VATcodexEU VAT case law · Court of Justice and General Court

Exemptions EU VAT case law

96 cases of the Court of Justice and the General Court of the European Union on this point of VAT law, from 1990 to 2026.

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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-184/25 Veronsaajien oikeudenvalvontayksikkö (Exemptions – management of credit by the person granting it)

Judgment · 17 June 2026

Credit management by the original lender after the loans have been sold

The General Court answers all three questions in the negative. The Article 135(1)(b) exemption is confined to credit management within the subsisting credit relationship between the original lender and the borrower. Once the receivables are assigned, management performed for the assignee is a taxable supply, even though physically carried out by the originator. Article 135(1)(c) covers only assumption of security and the lender's management of credit guarantees, not management of the loans themselves, and Article 135(1)(d) requires a transfer of ownership of funds or its essential functions, absent here. Directly relevant to banks and specialist lenders using covered-bond or securitisation structures where originated loans are sold to a group SPV or funding vehicle while servicing is retained.

T-221/25 TUI Belgium

Judgment · 25 March 2026 · Belgium

Standstill clause and the taxation of travel agents' services for travel outside the EU

No express derogating provision is required. Member States may choose the legislative technique they consider appropriate, subject to legal certainty requiring clarity and precision as to the situations covered. Legislation which merely ceases to exempt, so that taxation follows implicitly, is an exercise of the standstill option. Removing an express derogation that had become redundant does not, of itself, make the new regime non-identical or based on a different logic, since the outcome and procedures are unchanged. The referring court must verify this. Tour operators and travel agents in Member States relying on Article 370 and Annex X, Part A, point 4 cannot found repayment claims on the mere absence of an express statutory derogation from the Article 309 exemption.

C-472/24 Žaidimų valiuta

Judgment · 5 March 2026 · Lithuania

VAT treatment of in-game virtual currency trading

The exemption does not apply. A non-traditional currency qualifies only if accepted by the parties as an alternative means of payment and having no purpose other than as a means of payment, and in-game gold usable only inside the game fails both tests. Nor is it a voucher. The gold is itself the consumable electronic service supplied, not an instrument procuring a later service to be determined. VAT is therefore due on the whole consideration under Article 73, subject to the national court's verifications. Traders, marketplaces and platforms dealing in in-game currencies, skins and similar items must account for VAT on gross sale proceeds, not margin, and cannot rely on Hedqvist.

C-125/24 Palmstråle

Judgment · 12 June 2025 · Sweden

Reimportation exemption and breach of customs formalities

Failure to comply with formal obligations, presentation to customs and declaration for release for free circulation, does not preclude the exemption in Article 143(1)(e) for goods reimported in the state in which they were exported. Article 86(6) extends the returned goods relief to customs debts arising under Article 79, and would otherwise be deprived of effect. The qualification is that the exemption is lost where the failure constitutes an attempt at deception, and the national court must verify good faith and mere negligence. Assessments of import VAT founded purely on missed customs formalities on reimportation are open to challenge where the substantive conditions of Article 203 UCC are satisfied and there is no attempt at deception. Relevant to owners and handlers of goods temporarily taken outside the European Union, notably horses, artworks, exhibition goods, tools and equipment, and to their customs agents.

C-741/22 Casino de Spa and Others

Judgment · 12 September 2024 · Belgium

VAT exemption for online lotteries but not other online gambling

Differentiated treatment is permissible provided objective differences (chance alone determining winners, the waiting period, stakes and odds, cultural factors) considerably influence the average consumer's choice. The identity, legal form, licence category, regulatory regime and legislative objectives of providers are irrelevant. National courts must disapply provisions incompatible with Article 135(1)(i), a constitutional court's maintenance of effects being irrelevant. Tax wrongly levied is refundable unless refund unjustly enriches the taxable person. No damages equivalent to the VAT paid on unlawful State aid grounds. Relevant to gambling operators in Member States that split the exemption by game type.

C-73/23 Chaudfontaine Loisirs

Judgment · 12 September 2024 · Belgium

VAT exemption for online gambling and the limits of national discretion

Differentiating between online non-lottery gambling and lotteries or offline gambling is compatible with Article 135(1)(i) and neutrality, provided the objective differences are liable to have a considerable influence on the average consumer's choice. That is for the national court to verify. Article 135(1)(i) has direct effect, so a constitutional court's decision to maintain the effects of annulled provisions is irrelevant and they must be disapplied. Refund of VAT levied in breach is due, unless it would unjustly enrich the taxable person. Operators of online casino and betting products in Member States that tax electronic gambling while exempting lotteries and land based play now have a harder neutrality argument. Relevant to gambling advisers and to anyone litigating retrospective effects of annulled tax legislation.

C-639/22 Inspecteur van de Belastingdienst Utrecht

Judgment · 5 September 2024 · Netherlands

Investment risk and the fund management exemption for defined benefit pension funds

Members bear the investment risk only where the amount of pension entitlements and benefits depends primarily on investment performance. Benefits largely predefined by salary and years of service do not qualify. Years of accrual and interruption of accrual are irrelevant. Individual or collective bearing of risk, bankruptcy exposure and a temporary employer guarantee are relevant but not decisive. Neutrality also requires comparison with other non-UCITS funds the Member State treats as special investment funds. The comparability test is narrowed for defined benefit schemes.

C-461/21 Cartrans Preda

Judgment · 7 September 2023 · Romania

Proving the exemption for transport connected with importation

Recording the import, or the existence of an MRN, does not of itself and systematically mean the transport costs are in the import taxable amount. That must be verified. But the exemption cannot be automatically refused for want of the specific national documents where other evidence, whose authenticity is not in doubt, establishes the two substantive conditions. VAT recovery abroad is a supply of services. Withholding tax on non-residents restricts Article 56 TFEU, justifiable only by effective tax collection, and denying deduction of business expenses is precluded absent justification. Hauliers and freight forwarders invoicing import transport exempt must still positively evidence that their fee entered the import taxable amount.

C-42/22 Generali Seguros

Judgment · 9 March 2023 · Portugal

Sale of salvage by an insurer, no insurance exemption

No on all three points. The resales rest on contracts separate from, and separable from, the insurance policies, are made to persons other than the insured, involve no coverage of risk and raise no difficulty in determining the taxable amount. The salvage value is the residual value of the vehicle, not part of the compensation, so there is no single indivisible supply. Being a supply of goods, it cannot be a broker's or agent's related service. Goods bought merely to be resold unaltered are not "used" for the exempt insurance activity, and neutrality cannot widen an exemption. Where an insurer recovers and resells salvage, those sales are taxable supplies of goods whatever the domestic practice, and the salvage price cannot be treated as embedded in the claims settlement.

C-239/22 État belge and Promo 54

Judgment · 9 March 2023 · Belgium

Converted buildings and the first occupation test where no national implementing rules exist

The Court held that the exemption applies to a building first occupied before conversion even where the Member State has not adopted such detailed rules. But the absence of binding national rules has no direct effect. Liability follows from the added value generated and from the Court's own definition, so where a building has undergone substantial modifications intended to change its use or alter considerably the conditions of its occupation, an interpretation of national law consistent with the Directive leads to refusal of the exemption. Developers and their advisers cannot rely on a Member State's failure to legislate quantitative or other conversion thresholds to secure exemption on the sale of heavily renovated property.

C-247/21 Luxury Trust Automobil

Judgment · 8 December 2022 · Austria

Invoice wording as a condition of the triangulation simplification

No valid designation: in a triangular transaction the words "Reverse charge" under Article 226(11a) cannot be replaced by another form of wording, however informative. Nor can the omission be cured retrospectively. Adding the reference later is the first issue of the required invoice and has no retroactive effect, because designation of the customer as liable is a substantive condition of Article 42(a), not a formality. The Article 219a question therefore did not need answering. In any event these requirements cannot vary between Member States. Anyone using the Article 141 simplification must put "Reverse charge" on the invoice at the outset.

