring human health included
"[29] ...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)..." (LUP C-106/05)
- Prophylactic services to persons not suffering any disease/health disorder included
"[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)." (Copygene C-262/08)
"[29] ... 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...
...
[31] ... 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)." (LUP C-106/05)
- General health purpose not sufficient (e.g. nutrition advice)
"[30] In that regard, it is not disputed that a nutrition monitoring service provided in a sports facility may, in the medium- and long-term or viewed very broadly, be a tool to prevent certain conditions, such as obesity. However, it must be noted that the same applies to exercise itself, the role of which is recognised, by way of example, as limiting the occurrence of cardiovascular diseases. Such a service therefore, in principle, has a health purpose but not, or not necessarily, a therapeutic purpose.
[31] Accordingly, where there is no indication that it is provided for purposes of prevention, diagnosis, treatment of a condition or restoration of health, and accordingly with a therapeutic purpose, within the meaning of the case-law cited in paragraphs 24 and 26 of the present judgment, which it is for the referring court to determine, a nutrition monitoring service, such as that provided in the case in the main proceedings, does not fulfil the criterion of an activity in the public interest common to all the exemptions laid down in Article 132 of Directive 2006/112 and, consequently, does not fall within the scope of the exemption laid down in Article 132(1)(c) of that directive, with the result that it is, in principle, subject to VAT." (Frenetikexito C-581/19)
- Services ensuring a resource (stem cells) will be available in the uncertain event that medical treatment becomes necessary not medical care
"[36] In any event, while the detection of illness may admittedly be one of the possible purposes for collecting cord stem cells, it appears, from the file before the Court, that the services provided by CopyGene seek only to ensure that a particular resource will be available for medical treatment in the uncertain event that it becomes necessary, but they do not constitute, as such, activities seeking to avert, avoid or prevent disease, injury or health problems, or to detect latent or incipient conditions. Were that the case, which it is, where necessary, for the referring court to determine, activities such as those at issue in the main proceedings could not be regarded as being, by themselves, preventive." (Copygene C-262/08)
- Includes medical care provided by phone
"[23] In view of all of those factors, it should be noted that the provision of care provided by telephone is capable of coming within the VAT exemption laid down in Article 132(1)(c) of Directive 2006/112 if it fulfils all of the conditions for applying that exemption.
...
[27] To that end, it will be for the referring court to determine whether those consultations have a therapeutic purpose, as that is the determining factor in whether the provision of a medical service must be exempt from VAT (see, to that effect, judgments of 20 November 2003, Unterpertinger, C‑212/01, EU:C:2003:625, paragraphs 40 and 42, and of 27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraph 24 and the case-law cited)." (X GmbH C-48/19)
EXAMPLES (WHAT IS MEDICAL CARE)
Medical care
- Psychotherapeutic treatment by qualified psychologists is medical care
"[50] It follows from the foregoing considerations that the term medical care in Article 13A(1)(b) of the Sixth Directive must be interpreted as covering all provision of medical care envisaged in letter (c) of the same provision, including services provided by persons who are not doctors but who provide paramedical services, such as psychotherapeutic treatment given by qualified psychologists." (Dornier C-45/01)
- Laboratory tests are medical care (even to persons who are not ill), not just closely related
"[30] Moreover, medical tests which, as in the present case, are prescribed by general practitioners as part of the care they provide may contribute towards maintaining human health because, like any medical service effected for prophylactic purposes, they allow for the observation and examination of patients before it becomes necessary to diagnose, care for or heal a potential illness." (LUP C-106/05)
- Glasses dispensation service by optician is medical care, even if optician does not do measuring
"[163] As to whether the services concerned constitute medical care, we bear in mind the principles that we established from our analysis of the authorities set out above and in particular:
(1) the fact that there must be a therapeutic purpose: as we have established the translation of the prescription into the optical advice under the supervision of the dispensing optician is part of the therapeutic process of correcting defective eyesight and as established by Verigen (see paragraph 48 above) a service which is part of the process can qualify;
(2) the fact that the services are provided remotely does not prevent the exemption applying: see LuP ( see(see paragraph 47 above). Accordingly we reject Mr McGurk’s submission that the fact that the services are not provided face to face means they cannot constitute medical care.
