C-212/01 Unterpertinger

JUDGMENT OF THE COURT (Fifth Chamber)

20 November 2003 *

In Case C-212/01,

REFERENCE to the Court under Article 234 EC by the Landesgericht Innsbruck (Austria) for a preliminary ruling in the proceedings pending before that court between

Margarete Unterpertinger

and

Pensionsversicherungsanstalt der Arbeiter,

on the interpretation of Article 13A(1)(c) 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) and the Court's case-law resulting, in particular, from Case C-384/98 D. v W. [2000] ECR I-6795,

* Language of the case: German.

THE COURT (Fifth Chamber),

composed of: A. Rosas (Rapporteur), acting for the President of the Fifth Chamber, D.A.O. Edward and A. La Pergola, Judges,

Advocate General: C. Stix-Hackl,

Registrar: M.-F. Contet, Principal Administrator,

after considering the written observations submitted on behalf of:

— the Austrian Government, by C. Pesendorfer, acting as Agent,

— the United Kingdom Government, by J.E. Collins, acting as Agent, and by N. Paines QC,

— the Commission of the European Communities, by K. Gross and E. Traversa, acting as Agents,

having regard to the Report for the Hearing, after hearing the oral observations of the United Kingdom Government and of the Commission at the hearing on 20 November 2002,

after hearing the Opinion of the Advocate General at the sitting on 30 January 2003,

gives the following

Judgment

Grounds

1By order of 9 May 2001, received at the Court on 23 May 2001, the Landesgericht Innsbruck (Regional Court, Innsbruck) referred to the Court for a preliminary ruling under Article 234 EC two questions on the interpretation of Article 13A(1)(c) 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, hereinafter 'the Sixth Directive'), and the Court's case-law resulting, in particular, from Case C-384/98 D. v W. [2000] ECR I-6795.

2Those questions were raised in the course of a dispute between, initially, Ms Unterpertinger and the Pensionsversicherungsanstalt der Arbeiter (Workers' Pension Insurance Institution) concerning the refusal to pay a disability pension. Following Ms Unterpertinger's death, the only remaining issue in the main proceedings concerns the costs, in particular the question whether value added tax (hereinafter 'VAT') is payable in respect of the services of a medical expert appointed by the referring court.

Legal background

Community law

3Under Article 2(1) of the Sixth Directive VAT is chargeable on 'the supply of goods or services effected for consideration within the territory of the country by a taxable person acting as such'.

4Article 4 of the Sixth Directive provides:

'1. "Taxable person" shall mean any person who independently carries out in any place any economic activity specified in paragraph 2, whatever the purpose or results of that activity.

2. The economic activities referred to in paragraph 1 shall comprise all activities of producers, traders and persons supplying services including mining and agricultural activities and activities of the professions. The exploitation of tangible or intangible property for the purpose of obtaining income therefrom on a continuing basis shall also be considered an economic activity.

5Article 13A(1) provides:

'1. Without prejudice to other Community provisions, 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:

(b) hospital and medical care and closely related activities undertaken by bodies governed by public law or, under social conditions comparable to 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;

...'.

6In D. v W., cited above, the Court held that Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that it does not apply to medical services consisting, not in the provision of care to persons by diagnosing and treating a disease or any other health disorder, but in establishing the genetic affinity of individuals through biological tests.

National legislation

7Paragraphs 1(1)(1) and 6(1)(19) of the Umsatzsteuergesetz (Law on Turnover Taxes) 1994 (BGBl. No 1994/663, hereinafter 'the UStG 1994'), are worded as follows:

'Paragraph 1

Taxable transactions

1. Turnover tax is chargeable on the following transactions:

(1) Deliveries and other supplies which an operator, in the course of his business, makes for consideration within the country. The charge to tax is not excluded because the transaction is effected on the basis of a legal or administrative act or because it is to be regarded as effected under a legal provision;

Paragraph 6

Tax exemptions

1. The following turnover falling within Paragraph 1(1)(1) and (2), shall be exempt from tax:

19. Turnover from activity as a doctor, dentist, psychotherapist, midwife or self-employed supplier...; services supplied to their members by associations whose members belong to the aforesaid professions shall also be exempt from tax, to the extent that such services are used directly to generate turnover which is exempt under this provision and where the associations require their members to pay only their exact respective shares of the common expenses...'

8A circular of the Austrian Federal Ministry of Finances of 17 January 2001 contains the following provisions concerning VAT on expert medical reports:

'Legal position as from 1 January 2001

Medical certification and the making of expert medical reports also forms part of the professional activity of doctors (Paragraph 2(3) of the ÄrzteG (Law on doctors)). The exemption is not excluded because a third party commissions the preparation of an expert report (for example an expert opinion concerning a person's state of health for the purposes of an insurance contract).

However, the exemption does not include medical services which do not consist in providing medical care by diagnosing and treating a disease or any other health disorder [D. v W., cited above]. The exemption under Paragraph 6(1)(19) of the UStG 1994 does not therefore apply:

— to biological tests establishing the genetic affinity of individuals [D. v W.];

— to medical investigations of the pharmacological effects of medicines on humans and dermatological investigations of cosmetic substances;

— to psychological aptitude tests relating to careers guidance'.

9In the order for reference, the Landesgericht Innsbruck states that, under the settled case-law of the Verfassungsgerichthof (Constitutional Court, Austria), such a circular does not bind the ordinary courts in the interpretation and application of legal provisions. It is merely an aid to interpretation provided by the Federal Ministry of Finances to tax offices in the interests of uniform administrative practice.

The main proceedings and the questions referred

10Ms Unterpertinger brought an action before the Landesgericht Innsbruck, sitting as an employment and social security court, against the decision of the Pensionsversicherungsanstalt der Arbeiter rejecting her claim for payment of a disability pension. On 3 April 2000, the referring court ordered that various expert medical reports be obtained concerning the state of health of the applicant in the main proceedings and appointed for that purpose a doctor specialising in psychiatry and neurology.

11Ms Unterpertinger died on 10 February 2001, by which time the expert reports had already been made and sent to the Landesgericht Innsbruck. According to the order for reference, the subject-matter of the main proceedings is now limited to the question of costs, which is between only the expert and the Pensionsver sicherungsanstalt der Arbeiter.

12Under Paragraph 77 of the Arbeits- und Sozialgerichtsgesetz (Employment and Social Security Courts Law), which is a special provision of social security law, experts' fees are borne by the defendant, that is, in the main proceedings, the Pensionsversicherungsanstalt der Arbeiter, irrespective of the outcome of the proceedings. In the course of the hearing on 28 February 2001, that party to the main proceedings disputed the fee note submitted by the medical expert, to the extent that he charged VAT, calculated at the rate of 20%. The expert's fees, whose justification and amount net of tax were not disputed, have in the meantime been paid without the VAT.

13The Gebührenanspruchsgesetz (Austrian law on professional fees) provides that an expert is entitled to payment of VAT on his fees if and to the extent that his services are subject to VAT. Jurisdiction to fix the fees lies with the Landesgericht Innsbruck, which has stated that it will give a written decision concerning the liability to VAT of the services at issue in the main proceedings. An appeal lies against its decision in that regard.

14It is in that context that the Landesgericht Innsbruck asks whether the services provided by medical experts are exempt from VAT. It considers that it cannot determine with certainty whether medical examinations intended to establish or to exclude disability or unfitness for work constitute 'turnover from activity as a doctor' within the meaning of Paragraph 6(1)(19) of the UStG 1994. In addition, it points out that that provision transposes into Austrian law Article 13A(1)(c) of the Sixth Directive and must, therefore, be interpreted consistently with that directive.

15The Landesgericht Innsbruck therefore decided to stay the proceedings and to refer the following questions to the Court for a preliminary ruling:

'1. Is Article 13A(1)(c) of the Sixth Directive to be interpreted as meaning that the exemption from value added tax provided for therein does not apply to turnover from the activity of a doctor which consists in determining the disability, or lack of it, of a person applying for a pension?

2. Is the judgment [in D. v W., cited above] to be interpreted as meaning that medical examinations and expert opinions based on them for the purpose of establishing or excluding disability or unfitness to work do not fall within the scope of application of the provision referred to in Question 1 above, whether or not the doctor who acts as an expert is instructed by a court or a pension insurance institution?'