C-250/21 O. Fundusz Inwestycyjny Zamknięty reprezentowany przez O

Judgment · 6 October 2022 · Poland

Sub-participation agreements as the granting of credit

The Court held that the arrangement is a supply for consideration and falls within the concept of granting of credit in Article 135(1)(b). The only essential features are the provision of capital and remuneration, whatever form the remuneration takes. That the receivables remain in the originator's assets, that the source of repayment is identified, that no guarantees are given and that there is no recourse against the originator do not alter that classification, credit risk being inherent in any grant of credit. Sub-participation and similar synthetic funding structures in securitisation should be treated as exempt financial services rather than standard-rated, which removes an output tax cost for originators but restricts input tax recovery for sub-participants. Relevant to securitisation funds, banks, non-bank lenders and their advisers, and to anyone structuring non-recourse funding against a defined pool of receivables.

C-598/20 Pilsētas zemes dienests

Order · 1 December 2021 · Latvia

Compulsory ground leases outside the exemption for the letting of immovable property

Ruling by reasoned order, the Court held that those provisions do not preclude such legislation. Article 135(2) allows Member States to apply further exclusions to the scope of the exemption in Article 135(1)(l), and the Court has consistently read that as conferring a broad discretion, exercisable by a general rule. Latvia had laid down precisely such a general rule, so the exclusion was within the discretion the directive confers. There was no need to answer the second question. A useful reminder that the letting exemption is not a floor.

C-695/19 Rádio Popular

Judgment · 8 July 2021 · Portugal

Warranty extension commissions in the deductible proportion

Subject to national verification, the retailer is in direct contact with both insurer and insured and performs the essential functions of an insurance agent, so the commissions are exempt under Article 135(1)(a). Article 174(2) does not refer to point (a), and Article 135(1) clearly separates insurance from financial transactions. An insurance transaction therefore cannot be an incidental financial transaction, whether or not it is incidental. Fiscal neutrality cannot widen an exemption or derogation absent clear wording. Retailers, motor dealers and other suppliers earning insurance commissions on extended warranties, payment protection or similar cover must include that exempt turnover in the denominator of their partial exemption fraction.

C-58/20 K and DBKAG

Judgment · 17 June 2021 · Austria

Outsourced services and the fund management exemption

Both may be exempt where the service is intrinsically connected to the management of special investment funds and supplied exclusively for that purpose, even if not outsourced in its entirety. Retention by the manager of the filing obligation, ultimate responsibility, or of the IT environment and data inputs is not in itself decisive. Software designed for investments generally, usable for other funds, is not specific and so is not exempt. Application left to the national court. Fund administrators, tax reporting providers and fintech licensors supplying management companies of special investment funds can no longer be refused exemption merely because the manager performs part of the process, files the return, or hosts the software.

C-846/19 Administration de l'Enregistrement, des Domaines et de la TVA

Judgment · 15 April 2021 · Luxembourg

Court-appointed guardianship services by a lawyer, economic activity and the welfare exemption

Such activity is economic where supplied for consideration, income is continuing and the overall remuneration is set on criteria intended to cover the supplier's operating costs. Lump sums, judicial appointment and third-party (State) payment are irrelevant. Protection of such adults in civil matters is closely linked to welfare work, but general legal, financial or advisory services are not. Lawyer status is not an a priori bar to recognition as devoted to social wellbeing. A court must grant it only if the Member State exceeded its discretion. Legitimate expectations do not bar assessment. Fees are treated as VAT-inclusive. Relevant to lawyers, social workers, associations and other professionals acting as court-appointed guardians, curators or deputies, and to their advisers.

C-907/19 Q-GmbH (Special risk insurance)

Judgment · 25 March 2021 · Germany

Licensing an insurance product to an insurer and the insurance exemption

The exemption does not apply. Granting a licence to use an insurance product is neither an insurance transaction (no contractual link with the insured, no risk borne) nor a service performed by an insurance broker or agent, as the licensor is not linked to the insured and the activity does not cover the essential aspects of an agent's work. If that licence is the principal supply, the whole single supply is taxable. Whether a single supply exists, however, is for the national court. The Court doubted it. Insurance product designers, MGAs and technology providers licensing policy wordings or platforms to insurers cannot shelter the licence fee behind an accessory mediation role.

C-581/19 Frenetikexito

Judgment · 4 March 2021 · Portugal

Nutrition advice at a gym, single supply and the medical care exemption

Subject to the national court's verification, nutrition monitoring supplied by a certified professional in sports facilities is a distinct and independent supply, not ancillary. It has its own purpose (health and aesthetic, not sporting) and represented 40% of the consideration. It is not covered by Article 132(1)(c) because, absent any indication of prevention, diagnosis, treatment or restoration of health, it lacks a therapeutic purpose. The second question needed no answer. Where a gym, health club or wellness operator offers nutrition, dietary or coaching add-ons, those elements are taxed separately rather than swept into the treatment of the membership, and exemption does not follow merely because a qualified nutritionist or other regulated professional delivers them. Relevant to advisers pricing bundled packages and reviewing exemption claims by paramedical practitioners.

C-801/19 Franck

Judgment · 17 December 2020 · Croatia

Exempt credit granted by a non-financial trader through bills of exchange

The Court held the exemptions in Article 135(1)(b) and (d) apply. Making funds obtained from a factoring company available to another taxable person for remuneration, following transfer of a bill of exchange issued by that person and with a guarantee of repayment at maturity, is exempt. The provision of funds is the principal supply. The rest is ancillary. Non-financial status, the contractual labels and repayment to the factor rather than the lender are irrelevant, subject to national court verification. Confirms that industrial and retail groups providing intra-group or third party finance can rely on the credit exemption, and that the 135(1)(b) and (d) exemptions do not depend on regulated status or on funds being repaid to the provider.

C-657/19 Finanzamt D

Judgment · 8 October 2020 · Germany

Social welfare exemption for subcontracted care assessment reports

The Court held that such reports are closely linked to welfare and social security work provided they are essential to the proper implementation of transactions in that sector. The exemption does not depend on the services being supplied directly to the person reliant on care. However, Article 132(1)(g) does not preclude refusing recognition as a body devoted to social wellbeing where the expert is only a subcontractor of a recognised body, costs are borne indirectly on a flat-rate basis, and the option of contracting directly with the fund was not used.

C-215/19 Veronsaajien oikeudenvalvontayksikkö (Computing centre services)

Judgment · 2 July 2020 · Finland

VAT treatment of colocation centre services

Such services are neither exempt letting nor services connected with immovable property, subject to verification by the national court. The supplier does not passively make space available with a right to occupy it as owner, and the customers cannot control or restrict access to the relevant part of the building, so there is no right of exclusive use. The cabinets themselves are not immovable property. They are not an integral part of the building and, being merely bolted down and removable, are not permanently installed. Data centre, hosting and colocation providers can normally treat these supplies as taxable under the general B2B rule in Article 44, accounting at the customer's place of establishment rather than registering where the servers sit. Relevant to telecoms and IT operators, and to advisers reviewing cross-border hosting contracts and access arrangements.

C-231/19 Blackrock Investment Management (UK)

Judgment · 2 July 2020 · United Kingdom

Fund management exemption and a single supply used for mixed fund portfolios

A single supply of management services provided by a third party's software platform to a manager of both SIFs and other funds falls outside Article 135(1)(g). A single supply takes one tax treatment, and the exemption is defined by the nature of the service, not its destination or recipient, so no apportionment by use and no test based on which funds predominate. A platform usable equally for SIFs and other funds is not specific to SIF management. Fiscal neutrality cannot widen the exemption. Managers buying outsourced platform or administration services covering mixed portfolios cannot recover reverse charge VAT by apportioning a single supply between SIFs and other funds, whichever type predominates.