(3) There is nothing in the authorities which suggests that the fact that the dispensing optician does not personally carry out the measuring means that none of the services amount to medical care. It is clear from both Leightons and Southport Vision Plus that each part of the service must be examined separately and a view taken as to whether it constitutes medical care. In our view the way in which Glasses Direct’s dispensing opticians participate in the measuring process by preparing or supervising the explanatory material to assist the customer and the steps taken to establish pupillary distance, albeit that more aftercare services may result as a result of the lack of face to face contact, puts these services in no different category from the same services provided on the High Street.
(4) We should not confine the exemption to an especially narrow compass. Bearing in mind the regulatory scheme and the importance of the objective of the exemption in reducing the cost of healthcare we should give considerable weight to the fact that Glasses Direct’s business model helps to reduce the cost of the provision of corrective spectacles as compared with their cost on the High Street. In addition, we should regard services which are not too remote from the therapeutic process to benefit from the exemption. We therefore conclude that all of the matters referred to in Mr McGurk’s submissions, as detailed in paragraph 160 above, which he contends do not constitute medical care are so closely connected with the therapeutic process that it would be artificial to separate them; and in particular there is no basis on which we should seek to draw a distinction between a quality control process and medical care when carried out by a dispensing optician.
[164] We therefore conclude that Glasses Direct has satisfied us that all of the services provided by their dispensing opticians as set out in paragraph 141 above amount to medical care within the terms of the exemption." (Prescription Eyewear Limited v. HMRC [2013] UKFTT 357 (TC), Judge Herrington)
- Consultation explaining diagnoses and potential therapies relevant to the customer's own health are medical care
"[31] In the present case, consultations which consist of explaining diagnoses and potential therapies, as well as suggesting changes to treatment followed, since they enable the person concerned to understand his or her medical situation, and, as the case may be, to take action as a result, in particular by taking, or not taking particular medication, are likely to have a therapeutic purpose and, on that basis, to come within the concept of ‘provision of medical care’ within the meaning of Article 132(1)(c) of that directive.
[32] In contrast, services which consist of communicating information on diseases and therapies, but which are not likely, as a result of their general nature, to contribute to protecting, maintaining or restoring human health, cannot come within that concept." (X GmbH C-48/19)
Not medical care
- General care/domestic help not medical care (may be welfare)
"[44] In this connection, it need only be stated that it is clear from the terms in which Article 13(A)(1) of the Sixth Directive is couched that, while the provision of care of a therapeutic nature is exempt by virtue of Article 13(A)(1)(c), the provision of general care and domestic help by an out-patient care service to those in a state of physical or economic dependence, as the persons to whom Kügler supplied services were, is in principle linked to social assistance, so that it falls within the concept of services closely linked to welfare and social security work referred to in Article 13(A)(1)(g) of the Sixth Directive." (Kugler C-141/00)
- Fitness training and nutrition advice
"[30] In that regard, it is not disputed that a nutrition monitoring service provided in a sports facility may, in the medium- and long-term or viewed very broadly, be a tool to prevent certain conditions, such as obesity. However, it must be noted that the same applies to exercise itself, the role of which is recognised, by way of example, as limiting the occurrence of cardiovascular diseases. Such a service therefore, in principle, has a health purpose but not, or not necessarily, a therapeutic purpose.
[31] Accordingly, where there is no indication that it is provided for purposes of prevention, diagnosis, treatment of a condition or restoration of health, and accordingly with a therapeutic purpose, within the meaning of the case-law cited in paragraphs 24 and 26 of the present judgment, which it is for the referring court to determine, a nutrition monitoring service, such as that provided in the case in the main proceedings, does not fulfil the criterion of an activity in the public interest common to all the exemptions laid down in Article 132 of Directive 2006/112 and, consequently, does not fall within the scope of the exemption laid down in Article 132(1)(c) of that directive, with the result that it is, in principle, subject to VAT." (Frenetikexito C-581/19)
- Stem cell collection, transport and analysis not medical care unless there is an immediate diagnostic purpose
"[36] In any event, while the detection of illness may admittedly be one of the possible purposes for collecting cord stem cells, it appears, from the file before the Court, that the services provided by CopyGene seek only to ensure that a particular resource will be available for medical treatment in the uncertain event that it becomes necessary, but they do not constitute, as such, activities seeking to avert, avoid or prevent disease, injury or health problems, or to detect latent or incipient conditions. Were that the case, which it is, where necessary, for the referring court to determine, activities such as those at issue in the main proceedings could not be regarded as being, by themselves, preventive.
