VATcodexEU VAT case law · Court of Justice and General Court

Bodies governed by public law EU VAT case law

26 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 1989 to 2026.

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The 26 cases, most recent first

Under each case, what the Court decided, from its summary. The summaries are AI-generated and are not official documents: open the case for the Court’s own text.

T-575/24 Digipolis

Judgment · 25 February 2026 · Belgium

VAT status of an intermunicipal commissioning association

Such an association is a taxable person on its supplies to members, with no distinction by reference to members' VAT status, provided the supplies are for consideration and the association independently carries on an economic activity, matters for the national court. Cost-covering, pre-set lump sum contributions do not break the direct link. Article 13(1) does not shelter it. Telematics is telecommunications within Annex I and not negligible, and non-taxation could distort competition. The "emanation" theory cannot override that status. The Belgian "emanation" tolerance for commissioning associations and intermunicipal structures is incompatible with the Directive where the entity has its own legal personality, organs, staff, assets and risk.

C-344/22 Gemeinde A

Judgment · 13 July 2023 · Germany

Spa tax and the direct link requirement

The municipality does not make a supply of services for consideration. There is no reciprocal legal relationship. Liability to the spa tax attaches to the stay in the municipal territory, whatever its purpose, not to any use of the facilities, and those paying enjoy no advantage over residents and day visitors who use the same freely and gratuitously accessible facilities. Absent a direct link, the payment is not consideration. The second question on distortions of competition under Article 13(1) therefore did not need to be answered. Public bodies funding open-access infrastructure from a residence-based or stay-based levy cannot treat that levy as taxable turnover, and so cannot recover input VAT on the related construction and maintenance costs. Relevant to advisers to municipalities, tourism and leisure authorities, and operators of parks, footpaths and similar facilities financed by local charges.

C-677/21 Fluvius Antwerpen

Judgment · 27 April 2023 · Belgium

VAT on electricity taken unlawfully from the distribution network

Unlawful consumption of electricity is a taxable supply of goods for consideration under Article 14(1). Consumption of electricity coincides with disposal as owner, and the legal relationship criterion is met by the applicable energy legislation and connection regulation, so Article 14(2)(a), a lex specialis, does not apply. It is an economic activity under Article 9(1) because the loss is a risk inherent in operating the network. Even for a public law body acting as a public authority, the activity is negligible only if so minimal in space or time that resulting competitive distortion is insignificant. Where a network operator or utility recovers the cost of energy theft or unmetered consumption, the energy element of the compensation is consideration for a taxable supply and not damages outside VAT. Relevant to advisers on energy, water, gas and heat recovery billing.

C-612/21 Gmina O.

Judgment · 30 March 2023 · Poland

Municipal renewable energy installations and the limits of economic activity

Such activity does not constitute a supply of goods and services subject to VAT where it is not intended to obtain income on a continuing basis and residents pay at most a quarter of the costs incurred, the balance coming from public funds. The decisive point is the absence of economic activity. No permanence, no staff, structurally loss-making pricing unlike an RES installer. Article 13(1) therefore did not need examination, and the taxable amount question fell away. Useful for advisers to local authorities running subsidised energy efficiency, insulation or renewables schemes.

C-616/21 Gmina L.

Judgment · 30 March 2023 · Poland

Municipal asbestos removal financed by public subsidy, no economic activity

The Court held that such an activity does not constitute a supply of services subject to VAT. Even if a third party subsidy can be consideration, so that a direct link may exist, the municipality does not carry out an economic activity. It employs no staff, seeks no customers, the operation is not recurrent, residents pay nothing and its organisational costs are unreimbursed, so it bears only risk of loss with no profit prospect. Article 13(1) therefore needed no consideration. Article 28 (commission agent) did not apply absent a mandate. Confirms the Gemeente Borsele line for local authorities running one off, grant funded schemes for residents.

C-269/20 Finanzamt T (Internal supplies within a VAT group)

Judgment · 1 December 2022 · Germany

Designation of the controlling company as the single taxable person of a VAT group

Article 4(4), second subparagraph, does not preclude a Member State from designating the controlling company, rather than the group itself, as the single taxable person, provided that company can impose its will on the other members and there is no risk of tax losses. Internal supplies made by a group member for the single taxable person's public authority activities are not taxable under Article 6(2)(b). Non-economic activities are not "purposes other than those of the business", and here the services were in any event paid for.

