C-335/14 Les Jardins de Jouvence

JUDGMENT OF THE COURT (Fifth Chamber)

21 January 2016 ( *1 )

‛Reference for a preliminary ruling — Taxation — Value Added Tax — Sixth VAT Directive — Exemptions — Article 13A(1)(g) — Exemption for the supply of services closely linked to welfare and social security work, provided by bodies governed by public law or by other organisations recognised as charitable — ‘Supply of services and of goods closely linked to welfare and social security work’ — Organisations recognised as charitable — Serviced residence’

In Case C‑335/14,

REQUEST for a preliminary ruling under Article 267 TFEU from the cour d’appel de Mons (Mons Court of Appeal, Belgium), made by decision of 18 June 2014, received at the Court on 11 July 2014, in the proceedings

Les Jardins de Jouvence SCRL

v

État belge,

intervening party:

AXA Belgium SA,

THE COURT (Fifth Chamber),

composed of T. von Danwitz, President of the Fourth Chamber, acting for the President of the Fifth Chamber, D. Šváby, A. Rosas, E. Juhász and C. Vajda (Rapporteur), Judges,

Advocate General: Y. Bot,

Registrar: V. Tourrès, Administrator,

having regard to the written procedure and further to the hearing on 3 June 2015,

after considering the observations submitted on behalf of:

Les Jardins de Jouvence SCRL, by L. Strepenne and G. Lardinois, avocats,

Axa Belgium SA, by P. Meessen and C. Goossens, avocats,

the Belgian Government, by M. Jacobs and C. Pochet, and by J.-C. Halleux, acting as Agents,

the European Commission, by F. Dintilhac and L. Lozano Palacios, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 9 July 2015,

gives the following

Judgment

Legal context and the dispute

1This request for a preliminary ruling concerns the interpretation of Article 13A(1)(g) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’).

2The request has been made in proceedings between Les Jardins de Jouvence SCRL (‘LJJ’) and État belge (‘the Belgian State’) concerning the refusal to allow that company to deduct input value added tax (‘VAT’) in the context of building work which it carried out for the purpose of operating a serviced residence.

Legal context

EU law

3The Sixth Directive was repealed and replaced, with effect from 1 January 2007, by Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1). However, given the date at which the material facts arose, the dispute in the main proceedings is still governed by the Sixth Directive.

4Article 13A of the Sixth Directive provided:

‘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:

...

the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other organisations recognised as charitable by the Member State concerned;

...

2. ...

The supply of services or goods shall not be granted exemption as provided for in (1) (b), (g), (h), (i), (l), (m) and (n) above if:

it is not essential to the transactions exempted,

...’

Belgian law

5Article 44(2) of the Value Added Tax Code (Moniteur belge of 27 July 1969, p. 7046), in the version in force up to 21 July 2005, provided:

‘The following shall also be exempt from VAT:

...

the supply of services or goods closely linked to social welfare, carried out by bodies whose task or business is to care for elderly persons and which are recognised as such by the competent authority and which, in the case of bodies governed by private law, operate under social conditions comparable with those that apply to public law bodies ...’

6The Programme Law of 11 July 2005 (Moniteur belge of 12 July 2005, p. 32180) amended the Value Added Tax Code as from 22 July 2005. Article 44(2) of that code, as amended (‘the amended VAT Code’), provides:

‘The following shall also be exempt from VAT:

...

the supply of services or goods closely linked to welfare, to social security work and to the protection of children and young people by bodies governed by public law, or by other bodies recognised by the competent authority as being devoted to social wellbeing.

These include, in particular:

bodies whose task or business is to take care of elderly people;

...’

7As set out in Article 2(1) of the Decree of the Walloon Regional Council of 5 June 1997 relating to retirement homes, serviced residences and day care centres for the elderly, and creating the Walloon council for the third age (décret du Conseil régional wallon du 5 juin 1997 relatif aux maisons de repos, résidences-services et aux centres d’accueil de jour pour personnes âgées et portant création du Conseil wallon du troisième âge) (Moniteur belge of 26 June 1997, p. 17043), in the version in force at the material time (‘the Decree of 5 June 1997’), a retirement home is an ‘establishment, however described, intended to accommodate persons aged 60 or over who have their habitual residence there and who benefit there from communal domestic, cleaning and daily living assistance services and, if necessary, the care of nurses or paramedics’.

8Article 2(2) of the Decree of 5 June 1997 defines the serviced residence as being ‘one or more buildings, however described, constituting a functional unit, managed by an organising body which, in return for payment, offers persons aged 60 or over individual accommodation enabling them to lead an independent life, together with services that they may call upon as desired’. That provision states that the Government is to define the notion of functional unit and that the premises, equipment and communal services of a serviced residence may also be accessible to other persons aged 60 or over.

9In accordance with the first paragraph of Article 5(1) of the Decree of 5 June 1997, the operation of a retirement home or a serviced residence is subject to obtaining an authorisation and, pursuant to Article 5(2) and (5) of that decree, those establishments must meet certain requirements.

10Thus, in accordance with Article 5(2) of the Decree of 5 June 1997, retirement homes must meet certain requirements concerning:

services covered by the prices for accommodation or entry;

...

6food, hygiene and healthcare,

...

9internal rules respecting the following principles:

...

free access to the retirement home for family, friends ...’

11It is apparent from the second paragraph of Article 5(5) of the Decree of 5 June 1997 that serviced residences must also satisfy the requirements defined by the Walloon Government concerning the matters cited in paragraph 10 of the present judgment.

12According to the first paragraph of Article 5(5) of the Decree of 5 June 1997, the individual dwellings which serviced residences make available to residents must include at least a sitting room, a kitchen area, a bedroom, a bathroom and private toilets. In addition, pursuant to point 4 of the second paragraph of Article 5(5) of that decree, serviced residences must also meet certain requirements concerning ‘the optional services which the manager is required to organise or make available at the request of residents and the conditions of access to them’ (‘the optional services required’), services whose ‘minimum content is defined by the [Walloon] Government’.