[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." (Copygene C-262/08)
- Transport of samples not medical care
"[23] In the present case, it must be held that an activity such as that at issue in the main proceedings, namely transporting human organs and samples of human origin for various hospitals and laboratories, clearly does not constitute ‘medical care’ or ‘the provision of medical care’ within the meaning of Article 13(A)(1)(b) and (c) of the Sixth Directive, since it is not covered by medical services which have as their direct purpose the actual diagnosis, treatment or cure of diseases or health disorders, or the actual protection, maintenance or restoration of health (see, to that effect, the judgment in Future Health Technologies, C‑86/09, EU:C:2010:334, paragraph 43)." (De Fruytier C-334/14)
- Provision of information of administrative nature not medical care
"[33] Similarly, services which consist of providing information of an administrative nature, such as the contact details of a doctor or those of a conciliation body, cannot be treated in the same way as services coming under the exemption laid down in Article 132(1)(c) of that directive." (X GmbH C-48/19)
MEDICAL PROFESSIONAL EXEMPTION
Persons supervised by professional
- Medical care provided under supervision of professional can qualify
"[9] ...Note 2 therefore makes provision for supplies of medical care made by persons under the supervision of registered or enrolled opticians to be exempt as well as such supplies made directly by persons so registered or enrolled." (Prescription Eyewear Limited v. HMRC [2013] UKFTT 357 (TC), Judge Herrington)
- Online process for dispensing glasses, including guidance prepared by or under supervision of professional
"[159] We have therefore concluded that Glasses Direct’s dispensing opticians do provide all of the services envisaged in the nine stages set out in Leightons, albeit they are delivered by alternative means to face to fact contact. The fact that there are many cases where the services are not provided directly in the sense that glasses can be supplied without any customer contact at all does not alter the position; the various tools and information available on the website and the steps that the customer has to take to order his glasses means that the advice and supervision which is a feature of the High Street practice is delivered by other means. This is reinforced by the fact that all orders are reviewed by a dispensing optician before they are accepted and the glasses despatched." (Prescription Eyewear Limited v. HMRC [2013] UKFTT 357 (TC), Judge Herrington)
SUPPLY CHAIN ISSUES
Identity of provider of medical care
- Company providing medical care can qualify for medical professional exemption
"[20] The Court has held that the exemption envisaged in Article 13A(1)(c) of the Sixth Directive is not dependent on the legal form of the taxable person supplying the medical or paramedical services referred to in that provision (Case C-141/00 Kügler [2002] ECR I-6833).
[21] The answer to the third question must therefore be that since the exemption envisaged in Article 13A(1)(c) of the Sixth Directive is not dependent on the legal form of the taxable person providing the medical or paramedical services referred to in that provision, psychotherapeutic treatment provided by a foundation governed by private law and given by psychotherapists employed by the foundation may benefit from that exemption." (Dornier C-45/01)
"[30] The principle of fiscal neutrality precludes, inter alia, economic operators carrying on the same activities from being treated differently as far as the levying of VAT is concerned. It follows that that principle would be disregarded if the possibility of relying on the exemption which is envisaged for the provision of medical care referred to in Article 13(A)(1)(c) were dependent on the legal form in which the taxable person carries on his activity (see, to that effect, Gregg, cited above, paragraph 20)." (Kugler C-141/00)
Activities upstream from those provided by the ultimate service provider
- Medical care exemption applies to subcontracted laboratory tests
"[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)." (LUP C-106/05)
- Individuals can rely on exemption for medical care provided by bodies governed by public law etc.
"[19] That interpretation, to the effect that the terms 'establishment‘ and 'organisation‘ do not refer only to legal persons, is, in particular, consistent with the principle offiscal neutrality inherent in the common system of VAT and in compliance with which the exemptions provided for in Article 13 of the Sixth Directive must be applied (see, to that effect, Case C-283/95 Fischer [1998] ECR I-3369, paragraph 27).
[20] The principle of fiscal neutrality precludes, inter alia, economic operators carrying on the same activities from being treated differently as far as the levying of VAT is concerned. It follows that that principle would be frustrated if the possibility of relying on the benefit of the exemption provided for activities carried on by the establishments or organisations referred to in Article 13A(1)(b) and (g) was dependent on the legal form in which the taxable person carried on his activity." (Gregg C-216/97)
- Medical professional exemption can apply to supplies upstream
"[32] In that regard, it must be noted that it follows from a literal interpretation of Article 132(1)(c) of the directive that the supply of a service must be exempt if it satisfies two conditions, namely, first, that it constitutes provision of medical care and, second, that it is carried out in the exercise of the medical and paramedical professions as defined by the Member State concerned (see, to that effect, judgment of 10 September 2002, Kügler, C‑141/00, EU:C:2002:473, paragraph 27 and judgment of 27 April 2006, Solleveld and van den Hout-van Eijnsbergen, C‑443/04 and C‑444/04, EU:C:2006:257, paragraph 23).