C-228/20 I (VAT exemption for hospital services)

Judgment · 7 April 2022 · Germany

Exemption for private hospitals and recognition under national health insurance rules

Member States may require private hospitals to be duly recognised, that requirement applying to all establishments named in Article 132(1)(b), but discretion is bounded by fiscal neutrality. Legislation tying recognition to needs-based hospital planning or contract discretion is precluded where it treats comparable private hospitals supplying similar services under comparable social conditions differently. Comparability may be assessed by reference to regulatory conditions and performance and cost-efficiency indicators applicable to public hospitals, the calculation of fixed-rate daily fees, and coverage leaving patients bearing similar costs. Private hospitals and clinics in Member States where exemption depends on admission to a capacity-based public planning system or on discretionary contracts with sickness funds can challenge refusals grounded solely in the absence of demonstrated need.

C-604/19 Gmina Wrocław (Transformation of the right of usufruct)

Judgment · 25 February 2021 · Poland

Statutory conversion of perpetual usufruct into ownership by a municipality

The conversion is a supply of goods under Article 14(2)(a). The fee is compensation because it is directly linked to the transfer of ownership and effectively paid, regardless of its nature or amount. Because the fee is payable over 20 years, the municipality obtains income on a continuing basis, so this is economic activity. Absence of active steps is irrelevant. Subject to national verification, the municipality does not exercise public law powers, merely certifying the conversion, so Article 13(1) does not apply. Confirms that Article 14(2)(a) operates independently of Article 14(1). Relevant to municipalities and state property bodies across Member States dealing with statutory land conversions, expropriations and similar compulsory transfers.

C-211/18 Idealmed III

Judgment · 5 March 2020 · Portugal

Private hospitals and comparable social conditions

Those contractual and funding features are relevant factors in assessing comparable social conditions, alongside the public interest nature of the services. Price fixing is not a precondition, its absence does not defeat exemption. The proportion of contracted services within the provider's total activity is irrelevant. The test attaches to the services, not the provider. Once supplies fall within Article 132(1)(b) exemption is mandatory, and the national option to tax, including any unexpired minimum period, cannot keep them taxed. Relevant to private hospitals, clinics and diagnostic centres, particularly in Portugal, that hold an option to tax while progressively contracting with public health bodies or social security schemes.

C-182/17 Nagyszénás Településszolgáltatási Nonprofit Kft.

Judgment · 22 February 2018 · Hungary

A municipal company performing public tasks under contract is taxable

The Court holds, subject to verification by the referring court, that the activity is a supply of services for consideration and subject to VAT. Subject to findings of fact and of national law, it does not fall within Article 13(1) where it constitutes an economic activity within the meaning of Article 9(1). Ownership by the municipality and the public character of the tasks do not of themselves make the company a body governed by public law acting as a public authority. The practical companion to Saudacor.

C-344/15 National Roads Authority

Judgment · 19 January 2017 · Ireland

Public bodies and significant distortions of competition on toll roads

The public body is not to be deemed in competition with those private operators. The second subparagraph applies only where the activity is carried on in actual or potential competition with private operators and the different VAT treatment causes significant distortions, assessed on the economic circumstances. The mere presence of private operators, absent factual evidence or market analysis, proves nothing. Here the body acted within a legal scheme peculiar to it, retaining ultimate statutory responsibility and control over toll authorisation, and private entry was purely theoretical, so it was not in competition. Confirms that Isle of Wight does not create an irrebuttable presumption of distortion whenever a public body and private operators carry on activities of the same nature.

C-335/14 Les Jardins de Jouvence

Judgment · 21 January 2016 · Belgium

Welfare exemption for a profit-making serviced residence for the elderly

The provision of dwellings adapted for elderly persons can be exempt, subject to the national court verifying charitable recognition. Other services are exempt only where national legislation obliges serviced residences to offer them for the support and care of the elderly and they correspond to services old people's homes must provide. Optional extras not so required (for example hairdressing and beauty services) are not essential and fall outside. Absence of public subsidy or social security funding is irrelevant. Operators of assisted-living and serviced residences, including commercial ones, cannot rely on a lack of public funding to stay taxable and preserve input VAT recovery on construction.

C-174/14 Saudaçor

Judgment · 29 October 2015 · Portugal

When a regional health services company counts as a body governed by public law

The Court holds that the activity may fall within Article 13(1) where it is an economic activity, provided the referring court finds that the company is to be classified as a body governed by public law, that it carries out the activity as a public authority, and that exemption would not lead to significant distortions of competition. The concept must not be interpreted by reference to the procurement definition in Directive 2004/18. The judgment is the standard reference for public sector bodies operating through corporate vehicles.