13It is apparent from section 2.2 of Chapter III of Annex III, entitled ‘Requirements applicable to serviced residences’, to the Order of the Walloon Government of 3 December 1998 implementing the Decree of 5 June 1997 (Moniteur belge of 27 January 1999, p. 2221 in the version in force at the material time in the main proceedings; ‘the Order of 3 December 1998’) that serviced residences must provide maintenance of the common areas, outside areas and equipment made available to residents, maintenance of the inside and outside windows, information on the leisure activities organised in the town as well as the visit of a representative of the organising body at least twice a year. In addition, pursuant to section 2.3 of the same chapter of Annex III to the Order of 3 December 1998, serviced residences must make available to residents the following optional services, to which residents can freely have recourse:

the option of having three meals per day, which must include a full hot meal, either in the common room of the serviced residence intended to be used for catering and activities or in the restaurant of the retirement home or the retirement and nursing home functionally linked to the serviced residence or in the resident’s private accommodation. A register is to set out, per day, the meals served to the residents, mentioning the name of the beneficiary and the information necessary for their invoicing;

the option of having the private dwelling cleaned at least once per week;

the option of having the resident’s personal laundry attended to.

14Moreover, it is apparent from the order of reference that the prices applied by serviced residences are set under the supervision of the Minister for Economic Affairs.

The dispute in the main proceedings and the questions referred for a preliminary ruling

15LJJ, formed in the course of 2004, is a cooperative company constituted under Belgian law whose object, at the material time, consisted in operating and managing care institutions and in engaging in all activities relating directly or indirectly to healthcare and the assistance of the sick, elderly, disabled or other persons.

16In October 2004, LJJ informed the Belgian tax authorities of the commencement of its business activity of renting out small flats designed for able-bodied persons. Those authorities then registered LJJ for VAT purposes.

17On 27 October 2006, LJJ received a provisional licence to operate the serviced residence ‘Les jardins de Jouvence’.

18That serviced residence makes available to its residents dwellings intended for one or two persons, comprising a fitted kitchen, a sitting room, a bedroom and a fitted bathroom. In addition, it provides them with various services for consideration, which are also offered to other persons, namely access to a bar restaurant, a hairdressing and beauty salon, a physiotherapy room, occupational therapy activities, a laundry, a pharmacy where blood can be collected and a doctor’s surgery.

19Between August 2004 and September 2006, LJJ carried out substantial building work and installed equipment corresponding to its business purposes, with a view to commencing the operation of a serviced residence.

20On 5 October and 14 November 2006, the tax authorities carried out an audit of LJJ’s accounts in order to check the way in which the VAT legislation had been applied for the period from 30 August 2004 to 30 September 2006. Following that audit, those authorities concluded that LJJ was not entitled to deduct the VAT in relation to the construction of immovable property during the period between 2004 and 2006, since that company was a taxable person whose transactions in connection with the operation of its serviced residence were exempt in their entirety from VAT pursuant to Article 44(2) of the amended VAT Code. Consequently, those authorities demanded that LJJ repay the amounts of tax wrongly deducted.

21On 25 January 2007, the tax authorities informed LJJ of the cancellation of its VAT current account, with effect from 30 September 2006.

22On 13 February 2007, a demand for payment was served on LJJ, which LJJ opposed, by an application, before the tribunal de première instance de Mons (Mons Court of First Instance) on 20 February 2007.

23By a judgment of 19 June 2012, that court dismissed LJJ’s application as unfounded, holding that bodies whose task or business is to care for elderly persons are exempt from VAT, in accordance with Article 44(2) of the amended VAT Code, and that there was no need to determine whether the services in question were linked in particular to welfare and to social security work and whether they were provided by public law bodies or by bodies recognised by the competent authority as being devoted to social wellbeing.

24On 19 December 2012, LJJ lodged an appeal against that judgment before the cour d’appel de Mons (Mons Court of Appeal).

25LJJ claimed before that court that the formal licence to operate a serviced residence did not necessarily entail recognition that it is devoted to social wellbeing, since the conditions for the approval of serviced residences are fundamentally different from those for the approval of retirement homes. That company also observed that a material intervention on the part of the State, region or municipality, which is a constituent element of the notion of social welfare or social security, was lacking in relation to serviced residences. In the present case, LJJ did not receive any public funding and its residents did not receive any public assistance or subsidy in order to cover the costs relating to the services provided.

26The Belgian State claimed before the cour d’appel de Mons (Mons Court of Appeal) that LJJ’s action should be dismissed, arguing that LJJ, which provided services covered by Article 44(2) of the amended VAT Code, was a taxable person exempt from VAT, which, consequently, did not have a right to deduct that tax. The Belgian State submitted that the serviced residence operated by LJJ, licensed by the Walloon Region, was formally recognised as being devoted to social wellbeing in order to provide services closely linked to welfare. Likewise, the services provided by LJJ, which are directly linked to the accommodation, care and treatment offered to residents with a view to improving their physical and/or mental wellbeing, are devoted to social wellbeing.

27Having doubts concerning the interpretation to be given to Article 13A(1)(g) of the Sixth Directive, the Cour d’appel de Mons (Mons Court of Appeal) decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

Is a serviced residence, within the meaning of the Decree of 5 June 1997, [which operates] with a view to profit individual dwellings designed for one or two persons, comprising a fitted kitchen, a sitting room, a bedroom and a fitted bathroom, thereby enabling residents to lead an independent life, together with a range of optional services supplied against payment, with a view to profit, those services not being available exclusively to the occupants of the serviced residences (a bar restaurant, a hairdressing and beauty salon, a physiotherapy room, occupational therapy activities, a laundry, a pharmacy and blood collection point and a doctor’s surgery), an essentially charitable organisation which supplies “services and goods closely linked to welfare and social security work” for the purposes of Article 13A(1)(g) of [the] Sixth Directive?

Is the answer to Question 1 different if the serviced residence in question receives, for the supply of the services in question, subsidies or any other form of advantage or funding from public authorities?’

Consideration of the questions referred

28By its questions, which it is appropriate to examine together, the referring court asks, in essence, whether Article 13A(1)(g) of the Sixth Directive must be interpreted as meaning that the services provided by a serviced residence, such as that at issue in the main proceedings, which does not receive any subsidy or any other form of advantage or financial support from public authorities, which are performed with a view to profit and consist of the making available to persons aged 60 or over of individual dwellings enabling them to lead independent lives and of the provision of optional services for consideration also accessible to non-residents, come under the exemption referred to in that provision.

29It is apparent from the wording of Article 13A(1)(g) of the Sixth Directive that that provision applies to the supply of services and to the supply of goods which are, first, ’supplied ... by bodies governed by public law or by other organisations recognised as charitable by the Member State concerned’ and, secondly, ‘closely linked to welfare and social security work’ (judgments in Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraph 34, and Zimmermann, C‑174/11, EU:C:2012:716, paragraph 21).