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-48/19 X (VAT exemption for telephone consultations)

Judgment · 5 March 2020 · Germany

Telephone health advice and the medical care exemption

Telephone advice can be exempt provided it has a therapeutic purpose. Place of supply of the service is irrelevant, and the absence of a prescription or follow-up treatment is not decisive. Consultations explaining diagnoses and therapies or suggesting treatment changes may qualify. Purely general information about diseases and therapies, and administrative information such as doctors' contact details, do not. Telephone delivery does not of itself require extra qualifications for nurses and medical assistants, provided quality is equivalent to other providers using the same channel. Relevant to telehealth providers, nurse-led triage and advice lines, disease management and patient support programmes, and their insurer or public health fund customers.

C-400/18 Infohos

Judgment · 20 November 2019 · Belgium

Cost sharing groups supplying non-members as well as members

The exemption is not conditional on the group supplying services exclusively to its members. Supplies to members which meet the conditions of Article 13A(1)(f) remain exempt even where the group also serves non-members. Those supplies to non-members are simply taxable under Article 2. The distortion of competition proviso and the anti-abuse power in the introductory words do not allow a general, irrebuttable presumption limiting the exemption's scope. Cost sharing groups may operate as hybrid taxable persons.

C-692/17 Paulo Nascimento Consulting

Judgment · 17 October 2019 · Portugal

Assignment of a position in enforcement proceedings and the credit exemption

The Court held the transaction taxable. An occasional transaction in direct extension of the taxable person's main activity is carried out as a taxable person. It is a single indivisible supply, either a supply of goods (if the taxable person could already dispose of the awarded property as owner, a matter for the national court) or a supply of services assigning intangible property. Neither Article 135(1)(b) nor Article 135(1)(d) applies. There is no capital made available remunerated by interest, and the transaction does not concern debts. Confirms that one-off disposals arising out of a business's litigation, including sales of enforcement positions and rights over attached property, are within scope where they extend the taxable person's activity. Relevant to property agents, distressed debt purchasers and insolvency or enforcement practitioners.

C-42/18 Cardpoint

Judgment · 3 October 2019 · Germany

VAT treatment of cash point operation services

The services supplied to the bank are not exempt under Article 135(1)(d). The functional test is whether the service causes the actual or potential transfer of ownership of the funds, or performs the specific, essential functions of such a transfer. The supplier neither authorised the withdrawals nor debited any account, and dispensing the notes transferred no title from it. The issuing bank did that. Being essential to an exempt payment transaction is not enough, and the consideration was readily identifiable. Outsourced ATM operation, cash replenishment, hardware and software provision and transaction reporting are taxable, and the physical handling of cash does not distinguish such services from the technical and administrative assistance denied exemption in Bookit.

C-700/17 Peters

Judgment · 18 September 2019 · Germany

Medical care exemption without a doctor and patient relationship

Care of this kind can fall within Article 132(1)(c) where it does not satisfy all the conditions of Article 132(1)(b): the latter does not limit the scope of the former, which covers services supplied outside a hospital environment. Article 132(1)(c) imposes only two conditions, provision of medical care and exercise of a medical or paramedical profession as defined by the Member State. No confidential relationship with the patient is required. Earlier references to such a relationship merely illustrated the place of supply distinction. Laboratory physicians, clinical chemists and other diagnostic specialists working under contract for laboratories or hospital operators can rely on Article 132(1)(c) even though they never meet the patient. Relevant to laboratory groups, outsourced diagnostics and German assessments on this basis.

C-597/17 Belgisch Syndicaat van Chiropraxie and Others

Judgment · 27 June 2019 · Belgium

Medical exemption for unregulated professions and reduced rates for aesthetic treatments

The exemption is not restricted to professions regulated by national law. Member States define the qualifying professions but must ensure adequate quality of care and respect fiscal neutrality, and other means of verifying qualifications may exist. Member States may apply the reduced rate selectively within Annex III, and therapeutic and purely aesthetic uses are not similar supplies, so the differentiation is permissible. The national court may not maintain the effects of the annulled provisions, whether for legal certainty or to avoid reverting to an earlier non-compliant regime. Providers of therapeutic care outside regulated professions, chiropractors, osteopaths and comparable practitioners, can rely on Article 132(1)(c) where their qualifications and quality of care are verifiable and their services compete with exempt care.

C-278/18 Sequeira Mesquita

Judgment · 28 February 2019 · Portugal

Letting exemption applied to transfer of the use of vineyards

The exemption applies. Passivity is judged by the nature of the transaction, not by how the tenant uses the property, so commercial exploitation by the transferee does not defeat it. The short and renewable term is not decisive. Restrictions on the transferee's rights (no replanting with another crop) do not matter, and any accompanying intangible rights are ancillary to a single supply of letting. Vineyards are not equipment or machinery, so that exclusion does not bite. The position would differ if the owner also supplied supervision, management, maintenance or other facilities. Agricultural landowners and their advisers can treat rent from letting planted land, including vineyards and comparable perennial crops, as exempt, and Member States cannot tax it merely because the tenant runs a commercial farming business or because permits, goodwill or a trading name travel with the land.

C-495/17 Cartrans Spedition

Judgment · 8 November 2018 · Romania

Proving export for the exemption of transport services, TIR carnet versus customs declaration

Making the exemption conditional on a customs export declaration is precluded. Actual export remains a substantive condition, but the export declaration is a formality that generally falls on the exporter, not the carrier or intermediary. Authorities must assess all available information and decide whether export can be inferred with a sufficiently high degree of probability. A certified TIR carnet must be duly taken into account unless there are specific reasons to doubt its authenticity or reliability. Hauliers, freight forwarders and transport intermediaries facing assessments for want of an export declaration now have a clear basis to rely on TIR carnets, CMR notes and other transport documentation.

C-5/17 DPAS

Judgment · 25 July 2018 · United Kingdom

Direct debit administration is not an exempt payment transaction

The exemption does not apply. Only services which themselves effect the legal and financial changes characteristic of a transfer of money qualify. Instructing banks to execute direct debits is administrative and merely a preparatory step, comparable to the card handling in Bookit. That the service is essential to the payments being made does not make it exempt. AXA UK, which addressed only debt collection, does not widen the concept. The debt collection question was left unanswered. Relevant to payment plan administrators, membership and subscription scheme operators, bureaux and outsourced billing providers who collect by direct debit and remit onward.

C-580/16 Firma Hans Bühler

Judgment · 19 April 2018 · Austria

Triangulation simplification, identification in the dispatch Member State and late recapitulative statements

Article 141(c) is met because only the VAT number under which the intermediary made the acquisition matters, so establishment and identification in the dispatch Member State do not block the simplification. Late filing of the recapitulative statement is a formal failure and cannot alone trigger Article 41 where the substantive condition in Article 42(a) is met, nor need the number still be valid when the statement is filed. Refusal remains possible where the taxable person knowingly participated in evasion or the breach prevents proof of the substantive conditions. Intermediaries in ABC chains can rely on triangulation even where they hold a VAT number in the dispatch Member State, provided they use their other number for the acquisition.

C-615/16 Kerr

Order · 21 November 2017 · Portugal

When an intermediary's activity counts as negotiation of securities transactions

Ruling by reasoned order, the Court held that the concept of negotiation is capable of covering such an activity, provided that it is the activity of an intermediary remunerated for supplying a service to one of the parties to a contract relating to financial transactions in securities, that the service consists in doing what is necessary for the seller and the buyer to sign that contract, that the intermediary does not itself sign the contract, and that in any event it has no interest of its own in its content. Whether those conditions are met is for the referring court to verify. The conditions restate CSC Financial Services and Volker Ludwig in a compact form, and they are the checklist to run through for any introducer or broker.

