VAT Exemption on Certain Medical Diagnostic Services
In Wolf-Henning Peters (Peters)(C-700/17), the Court of Justice of the EU (CJEU) concluded that certain medical diagnostic services provided by a doctor to a laboratory could qualify for VAT exemption.
It is generally accepted that most medical services supplied by qualified medical and healthcare professionals are exempt from VAT where they are carried out for the principal purpose of protecting, maintaining and restoring a patient’s health. Otherwise, it would be subject to VAT.
In the facts of this case, Peters was a doctor established in Germany specialising in clinical chemistry laboratory diagnostics. Peters provided medical care services to a company that performs laboratory work for independent doctors, rehabilitation clinics, medical services and hospitals.
Peters considered that his services were exempt from VAT and the German tax authorities sought to argue that the VAT exemption does not apply and that these services should be treated as taxable as Peters did not provide his service under a relationship of trust between the doctor and the patient.
In this case, the CJEU ruled that the services provided by Peters could qualify for VAT exemption on the basis that the services were the provision of medical care in the exercise of a medical profession and that it is not a requirement for such a confidential relationship to be in place.
This case is currently very topical given the increase in arrangements where self-employed doctors are providing services via companies.
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