The questions referred

16By its two questions, which it is convenient to examine together, the referring court is asking, in essence, taking account particularly of D. v W., whether Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that the exemption from VAT under that provision applies to the services of a doctor consisting of making an expert report on a person's state of health in order to support or exclude a claim for payment of a disability pension and whether the fact that the medical expert was instructed by a court or by a pension insurance institution is relevant in that regard.

Observations submitted to the Court

17The Austrian Government and the Commission submit that the question whether the activities as an expert of a doctor which consist in establishing the disability or lack of it of a pension claimant are subject to VAT has been answered clearly enough and in the affirmative by the judgment in D. v W. It follows from paragraph 19 of that judgment that the exemption in Article 13A(1)(c) of the Sixth Directive applies only to medical services having a therapeutic aim.

18Starting from the interpretation given in D. v W. and basing itself in particular on the principle of strict construction of the provisions relating to VAT exemption, the Austrian Government concludes that the service at issue in the main proceedings, which is effected for the purposes of entitlement to a disability pension, is not exempt from VAT.

19The Commission observes that, in D. v W., the Court clearly indicated the medical activities which do not match the concept of 'provision of medical care' within the meaning of Article 13A(l)(c) by drawing a distinction according to whether or not the medical service pursues a therapeutic aim. The principles set forth in that judgment were confirmed in Case C-76/99 Commission v France [2001] ECR I-249, paragraph 24, and, more recently, in Case C-141/00 Kügler [2002] ECR I-6833, paragraphs 38 and 39.

20Not all the activities performed by a doctor are exempt from VAT by virtue of that provision. The terms used to specify the exemptions envisaged by Article 13 of the Sixth Directive are to be interpreted strictly, since those exemptions constitute exceptions to the general principle that VAT is levied on all services supplied for a consideration by a taxable person. The provisions of Article 13A(1), which is intended to exempt certain activities which are in the public interest, applies only to the activities which are listed and described in great detail (Case 348/87 Stichting Uitvoering Financiële Acties [1989] ECR 1737, paragraphs 12 and 13, and Case C-149/97 Institute of the Motor Industry [1998] ECR I-7053, paragraphs 17 and 18).

21According to the Commission services consisting of establishing, for the purposes of legal proceedings, whether an applicant for a pension is disabled have no therapeutic aim. Their purpose is to resolve a legal question. Accordingly, such services by a medical expert must be treated, for VAT purposes, in exactly the same way as the activity of expert witnesses in other disciplines, such as auditors or engineers.

22The Commission submits that the fact that the doctor acting as an expert was appointed by a court is irrelevant to the liability of the service to VAT. The purpose of the service is alone material.

23The United Kingdom Government maintains, for its part, that the facts of the main proceedings differ from those of the case which gave rise to the judgment in D. v W. In that case, the doctor's role as a court-appointed expert consisted in carrying out a genetic investigation in order to establish biological affinity between persons, an activity which is unrelated to their health. By contrast, in this case, the doctor was appointed by the referring court to carry out a medical examination and to determine Ms Unterpertinger's state of health, which amounts to a medical diagnosis. The United Kingdom Government submits that such activities are central to the medical profession and that they therefore come fully within the scope of the exemption under Article 13A(1)(c). Paragraph 18 of the judgment in D. v W. confirms that medical diagnosis falls squarely within that exemption.

24The United Kingdom Government submits that the questions referred by the Landesgericht Innsbruck seek to determine whether the liability to VAT of a medical examination and diagnosis depends either on the purpose for which those services were sought — in this case, in order to establish eligibility for the grant of a disability pension — or on the person who required them — in the main proceedings, a court. It argues that neither of the two criteria can justify treating such services differently.

25It is clear from the wording of Article 13A(1)(c) that, in drafting that provision, the Community legislature took account of the fact that the activities performed in the exercise of the medical professions are very varied and go beyond the simple treatment of sick patients. It did not define the exemption by reference to a narrow concept of medical treatment, but, as the Court noted in D .v W., referred more generally to medical services relating to human health.

26In paragraphs 21 and 23 of the judgment in Commission v France, cited above, the Court recalled its case-law according to which, while the exemptions from VAT are to be strictly construed, they should not therefore be interpreted unduly narrowly. In addition, the objective of ensuring that the benefit of medical care does not become inaccessible because of its increased cost resulting from the imposition of VAT — an objective highlighted by the Court in that judgment in respect of the exemption under Article 13A(1)(b) — also underlies the exemption under subparagraph (c).

27In support of its argument that the exemption under Article 13A(1)(c) does not apply only to medical treatment in the strict sense, but to all the tasks undertaken by doctors, the United Kingdom Government relies also on the description of those tasks which appears in Council Directive 93/16/EEC of 5 April 1993 to facilitate the free movement of doctors and the mutual recognition of their diplomas, certificates and other evidence of formal qualifications (OJ 1993 L 165, p. 1). In Case C-349/96 CPP [1999] ECR I-973, paragraph 18, the Court stated that the terms used in the Sixth Directive can be construed by taking into account their meaning in other Community directives. The Government maintains that there is no reason to consider that the concept of 'prestations de soins à la personne' used in Article 13A(1)(c) and rendered by the expression 'medical care' in the English version of that directive has a narrower meaning than the description of the tasks of doctors which appears in Directive 93/16.

28The United Kingdom Government submits that the wording used by the Court in D. v W. may exclude many services provided by doctors on a daily basis. Having regard to that wording, it claims that doubts can be raised as to the tax treatment of activities involved in, for example, preventive medicine, various forms of medical intervention connected to family planning and obstetrics, and cosmetic surgery. All such activities constitute supplies of medical care within the meaning of the Sixth Directive, even where they do not involve the treatment of illness. It is hardly likely that the Court wished to exclude from the VAT exemption activities such as vaccination performed by doctors or by members of the paramedical professions or the functions consisting of giving advice on the prevention of illness and on the protection of health, to which reference is made in the preamble to Directive No 93/16.

29The United Kingdom Government contends, therefore, that the activity consisting of examining a patient and diagnosing his state of health falls normally within the meaning of 'medical care' in Article 13A(1)(c). Referring more precisely to the question referred by the national court, it submits that the tax treatment of a medical diagnosis should not depend on the findings of the diagnosis or on the reasons for which that service was requested.

30Likewise, the tax treatment cannot reasonably depend on whether the motives of the patient, when he asked to be examined, were to reassure himself about his state of health or to provide the information to a third party, such as a potential employer. Such a distinction could easily be circumvented. In addition, a person in poor health or suffering from a disability ought not to be deterred, because of the imposition of VAT, from claiming an entitlement connected to his state of health, for example the right to a disability pension. It matters little in that regard whether the doctor's fees are paid directly by the patient or by a social security agency.

31The United Kingdom Government observes that in D. v W. the Court did not decide the question whether the identity of the person requesting a medical service is relevant to the tax treatment of that service. The Court held that the service in question in that case could not, because of its intrinsic nature, be exempt from VAT.

32The United Kingdom Government maintains that when a disabled person himself consults a doctor to seek his advice on whether his state of health makes him eligible for a social security benefit or to seek a certificate of disability in support of his claim, the service provided by the doctor is covered by the exemption under Article 13A(l)(c). There is no reason for making such services subject to VAT when they are sought by a person other than the patient, for example a social security agency calling upon its own doctor or a court deciding an action. The activity carried out by the doctor is the same in both cases and ought to be treated in the same way with regard to VAT.

33The United Kingdom Government claims that the wording of Article 13A(l)(c) contains no condition relating to the identity of the recipient of the services and that, where the Community legislature intended to specify the identity of the supplier or of the recipient, it has done so expressly. In the past, the Court has held that conditions which are not expressly laid down in the exemption concerned are not to be applied to the exemptions under Article 13 of the Sixth Directive (Case C-281/91 Muys' en De Winter's Bouw- en Aannemingsbedrijf [1993] ECR I-5405, paragraph 13, and Case C-2/95 SDC [1997] ECR I-3017, paragraph 38). It observes, also, that the intrinsic nature of a service does not change depending on the person who requests it.