C-273/16 Federal Express Europe

Judgment · 4 October 2017 · Italy

Exemption of transport services ancillary to exempt imports

Such national legislation is precluded. Where transport costs are included in the taxable amount under Article 86(1)(b), the ancillary supply follows the tax treatment of the import and is exempt under Article 144, even if no VAT was in fact levied at the customs stage. The exemption serves technical simplification, not the avoidance of double taxation. The extra Italian condition would deprive it of effect for consignments of negligible value or of a non-commercial character. Confirms that a carrier or express operator handling a low-value or non-commercial consignment charges no VAT on transport already included in the import taxable amount, whatever the import VAT position.

C-699/15 Brockenhurst College

Judgment · 4 May 2017 · United Kingdom

Training restaurant and student performances as supplies closely related to education

Such activities may be exempt as closely related to the principal supply of education, provided they are supplied by a qualifying body, are essential to the students' education (without them the education would not be of equivalent value), and their basic purpose is not to obtain additional income through transactions in direct competition with commercial enterprises liable for VAT. Here the limited public, booking thresholds and below-cost pricing pointed away from competition. The national court must verify these conditions. Confirms that the "closely related" exemption is not confined to supplies consumed by the students themselves.

C-33/16 A

Judgment · 4 May 2017 · Finland

Exemption for cargo handling supplied through subcontractors

Cargo handling meets the direct needs of the cargo, and of the vessel, since carrying cargo is a usual form of operating a high seas vessel. The exemption is not limited to the last link in the chain. It also covers a subcontractor's supply re-invoiced to a forwarder or transporter, and supplies to the cargo holder. Elmeka's end of chain restriction is confined to services capable of diversion (fuel transport), where monitoring would be needed. Here the qualifying use is fixed by the type of vessel when the service is agreed. Port operators, stevedores, terminals, freight forwarders and their subcontractors can apply the Article 148(d) exemption at every level of the handling chain, so long as the vessel qualifies under Article 148(a).

C-607/14 Bookit

Judgment · 26 May 2016 · United Kingdom

Card handling fees and the payments exemption

The exemption does not apply. The service is technical and administrative assistance. An exchange of information between a trader and its merchant acquirer to obtain payment. The provider neither debits nor credits accounts, nor instructs any debit, has no control over the authorisation code, and assumes no liability for the change in the legal and financial situation. Being essential to the payment is not enough. Whether the code comes directly or via the acquirer is irrelevant. The referring court must still decide whether the fee is a single supply with the ticket sale. Merchants and their agents charging separate card handling or booking fees, in ticketing, travel, events and online retail, cannot treat those fees as exempt payment handling merely because their file transmission triggers settlement.

C-130/15 National Exhibition Centre

Judgment · 26 May 2016 · United Kingdom

Card handling booking fees and the payments exemption

The exemption does not apply. The provider neither debits nor credits accounts, nor orders any debit or credit, nor assumes responsibility for the legal and financial changes. It merely applies technical and administrative means, exchanging information with its merchant acquirer to obtain payment. Indispensability to the payment, automation, and whether the authorisation code comes directly or via the acquirer are all irrelevant. The Court also questioned the referring court's premiss that the card handling is a separate supply rather than ancillary to the ticket sale, leaving that to the national court. Booking and card handling fees charged by merchants, ticket agents, venues and other retailers on card payments are taxable, and any historic repayment claims built on the SDC functional test fail where the trader does not itself effect the entries or bear responsibility for the transfer.

C-555/15 Gabarel

Order · 14 April 2016 · Portugal

Osteopathy provided by a physiotherapist may fall within the medical care exemption

The Court holds that both must be exempt if excluding osteopathy from the paramedical professions for exemption purposes exceeds the limits of the discretion which that provision confers on Member States. It is for the national court to make that assessment, having regard in particular to the principle of fiscal neutrality, which precludes treating similar supplies of medical care differently according to the professional qualification of the provider. The order is the reference point for complementary and alternative therapies.

C-22/15 Commission v Netherlands

Judgment · 25 February 2016 · Netherlands

Dutch exemption for berths and boat storage went beyond the sporting exemption

The Court upholds both complaints. Exempting the hiring of berths and storage sites for boating or leisure activities that cannot be equated with the practice of sport or physical education goes beyond Article 132(1)(m), and confining the exemption in genuine sporting cases to associations without employees is an unauthorised restriction. The Netherlands was ordered to pay the costs. The judgment cuts both ways, and that is what makes it useful.

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-595/13 Fiscale Eenheid X

Judgment · 9 December 2015 · Netherlands

Real estate funds as special investment funds and the limits of "management"

Such property investment companies may be special investment funds where investors pool capital, bear the risk and receive dividends and capital growth, but only if the Member State has subjected them to specific State supervision. The exemption is not confined to investments in transferable securities. However, "management" does not cover the actual management of the immovable property. That is inherent in any investment and not specific to collective investment, unlike selection, purchase and sale plus administration and accounting tasks.

C-526/13 Fast Bunkering Klaipėda

Judgment · 3 September 2015 · Lithuania

Bunkering exemption and supplies through intermediaries acting in their own name

In principle the exemption does not apply. It is confined to the final supply to the vessel operator who uses the goods, and evidence of ultimate use does not extend it (the aircraft case law under Article 148(f) is not transferable, there being no common registration mechanism for bunkers). However, it may apply where ownership passes to the intermediary no earlier than the moment the operator becomes entitled to dispose of the fuel as owner, that is, on loading into the tanks. That is for the national court to verify. For bunker suppliers and traders, documentary proof of ultimate maritime use does not zero rate a sale into a trading chain. Relevant to marine fuel supply, bunker broking and commodity trading structures across the EU.

C-584/13 Mapfre asistencia and Mapfre warranty

Judgment · 16 July 2015 · France

Extended warranties on second-hand cars as insurance transactions

Such a warranty constitutes an exempt insurance transaction. The provider undertakes, against a premium certain but limited, to relieve the purchaser of uncertain repair costs, and the requisite legal relationship exists whether the contract is concluded directly, through the dealer as intermediary or by assignment. How the provider prices or manages the risk is irrelevant. The warranty and the vehicle sale are in principle distinct and independent supplies. Both characterisations are left to the referring court on the facts. Relevant to motor retail, extended warranty and breakdown cover providers, and to administrators structuring cover as "after-sales service" outsourced by dealers.

C-114/14 Commission v Sweden

Judgment · 21 April 2015 · Sweden

Public postal services exemption in a fully liberalised market

The Grand Chamber upheld both complaints. "Public postal services" covers any operator, public or private, undertaking to provide all or part of the universal postal service within the meaning of Directive 97/67. What distinguishes such an operator is not the nature of its services but the special legal regime and specific obligations to which it is subject, so competition arguments and the absence of a monopoly do not displace the exemption. The stamps exemption follows from the clear wording of Article 135(1)(h).

C-144/13 VDP Dental Laboratory and Others

Judgment · 26 February 2015 · Netherlands

Exemption of dental prostheses on intra-Community acquisition and importation

No cherry-picking: a taxable person cannot both use a national exemption that conflicts with the Directive and deduct input tax. The choice is exemption without deduction or taxation with deduction. Articles 140(a) and (b) and 143(a) do exempt intra-Community acquisitions and final importations of dental prostheses, but only where supplied by dentists or dental technicians and where the Member State of destination has not taken the Article 370 derogation. The position in the Member State of origin is irrelevant. The reference point is always the destination Member State's treatment. Relevant to dental supply chains and to advisers handling non-conforming national exemptions generally.