30Given that, in the present case, it is common ground that LJJ is not a body governed by public law within the meaning of Article 13A(1)(g) of the Sixth Directive, its transactions can be exempted from VAT under that provision only in so far as LJJ falls within the concept of ‘other organisations recognised as charitable by the Member State concerned’ within the meaning of that provision.

31It is therefore necessary to examine, first, whether LJJ falls within the concept of ‘other organisations recognised as charitable by the Member State concerned’ within the meaning of Article 13A(1)(g) of the Sixth Directive and, secondly, whether the services provided by a serviced residence, such as that at issue in the main proceedings, are ‘closely linked to welfare and social security work’ within the meaning of that provision.

The condition relating to the recognition as other charitable organisations by the Member State concerned

32It should be observed at the outset that Article 13A(1)(g) of the Sixth Directive does not specify the conditions or the procedures for recognising organisations other than those governed by public law as charitable. In consequence, it is in principle for the national law of each Member State to lay down the rules in accordance with which that recognition may be granted to such organisations (see judgment in Zimmermann, C‑174/11, EU:C:2012:716, paragraph 26 and the case-law cited).

33In that context, under Article 13A(2)(a) of the Sixth Directive, Member States may make the grant of the exemption provided for in Article 13A(1)(g) to bodies other than those governed by public law subject to one or more of the conditions listed in Article 13A(2)(a). Those optional conditions for the grant of that exemption may be imposed freely and additionally by Member States (see judgment in Zimmermann, C‑174/11, EU:C:2012:716, paragraph 27 and the case-law cited).

34It follows therefore that Article 13A(1)(g) of the Sixth Directive grants the Member States a discretion to recognise as charitable certain organisations not governed by public law (see, to that effect, judgment in Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraph 51 and the case-law cited).

35In that regard, it is clear from the case-law of the Court that, when considering whether to recognise as charitable organisations other than those governed by public law, it is for the national authorities, in accordance with EU law and subject to review by the national courts, to take various factors into account. They include the existence of specific provisions, be they national or regional, legislative or administrative, or tax or social security provisions; the public interest nature of the activities of the taxable person concerned; the fact that other taxable persons carrying on the same activities already enjoy similar recognition; and the fact that the costs of the supplies in question may be largely met by health insurance schemes or other social security bodies (judgment in Zimmermann, C‑174/11, EU:C:2012:716, paragraph 31 and the case-law cited).

36In that context, account may also be taken of the fact that in the Walloon Region, serviced residences are, with old people’s homes and day care centres, the subject of a single piece of legislation, designed to provide a framework for the various institutionalised forms of support and care for elderly persons.

37In that regard, subject to verification by the referring court, it seems to be clear from the documents before the Court that, not only does that piece of legislation define what is covered by the notion of ‘serviced residence’, but it also makes the operation of a serviced residence conditional upon obtaining an authorisation issued by the Walloon Government, which is contingent upon compliance with a number of conditions and requirements. It seems to be apparent from the documents before the Court, subject to confirmation by the referring court, that, among those conditions and requirements, some are common to serviced residences and to retirement homes.

38It is also necessary to take into consideration, for the purpose of assessing the charitable nature of the organisation concerned, the fact that, as is apparent from the order of reference, serviced residences apply prices set under the supervision of the Minister for Economic Affairs.

39As regards, more particularly, the fact that serviced residences operated with a view to profit, such as that operated by LJJ, do not receive any public assistance or any public financial support, it should be observed, first, that since the word ‘organisation’ is in principle sufficiently broad to encompass private entities carrying out activities with a view to profit (judgment in Zimmermann, C‑174/11, EU:C:2012:716, paragraph 57), the fact that LJJ carries out its activities for such a purpose in no way precludes the classification of that company as an ‘other organisation recognised as charitable by the Member State concerned’ within the meaning of Article 13A(1)(g) of the Sixth Directive. Secondly, although it is apparent from the case-law cited in paragraph 35 of the present judgment that the fact that the cost of the supplies provided may be largely borne by health insurance schemes or by social security bodies may be one of the factors to be taken into consideration in order to determine whether the organisation concerned is charitable, that fact, as the Advocate General observed at point 30 of his Opinion, is only one factor among others. Therefore, the lack of public financial support does not in itself exclude such recognition, since that must be assessed in the light of all the relevant factors of the present case.

40In those circumstances, it is for the referring court to determine, taking into consideration all the relevant factors, in particular those mentioned in paragraphs 35 to 39 of the present judgment, whether the national authorities observed, in recognising LJJ as a charitable organisation, the limits of the discretion which is accorded to them in Article 13A(1)(g) of the Sixth Directive.

The condition that the supplies of services must be closely linked to welfare and social security work

41As regards the objective of the exemption provided for in Article 13A(1)(g) of the Sixth Directive, it is clear from the case-law of the Court that that provision does not provide exemption from VAT for every activity performed in the public interest, but only for those which are listed therein and described in great detail (see, to that effect, inter alia, judgments in Stichting Uitvoering Financiële Acties, 348/87, EU:C:1989:246, paragraph 12, and Ygeia, C‑394/04 and C‑395/04, EU:C:2005:734, paragraph 16). By treating certain supplies of services in the public interest in the social sector more favourably for the purposes of VAT, that exemption is intended to reduce the cost of those services and to make them more accessible to the individuals who may benefit from them (judgment in Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraph 30).

42It must be pointed out that the wording of Article 13A(1)(g) of the Sixth Directive expressly mentions the supply of services by old people’s homes among the supply of services and of goods closely linked to welfare and social security work, which thus come under the exemption provided for by that provision.

43In that regard, it should be noted that old people’s homes, like serviced residences, provide persons aged 60 or over with a dwelling with various support and care services. First, the same treatment with regard to VAT should be given to the service consisting of the provision of dwellings, whether those dwellings are provided by an old people’s home or whether they are provided by a serviced residence. Secondly, in so far as those support and care services which serviced residences are obliged to offer, pursuant to the relevant national legislation, correspond to those which old people’s homes must provide in accordance with that legislation, they should be given the same treatment with regard to VAT.

44Consequently, among the services provided by a serviced residence, such as that at issue in the main proceedings, those consisting of the provision of dwellings adapted for elderly persons may benefit from the exemption provided for by Article 13A(1)(g) of the Sixth Directive. In principle, the other services also benefit from the exemption provided for by that provision, on condition in particular that those services, which that serviced residence is obliged to offer pursuant to national legislation, are intended for the support and care of elderly persons and correspond to the services which old people’s homes are obliged to offer also in accordance with national legislation.