The Court's reply

34According 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 services supplied for consideration by a taxable person (see, in particular, SDC, cited above, paragraph 20, and Kugler, cited above, paragraph 28). Those exemptions constitute independent concepts of Community law whose purpose is to avoid divergences in the application of the VAT system from one Member State to another (CPP, cited above, paragraph 15, and Commission v France, paragraph 21).

35As the Commission has correctly observed, Article 13A(1)(c) does not exempt all the services which may be effected in the exercise of the medical and paramedical professions, but only 'provision of medical care', which constitutes an independent concept of Community law. It follows that services effected in the exercise of those professions remain subject to the general rule making them subject to VAT set out in Article 2(1) of the Sixth Directive, if they do not correspond to the concept of 'the provision of medical care', or to the terms of any other exemption provided for by that directive.

36Even if other services provided by doctors may share the characteristics of activities in the public interest, it follows from the Court's case-law that Article 13A of the Sixth Directive does not exempt from VAT every activity performed in the public interest, but only those which are listed and described in great detail (Institute of the Motor Industry, cited above, paragraph 18, and D. v W., paragraph 20).

37The United Kingdom Government's argument seeking to extend the scope of the exemption under Article 13A(1)(c) to all the activities normally included in the functions of doctors and to which Directive 93/16 refers must therefore be rejected. The objectives pursued by that directive, which is intended to facilitate the free movement of doctors and the mutual recognition of their diplomas, certificates and other evidence of formal qualifications, require that the activities of doctors be therein described in such a way as to cover all of their activities in the various Member States, whereas the definition of the activities covered by that exemption, which creates an exception to the principle of subjection to VAT, fulfils different objectives.

38It should be noted, furthermore, that the fact that the same persons may provide both services exempted from VAT and services subject to that tax does not constitute an anomaly in the context of the system of deduction put in place by the Sixth Directive, since Articles 17(5) and 19 thereof specifically govern that situation.

39In relation to the concept of 'provision of medical care', the Court has already held in paragraph 18 of its judgment in D. v W., and restated in paragraph 38 of its judgment in Kugler, that that concept 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.

40While it follows from that case-law that the 'provision of medical care' must have a therapeutic aim, it does not necessarily follow therefrom that the therapeutic purpose of a service must be confined within an especially narrow compass (see, to that effect, Commission v France, paragraph 23). Paragraph 40 of the judgment in Kugler shows that medical services effected for prophylactic purposes may benefit from the exemption under Article 13A(1)(c). 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 '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 (see Commission v France, paragraph 23, and Kügler, paragraph 29).

41On the other hand, medical services effected for a purpose other than that of protecting, including maintaining or restoring, human health may not, according to that same case-law, benefit from the exemption under Article 13A(1)(c) of the Sixth Directive. Having regard to their purpose, to make those services subject to VAT is not contrary to the objective of reducing the cost of health care and of making it more accessible to individuals.

42As the Advocate General correctly pointed out in paragraphs 66 to 68 of her Opinion, it is the purpose of a medical service which determines whether it should be exempt from VAT. Therefore, if the context in which a medical service is effected enables it to be established that its principal purpose is not the protection, including the maintenance or restoration, of health but rather the provision of advice required prior to taking a decision with legal consequences, the exemption under Article 13A(1)(c) does not apply to the service.

43Where a service consists of making an expert medical report, it is clear that, although the performance of that service solicits the medical skills of the provider and may involve activities which are typical of the medical profession, such as the physical examination of the patient or the analysis of his medical history, the principal purpose of such a service is not the protection, including the maintenance or restoration, of the health of the person to whom the report relates. Such a service, whose purpose is to provide a reply to questions set out in the request for the report, is effected in order to enable a third party to take a decision which has legal consequences for the person concerned or other persons. While it is true that an expert medical report may also be requested by the person concerned and may indirectly contribute to the protection of the health of such person, by detecting a new problem or by correcting a previous diagnosis, the principal purpose pursued by every service of that type remains that of fulfilling a legal or contractual condition in another's decision-making process. Such a service cannot benefit from the exemption under Article 13A(1)(c).

44It does not matter, in that regard, that the medical report is made for the purposes of court action seeking the grant of a disability pension, that the medical expert has been instructed by a court or by a pension insurance agency or that, under national law, the costs of the expert are to be paid by that agency. Even if the circumstances demonstrate that the expert's activity in question is in the public interest, the terms of Article 13A(1)(c) do not permit application of the exemption to medical services whose purpose is not the protection of human health.

45Accordingly, the answer to the questions referred must be that Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that the exemption from VAT under that provision does not apply to the services of a doctor consisting of making an expert report on a person's state of health in order to support or exclude a claim for payment of a disability pension. The fact that the medical expert was instructed by a court or pension insurance institution is irrelevant in that respect.

Costs

Costs

46The costs incurred by the Austrian Government, the United Kingdom Government and the Commission, which have submitted observations to the Court, are not recoverable. Since these proceedings are, for the parties to the main action, a step in the proceedings pending before the national court, the decision on costs is a matter for that court.

Operative part

On those grounds,

THE COURT (Fifth Chamber),

in answer to the questions referred to it by the Landesgericht Innsbruck by order of 9 May 2001, hereby rules:

Article 13A(1)(c) 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, is to be interpreted as meaning that the exemption from value added tax under that provision does not apply to the services of a doctor consisting of making an expert report on a person's state of health in order to support or exclude a claim for payment of a disability pension. The fact that the medical expert was instructed by a court or pension insurance institution is irrelevant in that respect.

Rosas Edward La Pergola

Delivered in open court in Luxembourg on 20 November 2003.

R. Grass

V. Skouris

Registrar President

OPINION OF ADVOCATE GENERAL STIX-HACKL delivered on 30 January 2003

I — Introduction

1All the questions which the Landesger icht Innsbruck and the VAT and Duties Tribunal, London Tribunal Centre, have referred to the Court of Justice for a preliminary ruling in these cases, and to which this joined Opinion relates, concern the scope of the exemption in respect of 'the provision of medical care' under Article 13A(1)(c) 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 (hereinafter 'the Sixth Directive').

2The particular situation in Case C-212/01 involves the assessment by a doctor, acting as an expert instructed by a court or pension insurance institution, of the disability or ability of an applicant for a pension. Case C-307/01 concerns a range of medical activities, some carried out at the request of employers or insurers, and some involving the preparation of medical certificates or reports designed to establish medical fitness or whether the conditions for particular legal claims are satisfied.

3Both cases raise questions relating, in particular, to the scope of the judgment in the case of D., in which the Court decided that the establishment of genetic affinity through biological tests does not fall within the scope of Article 13A(1)(c) of the Sixth Directive.

II — Legal background

A — Community law

4Article 13A(1) of the Sixth Directive exempts certain 'activities in the public interest' from VAT.

5Article 13A(1)(c) of the Sixth Directive provides as follows:

'(1) Without prejudice to other Community provisions, 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:

(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned.'

B — National law

1. Case C-212/01

6Tax exemptions in respect of the medical professions are governed by Paragraph 6(1) of the Umsatzsteuergesetz (Law on Turnover Tax, or UstG) in Austria. That provision reads as follows in material part:

'Of turnover falling within Paragraph 1(1)(1), the following are exempt from tax:

19. Turnover from activity as a doctor, dentist, psychotherapist, midwife or self-employed supplier within the meaning of Paragraph 52(4) of Federal Law BGBl. No 102/1961 in the edition published in BGBl. No 872/1992 and of Paragraph 7(3) of Federal Law BGBl. No 460/1992; services supplied by associations whose members belong to the aforesaid professions are, as regards their members, also exempt from tax, to the extent that such services are used directly for carrying out the transactions that are exempt from tax under this provision and to the extent that the associations charge to their members only the exact reimbursement of the respective share of the common expenses;...'

2. Case C-307/01

7Item 1(a) in Group 7 — 'Health and Welfare' — in Schedule 9 to the Value Added Tax Act 1994 describes as one of the supplies that is exempt from VAT under Section 31 of the Act the following:

'1. The supply of services by a person registered or enrolled in any of the following:

(a) the register of medical practitioners...;'

8In addition, note (2) states as follows in relation to that provision:

'(2) Paragraph... (a)... of item 1 include[s] supplies of services made by a person who is not registered or enrolled in any of the registers... specified in [that paragraph] where the services are wholly performed or directly supervised by a person who is so registered or enrolled.'