C-55/14 Régie communale autonome du stade Luc Varenne

Judgment · 22 January 2015 · Belgium

Making a football stadium available, letting or taxable service

As a general rule, no. Such an arrangement is not a letting of immovable property. The characteristic supply is the provision of access to sporting facilities in a usable condition, supported by the owner's active role (permanent on-site caretaking) and the 80% weighting of the services. The Court left the fact finding to the national court, which must assess whether all the services are genuinely necessary for football use and whether the enjoyment is merely occasional and temporary. Relevant to stadium, arena and sports facility operators, municipalities and their autonomous corporations, and anyone structuring facility use agreements with clubs.

C-461/12 Granton Advertising

Judgment · 12 June 2014 · Netherlands

VAT treatment of discount cards

Neither of the two exemptions applies to the sale of such a card. The card gives no ownership right, no claim against the issuer, has no nominal value and cannot be exchanged for money or goods, so it is not comparable to the securities listed and its sale is not a financial transaction. Nor is it a payment instrument. It does not transfer money, unlike payments, transfers and cheques. Use of the card is a price discount excluded from the affiliated business's taxable amount under Article 11(A)(3)(b), not a payment. Issuers of discount and loyalty cards must account for VAT on the full consideration received from consumers, the taxable amount being simply the card price.

C-139/12 Caixa d’Estalvis i Pensions de Barcelona

Judgment · 20 March 2014 · Spain

Indirect tax on share acquisitions in property-rich companies

The Court held that the Sixth Directive does not preclude such national legislation. The capital transfers tax lacks the essential characteristics of VAT and so is not a turnover tax caught by Article 33(1), and concurrent taxation, including resulting double taxation, is permitted. The first question needed no answer, since the referring court had not shown whether Spain had used its options under Articles 5(3) and 13C(b). The Treaty question was inadmissible as the situation was purely internal.

C-366/12 Klinikum Dortmund

Judgment · 13 March 2014 · Germany

Exemption for drugs dispensed during outpatient care

Article 13A(1)(c) contains no reference to closely related activities, so that concept is irrelevant to it. Drugs and other goods are exempt under it only where strictly necessary at the time the care is given and physically and economically indissociable from it. Despite the therapeutic continuum, care from the doctors and drugs from the hospital pharmacy appear to be separate supplies. The national court must assess indissociability. Failing that, the dispensing is taxable. Fiscal neutrality cannot widen an exemption. Relevant to hospitals, hospital pharmacies and oncology day units where outpatient treatment is delivered by independently accredited or self-employed doctors within hospital premises.

C-464/12 ATP PensionService

Judgment · 13 March 2014 · Denmark

Occupational pension funds as special investment funds

Such pension funds may be special investment funds where they are funded by the beneficiaries, the assets are invested on a risk-spreading basis and the pension customers bear the investment risk. That is the decisive distinction from Wheels. Employer payment, collective agreements, payout form, income tax deductibility and an ancillary insurance element are irrelevant. "Management" covers opening accounts and crediting contributions, plus Annex II accounting and account information services. Those same crediting services, and anything ancillary or forming a single supply with them, are also exempt payment or transfer transactions. For third party pension administrators and their fund clients the ruling unsettles the treatment of contribution processing where the scheme is defined contribution and the members carry the investment risk.

C-495/12 Bridport and West Dorset Golf Club

Judgment · 19 December 2013 · United Kingdom

Sports exemption and green fees charged to non-members

Access to the course is closely linked to sport and, if supplied by a non-profit-making body, is exempt whether the player is a member or not. Article 134(b) does not exclude green fees. "Additional income" cannot be read so as to restrict the exemption by reference to the recipient's membership status, a criterion deliberately omitted from Article 132(1)(m). Article 133(d) does not permit a general measure of that kind, since it cannot eliminate competitive differences flowing from the exemption itself. Non-profit sports clubs charging visitors for access, golf, tennis, squash and similar, cannot be taxed on those charges merely because the payer is not a member.

C-319/12 MDDP

Judgment · 28 November 2013 · Poland

Exemption for commercial providers of education and the right to deduct

A profit-making aim does not itself bar exemption. Private bodies may qualify. But point (i) of Article 132(1) precludes a general exemption of all educational services irrespective of the provider's objects, which must be similar to those of public law bodies. A taxable person cannot both enjoy the exemption and deduct. It may, however, rely on the Directive to disapply the exemption, and then deduct, only where it could not objectively be regarded as having similar objects, a matter for the national court. Relevant to private training providers, language schools and vocational operators in Member States whose law exempts education by category rather than by provider status.

C-26/12 PPG Holdings

Judgment · 18 July 2013 · Netherlands

Employer's deduction of VAT on pension fund administration and asset management costs

The employer may deduct the VAT, provided a direct and immediate link is apparent from all the circumstances. Here the services were acquired solely for the purposes of the employer's taxable activity in discharging a statutory obligation, and the costs form part of its general costs, which the national court must verify. Denying deduction because of the legislative choice to separate employer and fund would breach neutrality. The exemption question did not need answering, having been covered by Wheels. Confirms that employers, not just the fund, can recover VAT on pension administration and asset management costs where they contract for and bear those costs and the costs sit in general overheads. Relevant to any employer operating a separate trustee or foundation pension vehicle, and to advisers reviewing historic assessments and contracting arrangements.

C-91/12 PFC Clinic

Judgment · 21 March 2013 · Sweden

Exemption for plastic surgery and cosmetic treatments

Such services are exempt only where intended to diagnose, treat or cure diseases or health disorders, including psychological ones, or to protect, maintain or restore health. Purely cosmetic interventions are not. The recipient's subjective view is not in itself decisive. The assessment must rest on medical findings by a qualified person, and the involvement of licensed medical professionals may influence that assessment. All other conditions of Article 132(1)(b) or (c), and Articles 131, 133 and 134, must also be satisfied. Clinics providing mixed cosmetic and reconstructive treatment cannot treat their output as uniformly exempt or uniformly taxable. Relevant to plastic surgery clinics, aesthetic medicine and dermatology providers, and their advisers, particularly where refund claims turn on the exempt or taxable split.

C-18/12 Žamberk

Judgment · 21 February 2013 · Czechia

Sports exemption for access to a municipal aquatic park

The Court answers both questions in the affirmative. The exemption is not confined to particular sports, levels of play, or organised or systematic participation, provided the activity is not engaged in purely for rest and amusement. Mixed-use access may be a single complex supply closely linked to sport where the predominant element, judged objectively from the typical consumer's viewpoint and from the park's design, is sporting rather than recreational. The intentions of individual visitors are irrelevant. Classification is for the national court. Relevant to municipalities, non-profit trusts and clubs operating leisure centres, lidos and mixed sport and leisure complexes, where a single all-inclusive ticket points to one composite supply.

C-224/11 BGŻ Leasing

Judgment · 17 January 2013 · Poland

Insurance re-invoiced by a lessor with the leasing service

Leasing and insurance of the leased asset are in principle distinct and independent supplies. Insurance is an end in itself for the lessee, and a contractual requirement to insure, or a termination clause covering unpaid premiums, does not make it ancillary. The national court must still verify the specific circumstances. Where the lessor insures the item and re-invoices the exact cost, that is an exempt insurance transaction. The reasoning does not apply if the lessee is charged more than the insurer charged the lessor. Lessors and other asset finance providers offering block cover to customers can treat the re-invoiced premium as exempt, and insurance costs of that kind do not fall into the taxable amount of the lease under Article 78. Relevant to leasing, equipment and vehicle finance, and to advisers reviewing composite supply analyses generally.

C-543/11 Woningstichting Maasdriel

Judgment · 17 January 2013 · Netherlands

When demolished land becomes building land

The exemption does not apply where an overall assessment of the circumstances prevailing at the time of supply, including the parties' intention if supported by objective evidence, shows the land was in fact intended to be built on. Completed demolition by the vendor, or its undertaking to demolish with a view to future construction, is part of that objective evidence. The national definition of building land must cover all unbuilt land intended to support a building. Application is for the national court. Member State definitions of building land cannot be narrowed by formal criteria such as a requirement for post-demolition groundworks or a granted permit.