45Moreover, contrary to what is claimed by LJJ and Axa Belgium SA (‘Axa’), that finding is not invalidated by the fact that the organisation which operates the serviced residence does not receive any public financial assistance and that the services which it provides do not confer entitlement to any financial support from the social security funds.

46In that regard, it should be noted that the wording of Article 13A(1)(g) of the Sixth Directive does not lay down any requirement which is linked to public financial assistance in favour of the operator concerned or to financial support from public authorities or from social security organisations in favour of the recipients of the services provided. As the Belgian Government stated at the hearing, that provision attaches importance to the intrinsic nature of the transactions carried out and to the status of the operator providing the services or supplying the goods at issue and not to the specific way in which that operator is financed or to the consideration paid to that operator.

47Furthermore, it should be observed that the exemptions provided for in Article 13A(1) of the Sixth Directive are autonomous concepts of EU law and that they must therefore be given an EU definition (judgment in Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraph 22). However, to define the services referred to in Article 13A(1)(g) of the Sixth Directive by reference to the existence of public financial support in favour of the operator or the taking responsibility for the costs of the services by social security bodies would make that concept dependent on the specific features of the relevant legislation of the Member States, which could compromise the autonomous interpretation that must be given to that concept and could create discrepancies in its application within the European Union.

48Moreover, the Court must reject the objection raised by LJJ and by Axa, according to which operators not eligible for public funding would be at a competitive disadvantage in relation to operators receiving such funding because, not being able to deduct VAT, the former would have to pass on in full to the recipients of their services the costs relating to their upstream construction work, including the relevant VAT, a situation which, they claim, would therefore be contrary to the principle of fiscal neutrality.

49According to well-established case-law, the principle of fiscal neutrality precludes, in particular, treating similar goods or supplies of services, which are thus in competition with each other, differently for VAT purposes (see judgment in Zimmermann, C‑174/11, EU:C:2012:716, paragraph 48 and the case-law cited).

50However, in the present case, the lack of financial assistance from public authorities to LJJ and the fact that social security bodies do not assume responsibility for the price of the services performed by LJJ have no bearing on the nature of the services provided by LJJ, those services being comparable to services provided by other operators receiving public assistance or financial support from public authorities. Therefore, the principle of fiscal neutrality does not preclude giving the same treatment, with regard to VAT, to those services.

51Moreover, it should be observed that, according to the wording of the first question, among the services offered by LJJ in connection with its operation of a serviced residence, some paid services are provided on an optional basis both to residents of the serviced residence and to non-residents. In particular, those services concern access to a bar restaurant, a hairdressing and beauty salon, a physiotherapy room, occupational therapy activities, a laundry, a pharmacy where blood can be collected and a doctor’s surgery.

52In that regard, it must be borne in mind that, in accordance with the first indent of Article 13A(2)(b) of the Sixth Directive, the Member States are not to exempt the supply of services envisaged, inter alia, in Article 13A(1)(g) if they are not essential to the transactions exempted. As is apparent from the case-law of the Court, that provision, which is binding on the Member States, lays down conditions which must be taken into account for the interpretation of the various exemptions referred to therein, which, like that provided for in Article 13A(1)(g), concern the supply of services or goods which are ‘closely related’ or ‘closely linked’ to an activity in the public interest (see, to that effect, judgment in Ygeia, C‑394/04 and C‑395/04, EU:C:2005:734, paragraph 26).

53As regards the services provided on an optional basis, mentioned in paragraph 51 of the present judgment, it is for the national court to determine which of them are required under the applicable national legislation. Such services, provided that they are services corresponding to those offered by old people’s homes, may be regarded as being closely linked, in particular, to welfare and are essential to the services exempted.

54In that context, it should be noted that it is apparent from the observations submitted by LJJ and by Axa that the Order of 3 December 1998 lists, as the optional services required, catering services, services for the cleaning of the private dwellings at least once per week and services of attending to residents’ personal laundry. It appears, therefore, that those optional services, provided that they correspond to services offered by old people’s homes, are essential to the carrying out by a serviced residence of the transactions exempted. However, as regards the provision of other optional services in the circumstances at issue in the main proceedings, such as hairdressing and beauty services, it is not apparent that the national legislation requires that serviced residences offer those services, nor does it appear to require that old people’s homes do so, and thus such optional services cannot be regarded as essential to the carrying out by a serviced residence of the transactions exempted. It is however for the national court to verify that point.

55In the light of all the foregoing considerations, the answer to the questions referred is that

Article 13A(1)(g) of the Sixth Directive must be interpreted as meaning that, among the services provided by a serviced residence, such as that at issue in the main proceedings, whose charitable nature must be assessed by the referring court in the light of, in particular, the factors mentioned in the present judgment, those consisting of the provision of dwellings adapted for elderly persons may benefit from the exemption referred to in that provision. The other services provided by that serviced residence may also benefit from that exemption, provided in particular that the services which serviced residences are obliged to offer pursuant to the relevant national legislation are intended to achieve the support and care of elderly persons and correspond to the services which old people’s homes are also obliged to offer in accordance with national legislation.

It is irrelevant in this respect whether or not the operator of a serviced residence such as that at issue in the main proceedings receives a subsidy or any other form of advantage or financial support from public authorities.

Costs

56Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

Operative part

On those grounds, the Court (Fifth Chamber) hereby rules:

Article 13A(1)(g) 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 must be interpreted as meaning that, among the services provided by a serviced residence, such as that at issue in the main proceedings, whose charitable nature must be assessed by the referring court in the light of, in particular, the factors mentioned in the present judgment, those consisting of the provision of dwellings adapted for elderly persons may benefit from the exemption referred to in that provision. The other services provided by that serviced residence may also benefit from that exemption, provided in particular that the services which serviced residences are obliged to offer pursuant to the relevant national legislation are intended to achieve the support and care of elderly persons and correspond to the services which old people’s homes are also obliged to offer in accordance with national legislation.

It is irrelevant in this respect whether or not the operator of a serviced residence such as that at issue in the main proceedings receives a subsidy or any other form of advantage or financial support from public authorities.

Signatures

[Signatures]

( *1 ) Language of the case: French.