Ill — Facts, procedure and questions referred for a preliminary ruling

A — Case C-212/01

9The background to the questions referred in Case C-212/01 is an action before the Landesgericht Innsbruck as employment and social security court in which, owing to the death of the plaintiff, Ms Margarete Unterpertinger, in the course of the proceedings, the only question which remains to be determined is that of costs.

10The original subject-matter of the dispute was a claim b r o u g ht by Ms Unterpertinger against a notice from the Pensionsversicherungsanstalt der Arbeiter (Workers' Pension Insurance Institution, hereinafter 'the defendant'). The Landesgericht Innsbruck as employment and social security court was called upon to determine whether the defendant should award the plaintiff a disability pension in the statutory amount from 1 August 1999.

11The defendant claimed before the court that there was a range of occupations on the general employment market that the plaintiff could still perform. The plaintiff, on the other hand, submitted that she was disabled within the meaning of the law.

12In order to assess the conflicting allegations made in the proceedings, the national court, on 3 April 2000, ordered various expert medical reports to be obtained.

13After those reports had been obtained, the plaintiff died suddenly, and the national court accordingly held that the proceedings had been cut short.

14The only point still at issue was the costs of the proceedings. The defendant and the expert continued to be parties to the proceedings in regard to the outstanding matters.

15The latter, an expert instructed by the Landesgericht Innsbruck as employment and social security court, and a specialist in psychiatry and neurology, invoiced VAT for the services supplied by him as an expert.

16At the hearing for presenting oral argument, the defendant, which is in any event required to bear the costs incurred on instructing expert witnesses, pursuant to Paragraph 77 of the Austrian Arbeits- und Sozialgerichtsgesetz (Law on Employment and Social Security Courts), raised fee objections against the expert's fee note, in so far as it included VAT at 20%. With the exception of that sum, all the fee rates were accepted as to both basis and amount. The expert's fees were paid out without VAT in the first instance.

17The Court notified the parties that it would give a written decision in respect of the 20% VAT. That is the context in which the present request for a preliminary ruling has been made.

18Under the Austrian Gebühren anspruchsgesetz (Law on Entitlement to Fees), an expert is entitled to recover turnover tax on his fee if, and to the extent that, his services are subject to turnover tax.

19By its question the national court is therefore asking whether or not the medical services supplied by the medical witness are exempt from turnover tax.

20In the view of the national court, it is not absolutely clear from the wording of Paragraph 6(1)(19) of the Umsatzsteuergesetz whether medical examinations whose purpose is to establish invalidity, incapacity to work or disability are covered by the exemption, or are excluded. The court points out that, despite differences in wording, the provision represents the transposition into Austrian law of Article 13A(1)(c) of the Sixth Directive, and must therefore be interpreted in conformity with the Directive.

21Accordingly, the Landesgericht Innsbruck as employment and social security court has, by an order of 9 May 2001, referred the following questions to the Court of Justice for a preliminary ruling under Article 234 EC:

'1. Is Article 13A(1)(c) of the 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, to be interpreted as meaning that the exemption from value added tax provided for therein does not apply to turnover from the activity of a doctor which consists in determining the disability or ability of a person applying for a pension?

2. Is the judgment of the Court of Justice of the European Communities in Case C-384/98 D v W to be interpreted as meaning that medical examinations and expert opinions based on them for the purpose of establishing or excluding disability, incapacity to work or invalidity do not fall within the scope of application of the provision referred to in Question 1 above, whether or not the doctor who acts as an expert is instructed by a court or a pension insurance institution?'

B — Case C-307/01

22Dr d'Ambrumenil is a medical practitioner. He initially worked in that capacity in the National Health Service, and then treated patients at his private practice until 1997. He also acted extensively as an expert medical witness before courts and tribunals and as a mediator and arbitrator.

23In 1994 Dr d'Ambrumenil formed a limited company, Dispute Resolution Services Limited (hereinafter 'DRS'), which now carries on substantially all of his business activities, with the exception of minor activities that do not relate to medical or legal work.

24These business activities involve providing a number of different types of service, such as conducting medical examinations and tests and issuing medical certificates.

25By a letter of 29 September 1997, Dr d'Ambrumenil was informed of a decision by the Commissioners of Customs and Excise finding that some of the services provided by him and/or DRS fell within Item 1(a) of Group 7 in Schedule 9 to the Value Added Tax Act and were therefore exempt from VAT.

26The purpose of the main proceedings is to adjudicate on an appeal brought by Dr d'Ambrumenil and DRS against that decision. The matter at issue is how certain services are properly to be treated for VAT purposes. Whilst Dr d'Ambrumenil and DRS consider that the services in question constitute taxable supplies, the Commissioners of Customs and Excise — the respondents in the main proceedings — are of the view that the services are exempt under the provisions of the Value Added Tax Act that transposed Article 13A(1)(c) of the Sixth Directive.

27It has been possible to resolve the dispute by agreement of the parties or court decision with regard to some of the services. But the national tribunal is unsure of the correct interpretation of Article 13A(l)(c) of the Sixth Directive in connection with the remainder of the medical activities. It describes these activities in the order for reference as follows:

— Conducting medical examinations of individuals for employers. This involves a physical and/or mental examination of a prospective employee carried out for the prospective employer and may involve completing a standard questionnaire. It does not involve the provision of medical treatment or advice to the prospective employee as to his medical condition. On certain occasions the prospective employee will be a current or former patient of Dr d'Ambrumenil to whom he has provided medical treatment or advice in the past; on other occasions the individual will be neither a current nor a former patient of Dr d'Ambrumenil.

— Conducting medical examinations of individuals for insurers. This activity involves a physical and/or mental examination of the prospective insured for the purposes of permanent health insurance or life assurance, and may involve completing a standard questionnaire. It does not involve the provision of medical treatment or advice to the prospective insured as to his medical condition. On certain occasions the individual will be a current or former patient of Dr d'Ambrumenil to whom he has provided medical treatment or advice in the past; on other occasions the individual will be neither a current nor a former patient.

— Testing for other purposes. The taking of blood or other bodily samples to test for the presence of viruses, infections, vidual has symptoms resulting from injuries sustained while on military service. It normally involves a physical examination of the individual, who may or may not be a patient of Dr d'Ambrumenil, but does not involve treatment of the symptoms.

or other diseases, including, in particu — Medical reports regarding personal lar, the HIV virus. This activity is conducted on behalf of, and for the benefit of, employers or insurers and may or may not be in respect of current or former patients of Dr d'Ambrumenil.

— Medical certificates. Certification of medical fitness, for example as to fitness to travel, at the request of the individual who may or may not be a current or former patient of Dr d'Ambrumenil. It involves the use of Dr d'Ambrumenil's medical skills and may involve a physical or mental examination.

injuries. The preparation of expert medical reports regarding issues of liability and the quantification of damages for individuals contemplating litigation before courts and tribunals. It involves the use of Dr d'Ambrumenil's medical skills to evaluate the cause, extent and prognosis of the injury and may involve examination of the prospective plaintiff. It does not involve treatment of the prospective plaintiff's condition.

— Medical reports regarding medical neg — Certificates as to a person's health for other purposes, such as war pensions. This involves, for example, certifying, for the purpose of establishing entitlement to a war pension, that an indi ligence. The preparation of expert medical reports for individuals contemplating litigation regarding professional medical negligence. It involves the use of medical skills as to the cause, extent and prognosis of the injury, liability and the quantification of damages, and may but does not normally involve examination of the individual. It does not involve treatment of the individual's medical condition.