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-532/11 Leichenich

Judgment · 15 November 2012 · Germany

Letting of a permanently moored houseboat as immovable property

The exemption applies. Where the houseboat is fixed by attachments not easily removable to the riverbank and bed, occupies a demarcated identifiable location and is used under the contract exclusively for the permanent operation of a restaurant-discotheque, it forms a functional and economic unit with the submerged and non-submerged ground. That is a single exempt supply, the landing stage being ancillary. Such a houseboat is not a vehicle. What matters is actual current function, not original use.

C-33/11 A Oy

Judgment · 19 July 2012 · Finland

Exemption for aircraft supplied to an owner who makes them available to an airline

International charter flights for undertakings and private persons fall within the wording. The exemption applies to a supply to an operator who is not itself a qualifying airline but acquires the aircraft for exclusive use by one. Ownership is immaterial, the sole criterion being use by an airline operating for reward chiefly on international routes. Passing the cost on to a shareholder using the aircraft privately does not alter that, but the national court must verify intended commercial use and may find an abusive practice. Confirms that aircraft leasing and ownership vehicles can buy exempt where the aircraft is destined for exclusive use by a qualifying international airline, so no VAT cash-flow advance arises at acquisition. Relevant to aircraft lessors, corporate aviation structures and their advisers.

C-160/11 Bawaria Motors

Judgment · 19 July 2012 · Poland

Margin scheme where the previous supplier had only partial input VAT deduction

The margin scheme is not available on such a resale. Article 314 lists exhaustively and must be construed narrowly. The exemption in Article 136(b) covers only goods on whose acquisition VAT was not deductible at all. A national restriction limiting the deductible amount is not non-deductibility. What the listed cases share is that the supplier bore the input tax in full. Resulting partial double taxation is for the national legislature to remedy, not a ground for a different reading. For motor dealers and other second-hand goods traders what decides the point is the previous owner's deduction position, not merely whether the incoming invoice is marked exempt.

C-326/11 J.J. Komen en Zonen Beheer Heerhugowaard

Judgment · 12 July 2012 · Netherlands

Supply of a building part-way through transformation into a new building

The exemption applies. Where, at the time of supply, the old building had undergone only partial demolition and was at least in part still used as such, with the construction work carried out entirely by the purchaser afterwards, there is no supply before first occupation within Article 4(3)(a). The parties' declared intention to create a new building counts only within an overall assessment supported by objective evidence, notably how far the vendor's work had advanced and the use of the property at that date. Relevant to property developers, investors and their advisers structuring sales of buildings destined for redevelopment, particularly in the Netherlands where VAT liability drives the transfer duty exemption.

C-259/11 DTZ Zadelhoff

Judgment · 5 July 2012 · Netherlands

Brokerage on share sales of property-owning companies

The exemption applies. Transactions designed to transfer, and which do transfer, shares are exempt share transactions even though in the final analysis they concern the immovable property held by those companies and its indirect transfer. The objective character of the transaction actually carried out governs, whatever the vendor's initial intention. The exclusion in the second indent is not applicable where the Member State has not exercised the Article 5(3)(c) option. Brokerage aimed at bringing the parties together, the broker having no interest of its own in the terms, is exempt "negotiation". Confirms that fee income of real estate brokers, corporate finance intermediaries and advisers on share deals in property-holding companies is exempt, with the input VAT consequences that follow, in Member States that have not enacted the Article 5(3)(c) equivalent (now Article 15(2) of the VAT Directive).

C-225/11 Able UK

Judgment · 26 April 2012 · United Kingdom

Scope of the NATO forces exemption

The exemption applies only cumulatively. The services must be supplied for staff of the other State's armed forces taking part in the common defence effort, or for the civilian staff accompanying them, and those forces must be stationed in or visiting the Member State where the supply takes place. The comma in some language versions is not decisive. The qualification governs the provision as a whole, and exemptions are construed strictly. Supplies to forces in their own Member State remain taxable. Suppliers of goods or services to foreign NATO forces cannot rely on the customer's status alone.

C-259/10 Rank Group

Judgment · 10 November 2011 · United Kingdom

Fiscal neutrality and the gambling exemption for slot machines and mechanised bingo

A difference in treatment of supplies identical or similar from the consumer's viewpoint, meeting the same needs, suffices. No separate proof of competition or distortion is needed. Licensing categories, regulatory regimes, legality, operator identity, venue and unharmonised taxes are irrelevant. For two slot machine types, comparability is judged from the average consumer's perspective, notably stakes, prizes and chances of winning. No repayment where the comparator exemption was merely an unlawful administrative practice. No due diligence defence. Operators of gaming machines and similar gambling products can challenge selective taxation without economic evidence of competition, and cannot be answered by pointing to different gambling licensing regimes. Relevant to gambling operators, betting shops and advisers handling historic overpayment claims.

C-350/10 Nordea Pankki Suomi

Judgment · 28 July 2011 · Finland

Electronic messaging services for financial institutions and the finance exemptions

Those services do not fall within either exemption. The services are supplied for consideration and are taxable. They merely transmit information and do not themselves effect any transfer of funds or securities, so they produce none of the legal and financial changes characterising an exempt transaction. That an element is essential, or the only one available on a market, is not enough. The supplier's contractual responsibility, however large in money terms, covered only secure and legible transmission, so it was technical and not specific and essential. Confirms that outsourced infrastructure supporting payments and securities settlement is taxable unless the provider assumes responsibility for the specific, essential elements of the financial transaction.

C-540/09 Skandinaviska Enskilda Banken

Judgment · 10 March 2011 · Sweden

VAT treatment of share issue underwriting guarantees

The Court held that such an underwriting guarantee is a supply for consideration within the Directive's scope and is exempt under Article 13B(d)(5) as a transaction in securities. Conclusion of the guarantee is of itself liable to create, alter or extinguish rights in ownership of shares, and that potential is sufficient. Whether the issue was ultimately fully subscribed is irrelevant. A distinction on that basis would breach fiscal neutrality. The other exemptions were not examined. The guarantee was treated as a stand-alone service in Sweden. Banks and other credit institutions providing underwriting or standby commitments on equity issues can treat the commission as exempt, with the corresponding restriction on input tax recovery.

C-116/10 Feltgen and Bacino Charter Company

Judgment · 22 December 2010 · Luxembourg

Exemption for the hiring of sea-going vessels to private users

The exemption does not apply. For a hiring of a sea-going vessel to be exempt, the lessee must use the vessel for an economic activity. Where it is used exclusively for leisure and not for financial gain, the conditions are not met. Charterers using a vessel strictly for private purposes are final consumers. The classification of the supply in national law is irrelevant, and Member States' implementing conditions cannot alter the subject-matter of the exemption. Relevant to yacht owning and charter structures, ship management companies and their advisers, particularly crewed charters marketed to private clients.

C-270/09 MacDonald Resorts

Judgment · 16 December 2010 · United Kingdom

Timeshare points schemes, when the supply occurs and where

The supply must be classified at the moment the customer converts his rights into an actual service, not when the Points Rights are bought: the elements needed for tax to become chargeable are not then known, so the prepayment rule does not apply. On conversion into hotel accommodation or temporary use of a property, the supply is connected with immovable property and taxable where the hotel or property is situated. Conversion into a right to occupy is a letting, but Member States may exclude it from exemption. Operators of points based holiday clubs, timeshare exchange businesses and resort groups must account for VAT by reference to each redemption, at the location of the property or hotel used, rather than at establishment on sale of the points entitlement.