OPINION OF ADVOCATE GENERAL

BOT

delivered on 9 July 2015 ¹

‛Reference for a preliminary ruling — Taxation — Sixth Council Directive 77/388/EEC — Exemptions — Article 13A(1)(g) — Activities in the public interest — Supply of services closely linked to welfare and social security work by bodies governed by public law or by other organisations recognised as charitable — Serviced residence’

1The present case concerns the interpretation of Article 13A(1)(g) of Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of legislation of Member States concerning turnover taxes — Common system of value added tax: uniform basis of assessment. ² Under that provision, the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other organisations recognised as charitable by the Member State concerned, is exempt from value added tax (‘VAT’).

2This case provides the court, notably, with an opportunity to interpret the concept of ‘welfare’ within the meaning of Article 13A(1)(g) of the Sixth Directive, so as to determine whether the services provided by a serviced residence can be regarded as closely linked to welfare within the meaning of that provision.

3In this Opinion, I will explain why I think that Article 13A(1)(g) of the Sixth Directive should be interpreted as meaning that a serviced residence, such as that at issue in the main proceedings, which offers persons of at least 60 years of age accommodation enabling them to live independently, together with chargeable related services, also available to non-residents, and which does not have the benefit of any financial assistance from the State, can be characterised as an ‘organisation recognised as charitable’ and regarded as supplying services ‘closely linked to welfare’, within the meaning of that provision. It will be a matter for the national court to determine whether, having regard to the object of the company providing the serviced residence in question and the nature of the services it offers, this characterisation exceeds the discretion which the provision grants to Member States for the purposes of such characterisation, and whether the activities of the serviced residence fall within the scope of welfare. In this regard, it must take account of a combination of factors enabling it to be determined whether those activities are intended to assist persons in need. It will also be for the national court to determine whether the services offered by the serviced residence are essential to the pursuit of such activities.

I – The legal framework

A – EU law

4Article 13A 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 exemption and of preventing any possible evasion, avoidance or abuse:

...

the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other organisations recognised as charitable by the Member State concerned;

...

Member States may make the granting to bodies other than those governed by public law of each exemption provided for in points (b), (g), (h), (i), (l), (m) and (n) of Article 132(1) subject in each individual case to one or more of the following conditions:

the bodies in question must not systematically aim to make a profit, and any surpluses nevertheless arising must not be distributed, but must be assigned to the continuance or improvement of the services supplied,

they shall be managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest, either themselves or through intermediaries, in the results of the activities concerned,

they shall charge prices approved by the public authorities or which do not exceed such approved prices or, in respect of those services not subject to approval, prices lower than those charged for similar services by commercial enterprises subject to [VAT],

the exemptions must not be likely to cause distortion of competition to the disadvantage of commercial enterprises subject to [VAT].

The supply of services or goods shall not be granted exemption as provided for in (1)(b), (g), (h), (i), (l), (m) and (n) above if:

it is not essential to the transactions exempted,

its basic purpose is to obtain additional income for the organization by carrying out transactions which are in direct competition with those of commercial enterprises liable for [VAT].’

B – Belgian law

5Article 44(2)(2) of the Value Added Tax Code, ³ in the version in force up to 21 July 2005, provides for an exemption from VAT in respect of supplies of services and goods closely linked to welfare, by bodies which have the care of elderly persons as their object, which are recognised as such by the competent authority and which, in the case of bodies governed by private law, operate in social conditions comparable to those of bodies governed by public law.

6The Programme Law of 11 July 2005, ⁴ which entered into force on 22 July 2005, amended this provision. The new Article 44(2)(2) thus provides for an exemption from VAT in respect of supplies of services and goods closely linked to welfare, social security work and the protection of children and young people, by public law bodies or other organisations recognised as charitable by the competent authority. This new provision expressly refers to ‘bodies having the object of caring for the elderly’.

7Article 2(1) of the decree on old people’s homes, serviced residences and day care centres for the elderly, creating the Walloon council for the third age, of 5 June 1997, ⁵ defines an old people’s home as ‘an establishment intended to provide accommodation to persons of at least 60 years of age who have their usual residence there and who benefit there from communal domestic services and communal services providing assistance with daily life and, where necessary, the care of nurses or paramedics’.

8A ‘serviced residence’ is defined in Article 2(2) of the Decree of 5 June 1997 as ‘one or more buildings, however described, which constitute a functional unit, incorporating individual accommodation which is intended for persons of at least 60 years of age, enabling them to lead an independent life, and which has the benefit of services which such persons can call on freely’. This provision also stipulates that ‘the premises, facilities and communal services of the serviced residence may also be available to other persons of at least 60 years of age’.

9In its decision to refer the matter for a preliminary ruling, the cour d’appel de Mons (Belgium) indicates that the prices charged by a serviced residence are fixed under the supervision of the Ministry of Economic Affairs.

II – The facts of the main proceedings and the questions referred

10Les Jardins de Jouvence SCRL (‘Les Jardins de Jouvence’) is a company governed by Belgian law which was incorporated in 2004. Its objects are the commercial operation and the management of care institutions, and the pursuit of all activities relating directly or indirectly to healthcare and assistance, in particular, to the sick and to disabled elderly people.

11On 20 October 2004, Les Jardins de Jouvence notified the VAT authority of the commencement of its business, describing this as ‘letting of studio apartments intended for the able-bodied’. On 27 October 2006, it received a provisional operating licence from the competent Walloon authorities, for the period from 28 June 2006 to 27 June 2007. On 27 March 2007, at a General Meeting of the partners, it was decided that the objects of the company should be extended to ‘the commercial operation of restaurants, café/brasseries, public houses, snack-bars, reception or dining halls and all similar establishments’, as well as ‘the commercial operation of a hairdressing, beauty and nail salon’.

12Specifically, the company provides its tenants with accommodation designed for one or two people, comprising an equipped kitchen, a living room, a bedroom and an equipped bathroom. Furthermore, various services are offered, on a chargeable basis, to the tenants and to others who are not tenants, more specifically a bar/restaurant, a hair and beauty salon, a physiotherapy room, ergotherapeutic activities, a laundry, a pharmacy where blood samples can be taken and a doctor’s surgery.

13Les Jardins de Jouvence carried out significant building works as well as fitting-out works essential to its company objects, in order to pursue the activity of a serviced residence. The purpose of these works, which began in early August 2004 and finished in September 2006, was to add a new building — that given over to the company’s serviced residence — as an annex to the existing old people’s home.

14In the belief that the company was subject to VAT, Les Jardins de Jouvence deducted the VAT paid in respect of the construction of this new building in its tax returns for the years 2004 to 2006.