C-276/14 Gmina Wrocław

Judgment · 29 September 2015 · Poland

Independence of municipal budgetary entities as taxable persons

Bodies governed by public law cannot be taxable persons unless they independently carry out economic activity within Article 9(1). The test is the same for public and private persons. Whether the entity acts in its own name, on its own behalf and under its own responsibility, and bears the economic risk. Entities acting in the municipality's name, with no liability for damage, no own property and all revenue and costs falling on the municipal budget, form a single taxable person with the municipality. No temporal limitation was granted. Public sector bodies operating through unincorporated arms must test each arm against the employer-employee style independence criteria rather than assume separate registration. Relevant to advisers to local government, schools, cultural and inspection bodies.

C-72/13 Gmina Wrocław

Order · 26 February 2015 · Poland

A municipality sales and contributions in kind may be subject to VAT

The Court holds that the directive does not preclude those transactions being taxed, provided the referring court finds that they constitute an economic activity under Article 9(1) and are not carried out by the municipality acting as a public authority under the first subparagraph of Article 13(1). Even if the municipality is found to act as a public authority, the transactions may still be taxed if exempting them would cause significant distortions of competition. The order sets out the two stage test that every public body disposal has to pass.

C-174/11 Zimmermann

Judgment · 15 November 2012 · Germany

Recognition of private providers as charitable for the welfare exemption

Article 13A(1)(g), read in the light of fiscal neutrality, precludes making the exemption for out-patient care supplied by commercial providers subject to a condition such as the one at issue, that in the preceding calendar year the costs were borne by the statutory social security or social welfare authorities in at least two thirds of cases, where that condition is not capable of ensuring equal treatment in recognising the charitable character of bodies other than those governed by public law. Member States keep a discretion in granting that recognition, and the extent of public funding is a factor they may weigh, but the discretion is exercised within the limits of neutrality. The same care exempted without any threshold when supplied by listed welfare associations cannot be taxed when supplied by a commercial provider. The judgment fixes that the discretion Member States hold in recognising a body as charitable under Article 13A(1)(g) is bounded by fiscal neutrality, and that a funding-mix threshold fails where it separates providers of the same care by their status rather than by the care itself.

C-79/09 Commission v Netherlands

Judgment · 25 March 2010 · Netherlands

Structural staff secondment as a closely related supply, and the burden of proof in infringement actions

The action was dismissed in full. Whether a supply of staff is temporary or structural is not in itself decisive. What matters is whether it is an end in itself or a means of better enjoying the principal exempt service. The Commission had produced no evidence on that point, nor on the Horizon College conditions, nor that the public bodies acted under the same legal conditions as private traders, nor that any distortion of competition was real rather than hypothetical. Confirmation that duration is not the test for a closely related supply. Relevant to exempt sector employers using shared or joint employment arrangements, and to public bodies seconding officials to cross-border cooperation structures.

C-554/07 Commission v Ireland

Judgment · 16 July 2009 · Ireland

Ireland's blanket exclusion of public bodies from VAT

The Court upheld the action on all three limbs. Ireland had failed to lay down a general requirement that public bodies be taxable on activities carried on otherwise than as public authorities. A general requirement that they be taxable where non-taxation causes significant distortions of competition, together with criteria framing the exercise of the Minister's discretion, and a general requirement that they be taxable on the Annex I activities save where carried out on a negligible scale. Ireland had therefore failed to fulfil its obligations under Articles 2, 9 and 13 and was ordered to pay the costs. The judgment defines what correct transposition of Article 13 looks like.

C-102/08 SALIX Grundstücks-Vermietungsgesellschaft

Judgment · 4 June 2009 · Germany

Public bodies, exempt activities treated as public authority activities and distortions of competition

Member States must make a specific, express choice to use the fourth subparagraph option. Any legislative technique will do (including delegation to the executive) provided it is binding, specific, precise, clear and reviewable by the courts. Divergent administrative practice and inference from unwritten concepts are not enough. The second subparagraph applies to significant distortions of competition harming the public body itself, not only its private competitors, but only once the activity is found to be carried out as a public authority. Relevant to landlords, developers and lessors dealing with public sector tenants, and to public bodies letting property.

C-456/07 Mihal

Order · 21 May 2008 · Slovakia

A self-employed bailiff is a taxable person despite exercising public powers

Ruling by order, the Court held that the activity is not exempted from VAT merely because it consists in acts falling within the rights and powers of a public authority. Even assuming that a bailiff performs such acts, under legislation of the kind at issue he does not exercise his activity in the form of a body governed by public law, since he is not integrated into the organisation of the public administration but acts as an independent economic operator in a self-employed capacity. He therefore falls outside the exclusion. The rule that matters here is cumulative.