28The national tribunal also observes in the order for reference that the judgment of the Court of Justice in the case of D. makes it clear that the involvement of a doctor for the purpose of investigating and providing an opinion in relation to a question of paternity is not covered by the exemption, but that, unlike the activities at issue in the viruses, infections or other diseases on behalf of employers or insurers, (c) certification of medical fitness, for present case, that is a procedure that has nothing to do with the health of any person.

example, as to fitness to travel, (d) giving certificates as to a person's

29By a decision of 6 June 2001 the VAT and Duties Tribunal, London Tribunal Centre, accordingly referred the following question to the Court of Justice for a preliminary ruling:

medical condition for purposes such as entitlement to a War Pension, (e) medical examinations conducted with '1. Is Article 13A(l)(c) of Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes to be interpreted as covering the following activities when performed in the exercise of the medical profession as defined by the a view to the preparation of expert Medical Reports regarding issues of liability and the quantification of damages for individuals contemplating personal injury litigation, Member State: (f) the preparation of Medical Reports (a) conducting medical examinations of individuals for employers or insurance companies,

(b) the taking of blood or other bodily samples to test for the presence of (i) following the examinations referred to in (e) and

(ii) based on medical notes but without conducting a medical examination, (g) medical examinations conducted with a view to the preparation of expert Medical Reports regarding professional medical negligence for individuals contemplating litigation, and

(h) the preparation of Medical Reports

(i) following the examinations referred to in (g) and

(ii) based on medical notes but without conducting a medical examination?'

IV — Arguments of the parties

A — Case C-212/01

30The Austrian Government, like the Commission, did not submit observations on the second question referred separately but answered both questions together.

31In the view of the Austrian Government, the question whether or not the activities of an expert in proceedings before a social security court are subject to turnover tax has been sufficiently clarified by the judgment in the D. case. 4 In that decision, the Court of Justice declared that a medical service which consisted 'not in providing care to persons by diagnosing and treating a disease or any other health disorder' was subject to turnover tax. If, as the judgment suggests, the exemption in Article 13A(1)(c) of the Sixth Directive only applies to medical services having a therapeutic aim, then the expert services of a doctor whose involvement is confined to establishing the disability or ability of an applicant for a pension for the purpose of the award of a disability pension must also be assumed not to be exempt. That conclusion is supported, inter alia, by the principle that provisions that contain exemptions from turnover tax are to be interpreted strictly.

32The Commission's arguments accord for the most part with those of the Austrian Government. The Commission submits that, contrary to the position under Paragraph 4(1)(19) of the Austrian Umsatzsteuergesetz, under Article 13A(1)(c) of the Sixth Directive, not all activities carried on by a doctor are exempt. The Commission disagrees with the United Kingdom's view that the notion of a doctor's function in Council Directive 93/16/EEC to facilitate the free movement of doctors and the mutual recognition of their diplomas, certificates and other evidence of formal qualifications 5 can be transposed to this case. That directive has a different purpose from the Sixth Directive, and it does not comprehensively define a doctor's function. In the judgment in the case of D., 6 the Court clearly stated which medical activities do not fall within the scope of 'the provision of medical care'. The Court confirmed that jurisprudence, which differentiates according to what the aim of the medical intervention is, in its judgment of 11 January 2001 in the case of Commission v France. 7 None the less, the therapeutic aim, which is the determining factor under that case-law, is to be understood widely; check-ups and prevention are included. In general, the question does not turn on the nature of the activity or of the individual medical procedure, but on the purpose of the doctor's intervention.

33In the Commission's view, however, establishing whether an applicant for a pension is disabled for the purpose of court proceedings does not have a therapeutic aim, as the sole purpose is to resolve a question of law. Accordingly, this exercise must, for turnover tax purposes, be treated in the same way as the activity of expert witnesses from other disciplines such as, say, accountants or engineers, and it is t h e r e f o re not e x e m pt u n d er Article 13A(1)(c). The fact that the expert was appointed to give an opinion by the court is thus irrelevant. The purpose of the medical intervention alone is material.

34As to the question, which came up especially at the hearing, of the practicability of deducting VAT when not all medical services are exempt, the Commission submitted that the difficulties this poses are no greater than those that arise in other cases where goods and services are used for both taxable and exempt transactions. The amount of VAT that is deductible is calculated not by reference to the individual item used, but as a proportion of the whole of the taxable person's turnover.

35The United Kingdom submits that the activities at issue in this case, namely carrying out a medical examination and then determining a person's state of health, — in effect, therefore, in its submission, making a medical diagnosis —, are central functions of the medical profession and therefore fall within the scope of the exemption in Article 13A(1)(c) of the Sixth Directive.

36The United Kingdom contends that it follows both from the wording of the exemption, and from a comparison with Directive 93/16, 8 which is applicable to this extent, that the function of the medical profession goes beyond simply providing medical treatment stricto sensu. For example, the activity of the medical profession includes prophylactic medicine, such as vaccinations, treatment in the areas of family planning and obstetrics, and cosmetic surgery. That is why, in the case of pathology, both the taking and the analysis of medical samples were, in Case C-76/99 Commission v France, 9 found to be exempt under Article 13A(1)(b). The Court further rejected an especially narrow interpretation of the exemption in that case, referring to its purpose, which is to ensure that access to hospital treatment and medical care is not hindered by increased costs. Similarly, the activity of examining and giving an opinion on a person's state of health — for instance, in the context of periodic health checks — must fall within the exemption, regardless of whether the examination leads to the administering of medical treatment in the stricter sense.

37The medical activity in point here is the making of a diagnosis. The issue raised by the questions referred for a preliminary ruling is whether the purpose for which the diagnosis and/or examination is carried out, or the person who instructed that it be carried out, affects the applicability of the exemption.

38As to the first question referred, the United Kingdom Government concludes that no sensible or workable distinction can be drawn in regard to the exemption on the basis of the purpose for which or reasons why a medical diagnosis is sought. The tax treatment of a service cannot depend on the results of the examination or the motives of the patient in seeking it. Such criteria could, in any event, be easily circumvented.

39As to the second question referred, the United Kingdom draws attention to the difference between this case and the situation in the case of D. Unlike the activities here, the establishing by an expert of paternity, which was at issue in that case, had nothing to do with health. The procedure at issue in this case, in contrast, is concerned with the diagnosis of diseases, which does fall within the exemption, according to the decision in D.

40Nor, in the United Kingdom's submission, can the identity of the person requesting the examination or diagnosis be the determining factor. A number of the exemptions in Article 13A and 13B of the Sixth Directive are dependent on the identity of the supplier or the recipient of goods or services. However, no condition relating to the identity of the recipient was introduced into Article 13A(1)(c). To imply such a condition into that provision would be tantamount to restricting the exemption in a way which is not supported by its wording. And once again, this provision could be easily circumvented.

B — Case C-307/01

41In view of the appellants in the main proceedings, it follows from the judgments of the Court of Justice in the cases of D. and Commission v United Kingdom that the activities described in the question referred for a preliminary ruling do not fall within the exemption in Article 13A(1)(c) and are therefore taxable. That is because that case-law, and the judgment in the case of Commission v France — though the latter is not otherwise relevant to this case — make it clear that 'the provision of medical care' within the meaning of that provision only encompasses activities having a therapeutic aim.

42They argue that the exemptions in Article 13 of the Sixth Directive are exceptions to the general principle that all services supplied by a taxable person for consideration are subject to VAT. As such the exemptions are, pursuant to the judgment in the case of Stichting Uitvoering, to be interpreted strictly. However this does not mean that they must be given the narrowest meaning possible, but that an exemption is to be understood as not extending beyond what falls within the natural meaning of the words.

43The wording of the exemption requires that two conditions be met. First of all, the service must be performed in the exercise of a medical or paramedical profession and, secondly, it must constitute medical care. There is no doubt that the first condition is met in this case because Dr d'Ambrumenil performs the services in the exercise of his medical profession. However, his services cannot be described as involving the provision of medical care. The words 'medical care' cannot encompass all activities carried out by a person in the exercise of the medical profession. If they did, then the second condition would be otiose and the Directive could simply have exempted 'services', as in Article 13A(1)(e).

44The words 'medical care' necessarily connote an activity designed to protect human health, and involving care of a patient. That interpretation is also consistent with the spirit and purpose of Article 13A of the Sixth Directive, which is to promote the protection of human health. That includes pure diagnosis and examination, if done for the purpose of ascertaining whether a person is suffering from a medical condition, with a view to treating it if possible. However, a diagnosis or examination alone does not constitute medical care — even where it is undertaken by a doctor — if it is carried out for some other purpose, such as to determine the premium payable on an insurance policy.

45Nor does the fact that not all medical activities are covered by the exemption give rise to any problems with regard to the deduction of VAT. Health professionals already carry out taxable transactions in the United Kingdom, such as the sale by dentists of toothbrushes, and there are appropriate methods for calculating the proportion of VAT that is deductible.