C-276/09 Everything Everywhere

Judgment · 2 December 2010 · United Kingdom

Payment handling charges as ancillary to the principal supply

The charges are not consideration for a distinct and independent supply. Handling the payment is ancillary to the principal supply of telecommunications services. Enabling customers to choose a convenient payment method is not an aim in itself and offers nothing independent of the telephone service. Seeking and processing payment is intrinsic to any supply for consideration. Separate contractual pricing and separate invoicing are not decisive. The exemption questions therefore did not need to be answered. Confirms that payment handling fees charged by a supplier to its own customers follow the tax treatment of the main supply, whatever the payment channel.

C-175/09 Axa UK

Judgment · 28 October 2010 · United Kingdom

Payment collection services and the debt collection exclusion

The various acts formed a single indivisible supply whose economic purpose was to move the monthly sum from patient to dentist. In principle a transaction concerning payments, it nonetheless fell within the debt collection exclusion, which is construed broadly. The service was designed to obtain payment of debts and relieved creditors of work they would otherwise do. It was irrelevant that the debts were collected on their due date and that no coercive recovery measures were involved. Outsourced collection of recurring customer payments is taxable, whoever supplies it and whatever technology is used.

C-97/09 Schmelz

Judgment · 26 October 2010 · Austria

Small undertakings exemption limited to established persons

The exclusion does restrict the freedom to provide services, but it is justified and proportionate. Effective fiscal supervision is only feasible in the State of establishment, small undertakings are typically not VAT identified there, and existing administrative cooperation instruments yield no usable turnover data. The provisions are therefore valid under Article 49 EC. "Annual turnover" means the turnover generated in one year in the Member State in which the undertaking is established, not Union-wide turnover. Non-established persons with modest taxable activity in another Member State, notably individuals letting residential property abroad and small cross-border service providers, cannot claim the host State's small business exemption and must register and account for VAT there from the first euro, with input deduction as the only offset.

C-381/09 Curia

Order · 7 July 2010 · Italy

VAT treatment of unlawful lending at exorbitant rates

The Court held that exorbitant lending falls within the scope of the Sixth Directive notwithstanding its illegality under national criminal law. Article 13B(d)(1) must be interpreted as meaning that a Member State cannot impose VAT on that activity where the corresponding lawful activity, money lending at rates of interest that are not excessive, is itself exempt from VAT. Confirms that criminal illegality under domestic law does not, by itself, take a supply outside the VAT system, nor does it disapply an exemption where a lawful equivalent transaction exists and is exempt. Relevant to advisers handling assessments raised alongside criminal proceedings, and to lenders and informal finance providers facing VAT demands on interest.

C-262/08 CopyGene

Judgment · 10 June 2010 · Denmark

Private cord blood stem cell banking and the hospital care exemption

The services are not closely related to hospital or medical care where the hospital treatment to which they are only potentially linked has not been performed, commenced or even envisaged. There is no temporal condition as such, but a merely hypothetical future treatment is insufficient. Article 13A(1)(b) neither prevents nor requires national authorities to treat such a bank as duly recognised. Authorisation under Directive 2004/23 is not automatic recognition, and the discretion must respect fiscal neutrality. Autologous or allogeneic use is irrelevant. A private biobank or cord blood service in the EU is standard rated unless linked to identified treatment.

C-86/09 Future Health Technologies

Judgment · 10 June 2010 · United Kingdom

VAT treatment of umbilical cord blood collection and stem cell banking

Where the activities are intended only to ensure that a resource is available for medical treatment in the uncertain event that treatment becomes necessary, and not to diagnose, treat or cure disease, they fall outside both Article 132(1)(b) and Article 132(1)(c), whether taken together or separately. Cryopreservation of living body parts is not itself preventive care. The exception is that cord blood analysis genuinely intended to enable a medical diagnosis, rather than merely testing cell viability, can qualify. Following CopyGene, the activities are not "closely related" to hospital care that has not been performed, commenced or envisaged. Private cord blood and stem cell banks, and tissue biobanks generally, must treat collection, processing and storage packages sold for speculative future use as taxable, notwithstanding accreditation as a health establishment or supervision by registered health professionals.

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-473/08 Eulitz

Judgment · 28 January 2010 · Germany

Tuition given privately by teachers, courses run by a third party institute

The services can constitute tuition covering school or university education. No distinction is drawn between initial schooling and later professional training built on an existing degree. Activities other than teaching qualify only where carried out essentially within the transmission of knowledge and skills between teacher and pupils, a matter for the national court. However, tuition is not given "privately" where the teacher acts within courses organised by a third party which runs the training establishment. Independence for VAT taxable person purposes is not enough. Freelance trainers, examiners and course leaders supplying their services to colleges, institutes and professional training providers cannot rely on the private tuition exemption, however self-employed they are under national law.

C-461/08 Don Bosco Onroerend Goed

Judgment · 19 November 2009 · Netherlands

Sale of land with a partly demolished building, single supply of undeveloped land

Where the seller has taken on the demolition and it has begun before transfer, the supply of the land and the demolition form a single indivisible transaction whose object is undeveloped land, not the existing building and its site. The exemption in Article 13B(g) therefore does not apply, whatever stage the demolition has reached. It remains for the national court to decide whether the land is "building land" as defined by the Member State. Property developers and vendors of redevelopment sites must look at what the seller actually undertakes, not merely at whether bricks still stand on transfer date.

C-29/08 SKF

Judgment · 29 October 2009 · Sweden

Deduction on costs of selling shares in a subsidiary

The disposal is an economic activity within scope, unless it can be equated to a transfer of a going concern and the Member State has exercised the Article 19 option, in which case it falls outside VAT. Where in scope, it is exempt under Article 135(1)(f). Input VAT on the related services is deductible only if the costs have a direct and immediate link with the taxable person's economic activity as a whole rather than with the exempt sale itself. The national court must decide whether the costs are built into the share price. Staged disposals are treated identically. Holding companies that intervene in the management of subsidiaries can no longer be told that exemption of the share sale automatically blocks deduction.

C-242/08 Swiss Re Germany Holding

Judgment · 22 October 2009 · Germany

Transfer of a portfolio of life reinsurance contracts

The transfer is a supply of services, not of goods, since reinsurance contracts are not tangible property. It falls outside Article 9(2)(e), fifth indent, and Article 13B(a). It sits between the transferor's and the transferee's own reinsurance relationships and extinguishes the former. It is not financial in nature, so Article 13B(d)(2) and (3) do not apply, and it is a single supply that cannot be artificially split. The negative value attributed to 18 contracts within a single global price is irrelevant. Article 13B(c) does not apply. Insurers and reinsurers restructuring by portfolio transfer, and their advisers, cannot assume the exemption for insurance and reinsurance transactions follows the underlying contracts. Relevant to run off transactions, Part VII style transfers and financial services exemption analysis generally.

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-407/07 Stichting Centraal Begeleidingsorgaan voor de Intercollegiale Toetsing

Judgment · 11 December 2008 · Netherlands

Cost sharing group services supplied to only some members

The Court held that the exemption applies even where the services are supplied to only one or several members, provided the other conditions in the provision are met: direct necessity for the members' exempt activities, exact reimbursement of the member's share of the jointly incurred expenses, and no distortion of competition. Whether those conditions are satisfied is for the national court. Strict construction cannot deprive the exemption of practical effect. Relevant to cost sharing groups in healthcare, insurance and other exempt sectors, and to their advisers.

C-253/07 Canterbury Hockey Club and Canterbury Ladies Hockey Club

Judgment · 16 October 2008 · United Kingdom

Sporting exemption, services supplied to clubs rather than individual players

The exemption can cover services supplied to legal persons and unincorporated associations. The identity and legal form of the formal recipient are irrelevant. But the supplier must be non-profit-making, the services must be closely linked to and essential for sport, and the true beneficiaries must be persons taking part in sport. Services concerned with the club and its running, for instance marketing and sponsorship assistance, do not qualify. Member States may not limit the exemption by reference to the class of recipient. Governing bodies, leagues and federations invoicing affiliation or membership fees to clubs can no longer be denied exemption purely because the club, not the player, is the customer. Relevant to advisers to non-profit sports sectors and to any body reviewing its fee structures and apportionment.