C-276/97 Commission v France

Judgment · 12 September 2000 · France

VAT on motorway tolls and the public bodies exclusion

Providing road access for a toll is an economic activity and a supply for consideration, there being a direct link between the toll and the use of the road. France infringed Articles 2 and 4 only where the service is not supplied by a body governed by public law. The Commission failed to show that public bodies were not operating under a special legal regime, and its distortion of competition argument was inadmissible. Own resources plus interest are due, but recovery is limited by analogy with Article 9(2) of Regulation No 1553/89 to the 1993 budgetary year onwards. Tolling and infrastructure concessions are within the scope of VAT where the operator is a private or quasi-public entity, even if its functions are conferred by law and exercised under public law prerogatives. Relevant to road, tunnel and bridge concessionaires and their advisers.

C-358/97 Commission v Ireland

Judgment · 12 September 2000 · Ireland

VAT on road and bridge tolls charged by private operators

Providing road access for a toll is an economic activity and a supply for consideration. There is a direct link between the road use and the toll. Article 4(5) requires both action as a public authority and a body governed by public law. The Irish operators were private-law traders, so it did not apply. Article 13B(b) did not cover the tolls because the parties agreed no duration of enjoyment, an essential element of letting. Own resources recoverable only from the 1994 budgetary year, by analogy with the four-year correction rule. Confirms that infrastructure charges levied by concessionaires and other private operators are taxable, whatever the statutory framework or public interest character of the activity.

C-359/97 Commission v United Kingdom

Judgment · 12 September 2000 · United Kingdom

VAT treatment of road and bridge tolls

Tolling is an economic activity and a supply of services for consideration, there being a direct link between access and the toll. The Article 4(5) exclusion cannot apply where the operator is a private law trader, and the Commission had not shown that public bodies operated on the same terms as private traders. No letting exemption: the parties agree no duration of enjoyment, an essential element of a letting. Own resources recoverable only from the 1994 budgetary year, by analogy with the four year correction rule. Confirms that toll charges for road and bridge access are taxable supplies unless made by a body governed by public law under a special legal regime, so concession structures matter.

C-247/95 Finanzamt Augsburg-Stadt v Marktgemeinde Welden

Judgment · 6 February 1997 · Germany

Public bodies letting property and the option to tax

Member States may treat activities listed in Article 13 as carried out by bodies governed by public law as public authorities, even where performed in the same manner as by a private trader. The fourth subparagraph draws no distinction between those exempt activities. The Court noted that letting under the same legal conditions as private traders is not itself an activity as a public authority under the first subparagraph, and that the national court must, where relevant, check the distortion of competition test in the second subparagraph. Confirms that public bodies letting immovable property can be kept outside the VAT system by national law, with the consequent loss of input tax recovery on construction, even where they compete with commercial landlords. Relevant to municipalities and other public bodies developing let property.

C-202/90 Ayuntamiento de Sevilla

Judgment · 25 July 1991 · Spain

Independence of tax collectors engaged by a local authority

The activity is carried out independently. There is no employer and employee relationship where the collectors organise their own staff and equipment, bear the economic risk (profit depends on collections less their own costs) and carry contractual liability and liability to third parties outside their public authority role. Direction and disciplinary control are not decisive. Article 4(5) does not apply where a public authority does not exercise the activity directly but entrusts it to an independent third party. Confirms that outsourcing a public law function does not carry the public body exclusion across to the contractor. Relevant to concession holders, collection agents, bailiffs, licensing and enforcement contractors and their public sector clients, who bear the VAT cost where they cannot deduct.

C-231/87 Ufficio distrettuale delle imposte dirette di Fiorenzuola d'Arda and Others v Comune di Carpaneto Piacentino and Others

Judgment · 17 October 1989 · Italy

Bodies governed by public law acting as public authorities

Activities are pursued as public authorities where carried out under the special legal regime applicable to the body. Where it acts under the same legal conditions as private traders, it is a taxable person. Member States must achieve the result but may choose the legislative technique, and need not reproduce the distortion of competition or negligible scale criteria literally or set quantitative limits. A public body may rely directly on Article 4(5) for non-Annex D activities carried out as a public authority where non-taxation causes no significant distortion of competition. The foundational test for public bodies. Relevant to local authorities, water undertakings, cemetery and burial services, land disposals and concession arrangements, and to advisers auditing municipal VAT positions.

Related topics

Economic activity · Supply of services · Exemptions · Taxable person · Treatment as a non-taxable person · Hospital and medical care · Welfare and social security work · Other categories of taxable persons · Supply of goods · Fiscal neutrality