46The appellants in the main proceedings argue that none of the activities enumerated in the order for reference are performed for the purposes of protecting the health of any person or curing or treating any medical condition. They are not carried out for any therapeutic purpose and are no different in essence from paternity testing with which the case of D. was concerned, and should not therefore be exempt.

47The United Kingdom in its observations essentially repeats its arguments in Case C-212/01. It contends that, like the making of diagnoses and conducting of examinations, the activities described in the order for reference are central functions of the medical profession and therefore fall entirely within the scope of the exemption in Article 13A(1)(c) of the Sixth Directive. As in Case C-212/01, these activities involve the use of medical skill in order to give a medical opinion on a person's state of health, except that this case does not involve acting as an expert appointed by a court. However both cases raise the question whether either the purpose for which the diagnosis and/or the examination are carried out, or the identity of the person commissioning them, affects the applicability of the exemption. The United Kingdom says not. Nor is the confidential relationship between the patient and the person treating him, or the degree of confidence that exists, to which the Court referred in Case C-353/85, 5a n appropriate criterion, and it ought not to be so construed. Whether the examination is carried out by the patient's own doctor or another doctor cannot be material.

48The United Kingdom points to the fact that all the activities described in the order for reference involve the making of a medical diagnosis for the purpose of being communicated to a third party, with the diagnosis being commissioned by the third party in some cases. At any rate Dr D'Ambrumenil is in all cases providing medical care by using his medical knowledge to diagnose a patient's state of health. This can be distinguished from the act, exemplified by the case of D., of giving an opinion on a question of paternity, which has nothing to do with health.

49In its observations the Commission in some ways goes further than in Case C-212/01. Like the appellants in the main proceedings, it points out that doctors do not enjoy a general exemption from VAT, and that there are numerous activities undertaken in the exercise of the medical profession that do not fall within the scope of the exemption in Article 13A(1)(c); that much is clear from the wording of the provision alone. The scope of the exemption depends on what is meant by 'medical care'. In the case of D., the Court held on this point that the medical intervention must have a therapeutic aim, broadly construed, in other words, its aim must be the diagnosis, treatment and, so far as possible, the cure of diseases and health disorders. The Court reiterated its emphasis on this requirement in the case of Commission v France. Application of this test does not give rise to any special problems, at least no more than are raised by the interpretation of other tax exemptions. The Commission also affirms that it does not consider the identity of the person who commissions the medical procedure to be relevant.

50Like the United Kingdom, the Commission also points to the purpose of the exemption, which is to ensure that access to medical treatment is not made more difficult by increased costs, and agrees with the United Kingdom's view that the identity of the person who requests the medical examination is not material to the applicability of the exemption. Nor, however, is the use of medical knowledge and skill decisive, as the words 'medical care' imply something narrower, which is why Directive 93/16 is not of assistance in this context.

51As regards the individual activities at issue here, the Commission sees no reason to distinguish between the services described at points (e) to (h) of the order for reference. What is common to all these is the purpose of the examination, which is to determine the victim's physical condition and the origin and extent of the harm alleged to have been suffered, in order to assess any potential damages. Such an examination, at least where the expert is not the victim's own physician, does not have any therapeutic aim or direct connection with the medical treatment of that harm. The taxation of such services consequently has no impact on the ease of access to healthcare. The same may be said of points (c) and (d). Where a medical certificate is issued in the context of a routine consultation or ongoing medical care, the provision of the certificate may be regarded as merely ancillary to the main purpose of the service, which is the medical care of the person concerned. But the resolution of that question is a matter for the national tribunal.

52As regards examinations and tests carried out for employers and insurers, described in points (a) and (b) of the order for reference, in the Commission's view there is a distinction to be made according to the circumstances. If the examination is to establish suitability for future employment, or to determine whether a person is a suitable risk, particularly if it is carried out by a doctor chosen by the employer or insurer, it should be regarded as a taxable supply. The position may be different in relation to periodic medical examinations which are routinely required by employers or insurers. Such examinations may have a therapeutic aim, in that they encourage the persons concerned to discuss their state of health with the doctor and to obtain appropriate recommendations. Such examinations do involve a relationship of doctor and patient, unlike examinations requested solely for the purpose of determining aptitude for employment or assessing an insurance risk. These medical activities may therefore be deemed to be covered by the exemption. The same applies to the preparation of certificates and the carrying out of examinations in so far as they form part of the ongoing provision of medical care by a doctor to his patient. The other types of service set out in the order for reference are taxable supplies.

V — Appraisal

53As there is a significant degree of overlap between the questions raised in these two cases, I propose to begin by considering the scope of the exemption in Article 13A(1)(c) of the Sixth Directive in general, before looking in detail at the individual questions referred in each case. A — General observations on the scope of the exemption in Article 13A(1)(c) of the Sixth Directive

54I should like to start by considering the issue raised by the United Kingdom, concerning the extent to which, under the Sixth Directive, conclusions may be drawn from Directive 93/16 as to the scope of the exemption here.

55In the Card Protection Plan case, on which the United Kingdom relied, the Court found that there was 'no reason for the interpretation of the term "insurance" to differ according to whether it appears in the directive on insurance or in the Sixth Directive'. That merely signifies that terms which appear in more than one directive can sometimes have the same meaning. This is not to say, however, that, under the Sixth Directive, all medical activities potentially within the scope of Directive 93/16 are covered by the exemption, not least because the purpose of Directive 93/16, which is to facilitate the exercise of the right of establishment and the free movement of services for doctors, is different from that of the Sixth Directive.

56The object of Article 13A of the Sixth Directive is to exempt certain activities that are in the public interest from VAT, limited, however, to the activities which are specifically set out and described in detail therein. In addition it is settled case-law that the exemptions constitute independent concepts of Community law which must be placed in the general context of the common system of VAT introduced by the Directive and are to be interpreted strictly, since they constitute exceptions to the general principle that turnover tax is to be levied on all services supplied for consideration by a taxable person.

57The scope of the exemption for activities in the medical field in Article 13A(1)(c) of the Sixth Directive must therefore be determined in the light of a corresponding interpretation of that provision in the overall context of the general scheme for VAT, and no automatic inferences may be made on the basis of the scope of application of Directive 93/16.

58With regard, therefore, to the scope of the exemption, as the appellants in the main proceedings in Case C-307/01 correctly s t a t e d, the w o r d i ng of Article 13A(1)(c) of the Sixth Directive makes it clear that two conditions must be met. There must be provision of medical care, and it must be supplied by a person who possesses the necessary professional qualifications for a medical or paramedical profession. 0

59It is common ground that the services in question in both these cases were provided by a doctor. The question is therefore whether those services, by reason of their i n t r i n s ic n a t u r e, fall w i t h in Article 13A(1)(c). The point at issue, then, is the interpretation of the words 'provision of medical care'.

60In its judgment in the case of D., 1 the Court found that those words do not extend to establishing the genetic affinity of individuals. The orders for reference in both of the present cases stem from doubts as to whether that decision transfers to the medical services at issue here. What is uncertain is what particular factor causes the service of establishing paternity, as exemplified in the case of D., to fall outside the exemption in Article 13A(x1)(c).

61The United Kingdom, and the national 2 tribunal in Case C-307/01, 2 regard as critical the fact that, unlike the activities in this case, establishing paternity, as in the case of D., has nothing to do with the health of any person.

62That approach differentiates between a medical act whose object is purely to establish certain biological characteristics and one whose object is to ascertain a person's state of health.

63However the Commission rightly rejected such a distinction, based on the type of medical act, or the actual medical procedure carried out or treatment given. It is not, to my mind, possible to infer such a distinction from the decision in D., nor would it be practicable to do so.

64It is, for example, conceivable that the test which the Court found not to qualify as care in the case of D., or one like it, might be necessary in order to establish whether a person is suitable as an organ donor. If the United Kingdom's argument were to be accepted, then this test too would fall outside the exemption, even though it clearly forms part of, or is a prerequisite to, the provision of medical care. The same would be true, for instance, of ascertaining a person's blood group, which also involves determining a biological characteristic by scientific tests, and has no bearing per se on any person's state of health.