[33] It does not in any way follow from the wording of that provision that, in order for the provision of medical care to be exempt, it must be supplied within the framework of a confidential relationship between the person providing the care and the person being treated." (Peters C-700/17)
CLOSELY RELATED SUPPLIES
- Only applies to supplies closely related to the hospital care etc. exemption
"Furthermore, the Court has already held that, unlike the wording of Article 13(A)(1)(b) of the Sixth Directive, the wording of Article 13(A)(1)(c) thereof does not contain any reference to activities closely linked to the provision of medical care, despite the fact that Article 13(A)(1)(c) immediately follows Article 13A(1)(b). Consequently, the Court has concluded that the concept of activities closely related to the provision of medical care is not relevant to the interpretation of Article 13(A)(1)(c) of the Sixth Directive (see, to that effect, judgment in Klinikum Dortmund, C‑366/12, EU:C:2014:143, paragraph 32)." (De Fruytier C-334/14)
- Does not call for especially narrow interpretation in light of purpose
"[23] As the Advocate General noted in point 23 of his Opinion, that concept does not, however, call for an especially narrow interpretation since the exemption of activitiesclosely related to hospital and medical care is designed to ensure that the benefits flowing from such care are not hindered by the increased costs of providing it that would follow if it, or closely related activities, were subject to VAT." (Commission v. France C-76/99)
- Does not include supplies which are an end in themselves rather than a means of better enjoying other types of service
"[34] In this case, it is common ground that the psychotherapeutic treatment given in Dornier's out-patient facility by qualified psychologists generally constitutes services provided to the patients as an end in themselves and not as a means of better enjoying other types of services. In so far as that treatment is not ancillary to hospital or medical care, it is not an activity closely related to services exempted under Article 13A(1)(b) of the Sixth Directive.
[35] Accordingly, the Court finds that psychotherapeutic treatment given in an out-patient facility of a foundation governed by private law by qualified psychologists who are not doctors is an activity closely related to hospital or medical care within the meaning of Article 13A(1)(b) of the Sixth Directive only when such treatment is actually given as a service ancillary to the hospital or medical care received by the patients in question and constituting the principal service."(Dornier C-45/01)
- No temporal requirement
"[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." (Copygene C-262/08)
- But there must be sufficient confidence that the supply will be used in the future for medical care
"[28] The Court has already held that the concept of activities ‘closely related’ to ‘hospital or medical care’ within the meaning of Article 13(A)(1)(b) of the Sixth Directive is to be interpreted as not covering activities such as the collection and transport of blood where the medical care provided in a hospital environment to which those activities are merely potentially related has not been performed, commenced or yet envisaged (see judgment in Future Health Technologies, C‑86/09, EU:C:2010:334, paragraph 49). Therefore, transportation of samples of human origin cannot be characterised as an activity ‘closely related’ to ‘hospital or medical care’." (De Fruytier C-334/14)
"[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." (Copygene C-262/08)
Examples
- Transport of sample for the purpose of testing is closely related
"[24] For the purpose of any possible exemption from VAT for the act of transmitting medical samples, it is appropriate to have regard to the purpose for which those samples are taken. Thus, where a duly authorised health-care worker orders, for the purpose of making his diagnosis and with a therapeutic aim, that his patient should undergo an analysis, the transmission of the sample, which logically takes place between the taking of the sample and the analysis itself, must be regarded as closely related to the analysis and must therefore be exempt from VAT (see, as regards services which, since they do not have a therapeutic aim, must be subject to VAT, Case C-384/98 D v W [2000] ECR I-0000, paragraph 19)." (Commission v. France C-76/99)
- Use of stem cells for medical treatment too uncertain
"[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." (Copygene C-262/08)
HUMAN PRODUCTS
- Supply of blood to manufacture medicinal products not exempt
"[35] By contrast, it follows that so-called ‘industrial’ plasma, that is to say, plasma the supply of which does not contribute directly to activities in the public interest, since it is intended to be incorporated into an industrial production, in particular with a view to manufacturing medicinal products, cannot come under the exemption referred to in Article 132(1)(d) of Directive 2006/112.
[36] Consequently, only plasma actually intended for direct therapeutic use comes under the exemption laid down in Article 132(1)(d) of Directive 2006/112." (TMD C-412/15)