15On 5 October and 14 November 2006, the VAT section of the authority for the taxation of businesses and revenues inspected the accounts of Les Jardins de Jouvence, with regard to the application of VAT legislation in respect of the period from 30 August 2004 to 30 September 2006. On 25 January 2007 it produced a report in which it stated that it considered that the company was an exempt taxable person for VAT purposes and that all transactions entered into by the serviced residence were exempt from VAT by virtue of Article 44(2)(2) of the VAT Code, in the version which was in force up to 21 July 2005. The authority concluded that, as an exempt taxable person, the company could not recover VAT on construction works, on the acquisition of the immovable property by reason of its intended use, or on any of its expenses. On that basis, according to the authority, Les Jardins de Jouvence was obliged to repay a sum of EUR 663437.25 to the Belgian state, corresponding to the VAT wrongly deducted in the tax returns.

16Furthermore, the authority considered that, as Les Jardins de Jouvence is an exempt taxable person, VAT of 12% on the works of construction of the building itself, and 21% on the landscaping works, should have been incorporated into the invoices issued by the contractors, with no right of deduction on the part the company.

17On that basis the Belgian State claims, according to the report referred to above, the sum of EUR 436132.69 in respect of VAT due, EUR 43610 in respect of proportionate tax penalties, and late payment interest at the statutory rate of 0.80% per month, calculated on the VAT due from 21 October 2006.

18By letter of 25 January 2007, the VAT inspector of Dour (Belgium) informed Les Jardins de Jouvence of his decision to close its VAT current account, with effect from 30 September 2006.

19Following the report referred to above, on 13 February 2007 a demand for payment was served on the company, which opposed it by means of an application filed on 20 February 2007 at the registry of the tribunal de première instance de Mons. By judgment of 19 June 2012, the tribunal de première instance dismissed the action brought by the company, which, consequently, appealed.

20The cour d’appel de Mons, having doubts concerning the interpretation to be given to Article 13A(1)(g) of the Sixth Directive, decided to stay proceedings and refer the following questions to the Court of Justice for a preliminary ruling:

Is a serviced residence, within the meaning of the [Decree of 5 June 1997, which makes available] with a view to profit individual dwellings designed for one or two persons, comprising a fitted kitchen, a sitting room, a bedroom and a fitted bathroom, thereby enabling residents to lead an independent life, together with a range of optional services supplied against payment, with a view to profit, those services not being available exclusively to the occupants of the serviced residences (a restaurant/bar, a hairdressing and beauty salon, a physiotherapy room, occupational therapy activities, a laundry, a pharmacy and blood collection point and a doctor’s surgery), an essentially charitable organisation which supplies ‘services and goods closely linked to welfare and social security work’ for the purposes of Article 13A(1)(g) of [the] Sixth Directive ... ?

Is the answer to Question 1 different if the serviced residence in question receives, for the supply of the services in question, subsidies or any other form of advantage or funding from public authorities?’

III – Analysis

21By its questions, which should, in my view, be considered together, the referring court essentially asks the Court whether Article 13A(1)(g) of the Sixth Directive should be interpreted as meaning that a serviced residence, such as that at issue in the main proceedings, which offers persons of at least 60 years of age accommodation enabling them to live independently, together with chargeable related services, also available to non-residents, and which does not have the benefit of any financial assistance from the State, can be characterised as an ‘organisation recognised as charitable’ and regarded as supplying services ‘closely linked to welfare’, within the meaning of that provision.

22In reality, the provision in question lays down two cumulative conditions of eligibility for VAT exemption. First of all, the organisation in question must be recognised as ‘charitable’. Secondly, the supplies of goods and services made by that organisation must be ‘closely linked to welfare and social security’. ⁶ While the case-law on the first condition is illuminating enough to be helpful in giving a reply which will be of assistance to the referring court, the same is not true of the second condition, which, as far as I am aware, has not been interpreted to date.

A – ‘Organisations recognised as charitable ’

23As stated in the last paragraph, the case-law on the interpretation of ‘organisations recognised as charitable’, within the meaning of the Sixth Directive, is relatively abundant.

24Thus, the Court has held, in relation to this concept, that in principle it is for the national law of each Member State to lay down rules in accordance with which recognition may be granted to organisations which request it. Member States have a discretion in that respect. ⁷

25However ‘in order to determine the organisations which should be recognised as “charitable” for the purposes of Article 13A(1)(g) of the Sixth Directive, it is for the national authorities, in accordance with EU law and subject to review by the national courts, to take into account, in particular, the existence of specific provisions, be they national or regional, legislative or administrative, or tax or social security provisions; the public interest nature of the activities of the taxable person concerned; the fact that other taxable persons carrying on the same activities already enjoy similar recognition; and the fact that the costs of the supplies in question may be largely met by health insurance schemes or other social security bodies’. ⁸

26In the present case, I consider that serviced residences are indeed the subject of specific provisions in Belgian regional legislation.

27It is apparent from the material on the file that Article 2(2) of the decree of 5 June 1997 specifically defines what is meant by ‘serviced residence’. Furthermore, under that decree, serviced residences must obtain an authorisation from the public authorities in order to be able to open and operate. ⁹ In particular, such serviced residences must meet certain requirements which are also applicable to old people’s homes, concerning for example the manner in which prices for accommodation or entry can be changed, accounting, minimum and maximum residential and occupancy capacities, requisite experience and qualifications and minimum requirements of activity and presence required to act as director. ¹⁰ Similarly, in order to obtain such authorisation, serviced residences must meet certain requirements as to how a permanent presence, enabling residents to be attended on when necessary, is ensured, and as to optional services which the operator is required to organise or make available at the request of residents. ¹¹

28In my view there is no doubt that the activities carried out by Les Jardins de Jouvence are public interest activities. It will be recalled that the object of the company is to rent accommodation to able-bodied persons of at least 60 years of age and to pursue all activities relating directly or indirectly to healthcare and assistance, in particular, to the sick and to disabled elderly people.

29Les Jardins de Jouvence considers that the fact that its serviced residence operates with a view to profit and the fact that neither it nor its residents receive subsidies or financial assistance of any kind from the public authorities, in contrast to old people’s homes, demonstrate that it cannot be characterised as an ‘organisation recognised as charitable’ within the meaning of Article 13A(1)(g), of the Sixth Directive.