65Furthermore, in view of the complexity of the human organism and the corresponding multiplicity of methods of treatment which a doctor is necessarily called upon to administer in the exercise of his profession, it does not seem either very helpful or even possible to distinguish between various individual methods or medical procedures according to whether they are more or less central to or characteristic of the medical profession. There can be no question that establishing paternity, as in the case of D., requires specialist medical knowledge and therefore falls within the tasks of the medical profession. That is exactly the reason for engaging a doctor as an expert. The application of medical skill, or the 'central functions of the medical profession', on which the United Kingdom bases its argument, at least in part, cannot therefore be decisive.

66As regards the question whether a medical procedure is exempt from VAT, then, neither the nature of the medical intervention nor its centrality in terms of the functions of the medical profession is decisive; as the Court's case-law on the words 'provision of medical care' in Article 13A(1)(c) to date makes clear, the crucial issue is, rather, the aim of the medical intervention.

67In its decision in the case of D., the Court found, on the basis of a comparison of the various language versions of Article 13A(1)(c), that the term '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'. 3 Therefore services 'not having a therapeutic aim' must, in view of the principle that any provision establishing an exemption from VAT is to be interpreted strictly, be e x c l u d ed from the scope of Article 13A(1)(c) of the Sixth Directive. The Court of Justice has confirmed that case-law in its judgments in the cases of Commission v France and Kügler. 6

68It may therefore be concluded from the case-law that, when determining whether a medical procedure is to be exempted from VAT, it is the purpose of the procedure that is decisive. Not all activities carried out by a doctor are exempt — only those having a 'therapeutic aim'.

69In order correctly to determine the scope of the words 'the provision of medical care' in Article 13A(1)(c) of the Sixth Directive, it is also necessary to have regard to the rationale behind the exemption.

70The Court has stated with respect to Article 13A(1)(b) that 'the exemption of activities closely 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'. It is to be noted in that regard that subparagraph (c) of Article 13A(1) of the Sixth Directive is intended, in conjunction with subparagraph (b), to regulate comprehensively exemptions for services in the area of medical care. Article 13A(1)(b) covers services provided in hospitals, and subparagraph (c) covers medical care provided outside hospitals, both at the private address of the person providing the care and at the patient's home, or at any other place.

71Taken together, the two exemptions therefore serve to promote access to health care — whether in hospitals or otherwise — by keeping treatment costs down.

72It is apparent from both the purpose of the exemption, as just set out, and the case-law of the Court that, contrary to the United Kingdom's view, activities whose direct purpose is not to cure but is merely preventive do constitute activities with a 'therapeutic aim' which are to be regarded as involving the provision of medical care and thus exempt.

73Indeed it is precisely preventive medicine that helps to keep medical costs down, both on an individual level and in national economic terms. Preventive medical procedures must therefore be covered by the exemption in order to ensure consistency with its purpose, which is to facilitate access to medical treatment.

74Furthermore, the Court has stated explicitly that only medical care provided 'for the purpose of prevention, diagnosis or treatment' qualifies for exemption under Article 13A(1)(c).

75It may therefore be said in general that the classification of a medical procedure for the purposes of Article 13A(1)(c) depends on whether the procedure may be characterised as care provided with a view to 'prevention, diagnosis or treatment', and must be assessed in the light of the purpose of that provision, which is to exempt from tax such medical services as are supplied to protect or restore a person's health, and which ought therefore to be available to individuals at as low a cost as possible.

76It is clear from the foregoing that the Court excluded establishing the genetic affinity of individuals from the scope of Article 13A(1)(c) of the Sixth Directive in the case of D., not because the object of that test was to ascertain a person's bio logical characteristics rather than their state of health, but because the medical procedure in that case served a purpose that was other than therapeutic, namely the drawing up of an expert opinion.

77The activities described in the orders for reference in Cases C-212/01 and C-307/01 are therefore to be assessed with a view to determining whether their purpose or nature is to provide an opinion or service by an expert, or whether it is to provide medical treatment with a view to maintaining or restoring a person's health.

78It may not be easy in individual cases to distinguish medical care within the meaning of the exemption at issue here — which is to say medical procedures having a therapeutic aim — from other medical activities. However, firstly, the need for the distinction is clear from the wording of Article 13A(l)(c) of the Directive, which states that it is not activities undertaken by physicians in general that benefit from the exemption but 'the provision of medical care'; and, secondly, the problem of where to draw the line in relation to the conditions attaching to tax exemptions commonly do give rise to difficulties.

79Whether a supply by a doctor falls within the exemption or not is ultimately to be determined on the basis of the facts, or the factual context of the particular medical transaction.

80In so doing it is necessary to separate the factual aspects of the medical supply under consideration from the legal criteria UNTERPEERTNGER applicable to determine whether the conditions for the exemption to apply are met, such as in particular the requirement that there be a therapeutic aim within the meaning of the case-law.

81For example, one of the factual aspects of a medical procedure to which regard may be had in determining the purpose or nature of that procedure, but which does not constitute a legal condition for the exemption to apply per se, is the identity of the person who requests the medical procedure. Commissioning by a court, an insurer or an employer could suggest that a medical procedure is to be regarded as a service provided in an expert capacity and not a provision of medical care having a therapeutic aim, even if technically it is the same medical procedure that is involved.

82The United Kingdom and the Commission are correct to argue that the identity of the person who commissions or causes a medical examination to be carried out is not material to the exemption in Article 13A(1)(c) of the Sixth Directive — both on the wording of the provision and according to the case-law. But it is one of the factors that help to determine whether the procedure constitutes treatment having a therapeutic aim.

83The same is true of the relationship a patient has with the doctor treating him. Under the Directive it is not necessary, in order to come within the exemption in Article 13A(l)(c), that there be a particular degree of confidential relationship between doctor and patient, nor indeed would such a factual requirement be practicable. The finding by the Court of Justice in Case 353/85 that the provision of medical care for the purposes of Article 13A(1)(c) involves 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', rather describes medical care outside hospitals in general (Article 13A(1)(b) of the Sixth Directive). That finding is therefore not to be understood as constituting a prerequisite for there to be provision of medical care.

84Finally, this is an appropriate point at which to consider the premiss, on which the United Kingdom's submission is based, that the activities described in both these cases involve medical diagnosis in the widest sense, and that the exemption cannot depend on the person who requested the diagnosis, or the reason for making it.

85Very broadly, the Court's case-law says that in order to assess a transaction in the context of the Community VAT system, the nature of the transaction must be considered overall; artificial distinctions are to be avoided, and regard must be had to the perspective of the average consumer.

86If the medical supplies in this case are considered in their overall factual context, perhaps it is rash to describe them as involving diagnosis. As I have said, and as the Commission argued, the same medical procedure may be classified differently depending on the factual context in which it is performed, so that whether assessing a person's state of health is to be regarded as diagnosis or as giving an expert opinion depends on that context.

87Before I turn to the activities described in Cases C-212/01 and C-307/01 in the light of the foregoing, I should just like to observe that, like the Commission, I do not consider the issue of the deduction of VAT to raise any more serious problems as a result of various medical services being treated differently for tax purposes than are raised in other cases where goods or services are used for both taxable and non-taxable transactions. How to proceed in such circumstances is clear from Article 17(5) of the Sixth Directive, which states that the proportion of VAT that is deductible for such goods and services is to be determined by reference to all the transactions carried out by the taxable person.

B — Case C-212/01

88It should be observed at the outset that the second question referred in Case C-212/01 on the interpretation of the Court's judgment in the case of D. has no distinct meaning without the first question. I therefore propose to answer both questions together.

89By its two questions, the Landesgericht Innsbruck is asking whether medical findings and expert opinions based thereon made by a doctor appointed by a court or pension insurance institution for the purposes of determining whether an applicant for a pension does or does not suffer from disability, incapacity to work, or invalidity, fall within the scope of Article 13A(1)(c) of the Sixth Directive.

90The activity of the doctor in such a case consists in making an expert assessment of the degree of a person's disability, for the purposes of evaluating the basis of a claim for a disability pension in the context of court proceedings. The medical intervention has no therapeutic aim and it does not therefore fall within the exemption in Article 13A(1)(c).