C-231/07 Tiercé Ladbroke and Derby

Order · 14 May 2008 · Belgium

Betting agents and the exemption for transactions concerning payments

Ruling by order, the Court held that the exemption does not extend to those services. Although money passes through the agent's hands in both directions, the activity taken as a whole is the acceptance and administration of bets on behalf of the bookmaker, not a transaction concerning deposit accounts or payments within the meaning of the financial exemption, which must be interpreted strictly. A useful boundary marker for Article 135(1)(d) of the VAT Directive.

C-186/07 Club Náutico de Gran Canaria

Order · 16 April 2008 · Spain

Reference on the Canary Islands indirect tax held manifestly inadmissible

The Court does not answer. It holds the reference manifestly inadmissible. The Canary Islands fall outside the territorial scope of the common system of VAT, and nothing in the national legislation governing the dispute, Law 20/1991, makes the Sixth Directive applicable in Spanish law beyond its territorial and material scope. The situation was therefore purely internal. Of direct interest to Spanish practitioners, because it settles that the IGIC is not governed by the VAT Directive and that CJEU case law on the directive does not bind its interpretation of its own accord.

C-425/06 Part Service

Judgment · 21 February 2008 · Italy

Abuse where the tax advantage is the principal aim, not the only one

The Court held that there can be a finding of an abusive practice where the accrual of a tax advantage constitutes the principal aim of the transaction or transactions at issue. It is not necessary that the tax advantage be the only purpose pursued. Whether the arrangements before it amounted to abuse was left to the national court to determine in the light of that interpretation, taking account of the artificial nature of the operations and the links of a legal, economic or personal nature between the operators involved. The decisive refinement of Halifax.

C-409/04 Teleos and Others

Judgment · 27 September 2007 · United Kingdom

Good faith and proof of removal on intra-Community supplies

The exemption applies, and an intra-Community acquisition occurs, only where the right to dispose as owner has passed and the supplier establishes that the goods have physically left the Member State of supply. Intention is irrelevant. However, where a supplier acted in good faith, submitted evidence establishing the exemption at first sight which the authorities accepted, and took every reasonable measure in his power to avoid participation in evasion, VAT may not be recovered from him. The purchaser's acquisition declaration is additional, not conclusive, evidence. Zero-rating turns on objective physical removal, so ex-works terms leave the supplier carrying the evidential risk and the drafting of contracts and deposit arrangements matters. Relevant to any exporter of high-risk goods and to tax authorities' post-clearance assessment practice.

C-445/05 Haderer

Judgment · 14 June 2007 · Germany

Tuition given privately by teachers, freelance teaching at public adult education centres

No direct contractual or payment link with pupils is required, and group tuition is not excluded. But the tuition must be given by the teacher on his own account and at his own risk, and must cover school or university education, a concept extending beyond qualification-led or vocational courses to activities taught in schools or universities to develop knowledge and skills, provided they are not purely recreational. Where the teacher merely makes himself available to a public authority running the education system, the exemption does not apply. Verification is for the national court. Relevant to freelance and self-employed tutors, trainers and lecturers engaging with schools, colleges and publicly run adult education providers, and to those providers themselves.

C-401/05 VDP Dental Laboratory

Judgment · 14 December 2006 · Netherlands

Exemption for dental prostheses supplied by an intermediary

The exemption does not apply. Its wording, consistent across all language versions, defines it by reference both to the goods and to the status of the supplier, so an intermediary who is neither a dentist nor a dental technician is outside it, whatever the objective of reducing healthcare costs or fiscal neutrality might suggest. Such supplies are taxable under Article 2(1) with a corresponding right of deduction, and the directive may be relied upon directly. The second question needed no answer. For dental trading companies, laboratories acting as resellers and importers of prostheses, the question is whether national law extends the exemption beyond dentists and dental technicians. Relevant to advisers on healthcare supply chains and to the status conditions attaching to other Article 132 exemptions.

C-45/01 Dornier

Judgment · 6 November 2003 · Germany

Exemption for psychotherapeutic treatment given by non-doctors in a private foundation's out-patient facility

Such treatment is closely related to hospital or medical care only where it is genuinely ancillary to principal hospital or medical care. However, medical care in point (b) covers all care within point (c), including paramedical services by non-doctors. Recognition needs no formal procedure and need not derive from tax law. A medical supervision condition exceeds Member States' discretion. Exemption under point (c) is independent of legal form. Both provisions may be relied on directly. Relevant to clinics, foundations and other non-public providers of paramedical care, including psychologists, physiotherapists and similar professions, operating through corporate or foundation structures.

C-349/96 CPP

Judgment · 25 February 1999 · United Kingdom

Single or multiple supplies and the insurance exemption for block policy holders

Procuring insurance cover for customers under a block policy, in one's own name and account, is itself an insurance transaction. "Insurance" includes the listed assistance categories. Each supply is normally distinct, but a single economic supply must not be split artificially. A single supply exists where elements are ancillary, not an aim in themselves but a means of better enjoying the principal service. A single price is not decisive. If two distinct services are bought, the insurance part must be apportioned by the simplest method. Classification is for the national court. Restricting the exemption to authorised insurers is unlawful. The source of the composite supply test now applied across the board.

C-2/95 SDC

Judgment · 5 June 1997 · Denmark

Outsourced data-handling services and the financial services exemption

The exemptions are defined by the nature of the service, not by the identity or legal form of the supplier or recipient, and electronic performance is irrelevant. No legal relationship with the end customer is needed, and it does not matter that the service appears to be the bank's own. Component supplies by a data-handling centre are exempt only if, viewed broadly, they form a distinct whole which is specific to and essential for the exempt transaction, effecting changes in the legal and financial situation. Mere technical or physical support, and supplies of financial information, are taxable. The foundation for assessing outsourced financial processing. Relevant to fintech and payment service outsourcing, and to banks pricing insourced versus outsourced processing given the difference in taxable transactions.

C-62/93 BP Supergas

Judgment · 6 July 1995 · Greece

Special petroleum VAT regime and the right to deduct

The regime is precluded because Article 11 requires taxation at each marketing stage on the value at that stage, and the right of deduction may be limited only by derogations expressly provided for. Greece's transmission of the whole draft law, without a notification expressly referring to Article 27(2), did not secure Council authorisation. The general exemption for transport and storage exceeded Article 14. The taxable amount and deduction provisions have direct effect, and refunds run retroactively, subject to national procedural rules meeting equivalence and effectiveness. Confirms that sector specific regimes replacing staged taxation with a single upstream charge, and stripping the sector of deduction, are unlawful absent a properly notified Article 27 derogation.

C-185/89 Velker International Oil Company

Judgment · 26 June 1990 · Netherlands

Exemption for fuelling and provisioning of sea-going vessels

Only supplies to a vessel operator of goods to be used by that operator for fuelling and provisioning are exempt. Supplies at a previous stage in the commercial chain are not, since the exemption is equated with export and, like Article 15(1), attaches to the final supply. But there is no requirement that the goods be actually loaded on board at the time of supply. Intervening storage does not forfeit the exemption, Member States retaining power to impose anti-abuse conditions. The foundational authority on bunkering and ship's stores chains.

Related topics

Supply of services · Provision of medical care in exercise of medical and paramedical professions · Transactions concerning deposit and current accounts · Fiscal neutrality · Insurance transactions · Management of special investment funds · Immovable property · Hospital and medical care · Other exemptions · Right of deduction