30I do not share that opinion. First of all, I would point out that the Member States have a discretion in recognising organisations as charitable. Secondly, it is apparent from the case-law that the meaning of ‘organisation’, as it appears in that provision, is wide enough to encompass private entities operating with a view to profit. ¹² Finally, while the Court has provided national authorities with certain considerations to enable them to determine whether or not an organisation is recognised as being ‘charitable’, for the purposes of that provision, that relating to any financial assistance from the Member State is only one of the factors which they ‘may’ take into account. These factors do not constitute an exhaustive list of requirements which the organisation in question must meet. It is therefore on the basis of a combination of factors, making up a bundle of indicators, that the national authorities can determine whether such an organisation can be regarded as an ‘organisation recognised as charitable’ for the purposes of Article 13A(1)(g) of the Sixth Directive.

31Accordingly, taking account of the matters referred to above, I consider that Les Jardins de Jouvence can be characterised as an ‘organisation recognised as charitable’ within the meaning of that provision. It will be for the national court to determine, having regard to the company objects of Les Jardins de Jouvence and the nature of the services it offers, whether this characterisation exceeds the discretion which that provision grants to Member States for the purposes of such characterisation.

B – ‘The supply of services and of goods closely linked to welfare and social security work ’

32In my view, the services supplied by Les Jardins de Jouvence can be excluded at the outset from services closely linked to social security work. This comprises all regimes which ensure protection by indemnifying the population against the various social risks, such as sickness, maternity, old age or accidents in the workplace. Clearly, it is not the object of Les Jardins de Jouvence to supply such services. Similarly, it is not its object to supply goods.

33My examination of the matter thus leads me to consider the following issues. First of all, it is necessary to determine what is covered by ‘welfare’ within the meaning of Article 13A(1)(g) of the Sixth Directive. Secondly, I will explain what, in my view, is to be understood by the terms ‘closely linked’ within the meaning of that provision. Lastly, it will be necessary to determine whether the use of the conjunction ‘and’ between ‘welfare’ and ‘social security work’ implies that the services must be closely linked to both of these concepts. If the examination leads to the conclusion that the services supplied by Les Jardins de Jouvence do indeed fall within the scope of welfare, but that this conjunction requires them to relate simultaneously to both welfare and social security work, then it will not be possible to regard serviced residences, such as the one at issue in the main proceedings, as exempt taxable persons.

34In relation, first of all, to welfare, I note that, although the case-law on Article 13A(1)(g) of the Sixth Directive is relatively abundant, the Court has never given a definition of this concept in the context of the Sixth Directive. The furthest it has gone, in the judgment in Kügler, ¹³ is to indicate that ‘the provision of general care and domestic help by an out-patient care service to those in a state of physical or economic dependence ... 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’. ¹⁴

35Article 13A of the Sixth Directive is headed ‘Exemptions for certain activities in the public interest’. It is part of Title X of the directive, which is headed ‘Exemptions’. As the Court stated in its judgment in Kingscrest Associates and Montecello, ¹⁵ in relation to the objectives pursued by the exemptions under Article 13A(1)(g) and (h) of the Sixth Directive, it is clear from that provision that those exemptions, by treating certain supplies of services in the public interest in the social sector more favourably for the purposes of VAT, are intended to reduce the cost of those services and to make them more accessible to the individuals who may benefit from them. ¹⁶

36In the light of that case-law, it is my clear understanding that the exemption from VAT under Article 13A(1)(g) of the Sixth Directive is intended to facilitate access to services which are considered to have social utility, in the sense that they are intended to assist people in need, such services normally falling within the remit of the public authorities. Welfare thus underpins assistance to individuals, a point which seems to me, moreover, to be confirmed by the amendment to the French version of this provision effected by Directive 2006/112, which replaced assistance sociale with aide sociale. ¹⁷

37While there is settled case-law to the effect that the terms in which the exemptions in Article 13 of the Sixth Directive are couched are to be strictly interpreted, I think nevertheless that the interpretation that the Court gives to ‘welfare’ should not be such as to deprive the provision in which it appears of any practical effect, ¹⁸ particularly since this provision is intended to facilitate access to services which are considered to have social utility.

38Unlike services falling within the scope of social security, welfare is characterised by the individual assessment of needs. ¹⁹ In my opinion, it is precisely because these needs are not covered by social security that it becomes necessary — even vital — to the person concerned for an organisation governed by public law or recognised as charitable by the Member State to cater for them. The same is true of taking responsibility for the needs of elderly or disabled people, which requires the provision of accommodation and care adapted to their vulnerable condition.

39The needs of such people are not necessarily just physical in nature. They may also consist in a need for financial assistance to alleviate a lack of economic resources which places them in a situation of poverty.

40In principle, the activities of private organisations such as Les Jardins de Jouvence fall within the scope of welfare, in that they consist in providing accommodation designed for the elderly. It is true that, unlike other organisations such as old people’s homes, whose residents are very often elderly people who are not independent and require medical supervision for all their everyday activities, serviced residences like Les Jardins de Jouvence offer accommodation for independent elderly people. Nevertheless, these are people who, because of changes taking place in their lives, can no longer lead them in the same way as before. They therefore choose to reside in an environment which they regard as suited to their specific needs, such as the necessity for a lift, a smaller apartment designed in such a way that falls can more easily be avoided, or even specialised home automation. A serviced residence provides an environment in which such people will be certain to find help in the event of need, and which offers them every assurance of peace of mind with regard to their wellbeing. They also know that, within such an environment, it will be mandatory for services to be offered which free them from daily tasks (such as cleaning and cooking) or the need to travel by car, in that certain services will be available on site, such as hairdressing and nail care.

41At the hearing, AXA Belgium SA, an intervening party in the main proceedings, stated that, in its view, activities relating to welfare must necessarily be at the expense of a public body, which, it submits, is not the case in this matter. I do not share that point of view. Amongst other things, it would be paradoxical to consider that an organisation which is not governed by public law, which operates with a view to profit and which does not receive any financial assistance, can be recognised as charitable, within the meaning of Article 13A(1)(g) of the Sixth Directive, while considering that its activity cannot be recognised as falling within welfare, precisely because it does not receive any public financial assistance.

42In any event, I think that will be for the national court to determine whether an organisation recognised as charitable is engaged in activities within the meaning of ‘welfare’ in this provision. In this regard, that court will have to take account of a combination of factors which will enable it to be determined whether such activities are intended to assist people in need.