C — Case C-307/01

1. Paragraphs (a) and (b) of the question referred for a preliminary ruling

91By paragraphs (a) and (b) of the question, the national tribunal is asking whether medical activities of examining persons and taking bodily samples for the purposes of testing for viruses, infections and other diseases, carried out for or on the instructions of employers or insurers, fall within the exemption in Article 13A(1)(c).

92It is not possible to give a catch-all response because, as I have said, the person who commissions or requests a medical examination is not per se relevant for the purposes of the exemption.

93The fact that a medical examination is carried out at the instigation, or on the instructions, of an employer or insurer does not automatically mean that it does not have a therapeutic aim, which is the critical condition for the exemption to apply. The example cited by the Commission of (periodic) medical examinations and tests to which employees frequently have to submit as a duty owed to their employer under employment law seems to me to be illustrative in this connection. Such routine examinations fulfil a therapeutic goal, in so far as their purpose is to maintain the employee's health or to prevent the onset of disease. Similarly, it is conceivable that an insurer might require certain preventive tests to be performed on its insureds. Such examinations, too, would fall to be classified as medical treatment with the aim of preventing, diagnosing and, where possible, curing, regardless of the identity of the person requesting them. The same would be true of medicals in schools of the type alluded to at the hearing. The purpose of such medicals is not to obtain an expert opinion, even though they are carried out on the instructions of the school and not the pupils who undergo the examination, but to protect and, if possible, restore those pupils' health.

94It must therefore be found that medical examinations and tests of the type described in paragraphs (a) and (b) of the question referred fall within the scope of the exemption in Article 13A(1)(c) only if they are carried out in the interests of the patient's health and not purely to obtain an expert opinion with a view to providing information to employers or insurers.

95The kinds of examination described in the order for reference, involving assessment for employers or insurers of the physical and/or mental health of a potential employee or insured person in order to determine his medical suitability for a particular post or the risk he represents for an insurance scheme, are examples of activities by experts which have no therapeutic aim.

2. Paragraphs (c) to (h) of the question referred

96By subparagraphs (c) to (h) of the question referred, the national tribunal is requesting guidance on how the preparation of various medical certificates and reports should be treated for tax purposes.

97In my view, the tribunal makes an erroneous distinction in the way it puts its question between certificates and reports on the one hand, and the examinations performed in order to produce them on the other. The latter may be regarded as merely ancillary since they do not serve any purpose in themselves for the person requesting them; they are simply the means employed to produce the certificate or report. Nor does it make any difference to the aim of the medical procedure — which is the crucial factor — whether the certificates or reports are issued on the basis of medical notes or examinations.

98What is, rather, critical for the purposes of Article 13A(1)(c) of the Sixth Directive is whether the services are supplied for the purposes of assessing medical fitness, such as for travel, or of establishing particular grounds for a claim, whether in connection with a war pension, or personal injury or medical negligence litigation. These are medical interventions (of an expert nature) whose purpose is other than therapeutic and they are therefore excluded from the scope of Article 13A(1)(c) of the Sixth Directive.

99It is true that certifying whether a person is medically fit may indeed have a 'prophylactic' function in the widest sense, in that the person examined may, for instance, refrain from undertaking a journey which his health could not withstand. Similarly, the award of a war pension or damages may also contribute to a person's health or its restoration in the broadest sense. But in the case of both these medical activities it is clearly the expert's opinion that is uppermost, any therapeutic implications being only very indirect, so that to my mind such medical services cannot be regarded as having any therapeutic aim.

VI — Conclusion

100In the light of all of the foregoing, I propose that the Court should reply to the questions referred for a preliminary ruling as follows.

A — Case C-212/01

Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that the exemption therein laid down does not cover activities undertaken by a doctor consisting in establishing as an expert appointed by a court or pension insurance institution whether an applicant for a pension is or is not suffering from disability, incapacity to work or invalidity, the purpose of which is the preparation of an expert opinion rather than therapeutic.

B — Case C-307/01

(1) Article 13A(1)(c) of the Sixth Directive is to be interpreted as meaning that

— conducting medical examinations of individuals, and — taking blood or other bodily samples to test for the presence of viruses, infections or other diseases,

for or on behalf of an employer or insurance company are not exempt from VAT if they do not have any therapeutic aim, such as the medical treatment of the individuals by means of prevention, diagnosis or treatment, but serve some other purpose, such as the compilation of health-related information by an expert for employers or insurance companies.

(2) The aim of medical activities such as

— certification of medical fitness such as, for example, fitness to travel,

— giving certificates as to a person's medical condition for purposes such as entitlement to a war pension, — preparing medical reports following medical examinations, including conducting such medical examinations, or on the basis of medical notes without any medical examination being carried out, in connection with issues of liability and the quantification of damages for individuals contemplating personal injury litigation, and

— preparing medical reports on the basis of medical notes or following medical examinations, including conducting such examinations, in connection with medical negligence for individuals contemplating litigation

is the obtaining of an expert opinion, rather than therapeutic. They do not therefore fall within the scope of Article 13A(1)(c) of the Sixth Directive and are thus not exempted from VAT.

Notes

(1) Original language: German.

(2) Judgment of 14 September 2000 in Case C-384/98 [2000] ECR I-6795.

(3) Hereinafter 'the appellants in the main proceedings'.

(4) Cited in footnote 2.

(5) Council Directive of 5 April 1993 (OJ 1993 L 165, p. 1), hereinafter 'Directive 93/16'.

(6) Cited in footnote 2.

(7) Judgment in Case C-76/99 Commission v France [2001] ECR I-249, paragraph 24.

(8) The United Kingdom bases its argument that Directive

(93) /16 may be transposed to this case on the decision in Case C-349/96 Card Protection Plan [1999] ECR I-973, paragraph 18.

(9) Cited in footnote 7.

(10) Judgment in D. (cited in footnote 2), paragraph 18.

(11) Cited in footnote 2.

(12) Judgment in Case 353/85 Commission v United Kingdom [1988] ECR 817.

(13) Cited in footnote 7, paragraph 24.

(14) Judgment in Case 348/87 Stichting Uitvoering [1989] ECR

(173) 7, paragraph 13.

(15) Judgment in Case C-353/85 (cited in footnote 12), paragraph 33.

(16) Judgment in case C-349/96 (cited in footnote 8), paragraph

(18) .

(17) Cf, inter alia, the judgments in Cases C-287/00 Commission v Germany [2002] ECR I-5811, paragraph 45, and C-149/97 Institute of the Motor Industry [1998] ECR I-7053, paragraph 18.

(18) Cf, for instance, Case C-2/95 SDC [1997] ECR I-3017, paragraph 21; Stichting Uitvoering (cited in footnote 14), paragraph 11; and Case 235/85 Commission v Netherlands [1987] ECR 1471, paragraph 18.

(19) Cf, inter alia, the judgments in the case of D. (cited in footnote 2), paragraph 15, SDC (cited in footnote 18), paragraph 20, and Stichting Uitvoering (cited in footnote

(14) , paragraph 13.

(20) Case C-141/00 Kügler [2002] ECR I-6833, paragraph 27.

(21) Cited in footnote 2.

(22) See point 28 above.

(23) Judgment in D. (cited in footnote 2), paragraph 18.

(24) Ibid., paragraph 19.

(25) Commission v France (cited in footnote 7), paragraph 24.

(26) Kügler (cited in footnote 20), paragraphs 38 and 39.

(27) Commission v France (cited in footnote 7), paragraph 23.

(28) See the judgment in Kügler (cited in footnote 20), paragraph 36. See also my Opinion in Case C-45/01 Christoph-Domier-Stiftung [2002) ECR I-12911, points 45 and 46.

(29) See the Opinion of Advocate General Saggio in D. (cited in footnote 2), point 16.

(30) See the judgment in Kügler (cited in footnote 20), paragraph 40.

(31) Cf the judgment in D. (cited in footnote 2), paragraph 22.

(32) Judgment cited in footnote 12, paragraph 33.

(33) See also my Opinion in Case C-45/01 of 10 December

(200) 2 (cited in footnote 28), points 45 and 46.

(34) Cf the judgment in Case C-349/96 (cited in footnote 8), paragraph 29.

(35) See also my Opinion in Case C-16/00 Cibo Participations [2001] ECR I-6663, point 6.

(36) Cf the judgment in the Card Protection Plan case (cited in footnote 8), paragraph 30.