43Next, in relation to services ‘closely linked’ to welfare, as referred to in Article 13A(1)(g) of the Sixth Directive, it is apparent from the case-law of the Court that this concept implies that such services are linked to a welfare activity where they are actually provided as ancillary services relating to that activity. ²⁰

44In this regard, I would observe that the first indent of Article 13A(2)(b) of the Sixth Directive provides that the supply of services or goods is not to be granted exemption under Article 13A(1)(g) if it is not essential to the transactions exempted. Furthermore, the Court has stated that a service may be regarded as ancillary to a principal service if it does not constitute an end in itself, but a means of better enjoying the supplier’s principal service. ²¹

45In my view, taking account of the points examined above, there is no doubt that the services offered by Les Jardins de Jouvence are closely linked to welfare, within the meaning of Article 13A(1)(g) of the Sixth Directive.

46As has been seen, serviced residences are intended to enable elderly people to live in an environment which is adapted to their situation. The mandatory and optional services offered by Les Jardins de Jouvence enable them to enjoy the principal service in the best possible conditions, that service being the provision of suitable accommodation within a caring setting. The activity of the company seems to me to form an indivisible whole. What would be the position if it only made accommodation available to its residents? Would they then choose to live in the residence? It seems to me that the answer must be in the negative. The raison d’être of serviced residences is, as the name suggests, to offer elderly people accommodation with a selection of services, so as to enable them to live independently and with peace of mind.

47The same does not apply, however, to the services supplied to non-residents. It is clear that, in that situation, the services are not ancillary, but completely separate from the principal service. Accordingly, in my opinion they do not fulfil the requirement, laid down by Article 13A(1)(g) of the Sixth Directive, of being ‘closely linked’ to welfare.

48Lastly, concerning the use of the conjunction ‘and’ in that provision, I do not think that this should be regarded as having a cumulative effect. I note, in this regard, that the Court, in its judgments in Commission v France ²² and Dornier, ²³ in relation to the exemption under Article 13A(1)(b) of the Sixth Directive, seems to have ruled out the possibility that the conjunction has a cumulative effect. In the French version of the first judgment, the Court stated that this provision does not include any definition of the concept of activities ‘closely related’ to hospital or medical care. ²⁴

49Furthermore, to confer cumulative effect on the use of that conjunction would, in my opinion, run counter to the objective pursued by Article 13A(1)(g) of the Sixth Directive, which is to ensure that the exemption of certain supplies of services of public interest which are made in the social sector can reduce the cost of those services, and thus make them more accessible to those individuals who could benefit from them.

50In this respect, it is important to note that not all services linked to welfare also fall within the concept of social security. Indeed this would be the case, according to Les Jardins de Jouvence, in relation to those services in respect of which the residents do not receive any assistance from the Institut national d’assurance maladie invalidité, the body which finances social security.

51In the light of the foregoing, I consider that a serviced residence, such as that at issue in the main proceedings, can be regarded as supplying services ‘closely linked to welfare’, within the meaning of Article 13A(1)(g) of the Sixth Directive. It will be for the national court to determine whether the activities of the serviced residence fall within the scope of welfare. In this regard, it must take account of a combination of factors enabling it to be determined whether those activities are intended to assist persons in need. It will also be for the national court to determine whether the services offered by the serviced residence are essential to the pursuit of such activities.

IV – Conclusion

Conclusion

52Having regard to all of the above considerations, I suggest that the Court should answer the Cour d’appel de Mons as follows:

Article 13A(1)(g) of the Sixth Council Directive 77/388/EEC of 11 May 1977 on the harmonisation of legislation of Member States concerning turnover taxes — Common system of value added tax: uniform basis of assessment, should be interpreted as meaning that a serviced residence, such as that at issue in the main proceedings, which offers persons of at least 60 years of age accommodation enabling them to live independently, together with chargeable related services, also available to non-residents, and which does not have the benefit of any financial assistance from the State, can be characterised as an ‘organisation recognised as charitable’ and regarded as supplying services ‘closely linked to welfare’, within the meaning of that provision.

It will be for the national court to determine:

whether, having regard to the company objects of the serviced residence in question and the nature of the services it offers, this characterisation exceeds the discretion which that provision grants to Member States for the purposes of such characterisation;

whether the activities of the serviced residence fall within the scope of welfare. In this regard, it must take account of a combination of factors enabling it to be determined whether those activities are intended to assist persons in need; and

whether the services offered by the serviced residence are essential to the pursuit of such activities.

¹ Original language: French.

² OJ 1977 L 145, p. 1, ‘the Sixth Directive’.

³ Moniteur belge of 3 July 1969, p. 7046.

⁴ Moniteur belge of 12 July 2005, p. 32180.

⁵ Moniteur belge of 26 June 1997, p. 17043, ‘the decree of 5 June 1997’.

⁶ Judgment in Kingscrest Associates andMontecello (C‑498/03, EU:C:2005:322, paragraph 34).

⁷ Judgment in Zimmermann (C‑174/11, EU:C:2012:716, paragraph 26 and the case-law cited).

⁸ Ibid. (paragraph 31 and the case-law cited). For a more recent interpretation, given by the Court after the entry into force of Council Directive 2006/12/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1 and corrigendum OJ 2007 L 335, p. 60), see the judgment in go fair Zeitarbeit (C‑594/13, EU:C:2015:164, paragraphs 21, 26 and 29).

⁹ See the first paragraph of Article 5(1) of the decree of 5 June 1997.

¹⁰ See the second paragraph of Article 5(5) of the decree of 5 June 1997, which refers to the matters set out in Article 5(2)(1) to Article 5(2)(8).

¹¹ See the second paragraph of Article 5(5) of the decree of 5 June 1997.

¹² Judgment in go fair Zeitarbeit (C‑594/13, EU:C:2015:164, paragraph 27 and the case-law cited).

¹³ C‑141/00, EU:C:2002:473.

¹⁴ Paragraph 44.

¹⁵ C‑498/03, EU:C:2005:322.

¹⁶ Paragraph 30.

¹⁷ See Article 132(1)(g) of that directive.

¹⁸ Judgment in Zimmermann (C‑174/11, EU:C:2012:716, paragraph 22 and the case-law cited).

¹⁹ See judgments in Frilli (1/72, EU:C:1972:56, paragraph 14); Biason (24/74, EU:C:1974:99, paragraph 10); and Hosse (C‑286/03, EU:C:2006:125, paragraph 37).

²⁰ See judgment in CopyGene (C‑262/08, EU:C:2010:328, paragraphs 38 and 39 and the case-law cited).

²¹ Ibid. (paragraph 40).

²² C‑76/99, EU:C:2001:12.

²³ C‑45/01, EU:C:2003:595.

²⁴ Judgment in Commission v France (C‑76/99, EU:C:2001:12, paragraph 22). My italics.