VAT Exemption for Healthcare Outsourcing Services to Hospitals – CAAD Case 215/2017-T

ARBITRAL DECISION

I - REPORT

A... LDA., legal entity no. ..., with registered office in ..., (hereinafter referred to as the Claimant), came, on 38/03/2017, pursuant to Article 2 no. 1, paragraphs a) and b), 5 no. 3 paragraph a), 6 no. 2 paragraph b) and 10 of the Legal Framework for Tax Arbitration approved by Decree-Law no. 10/2011, of 20 January, as amended by Article 228 of Law no. 66-B/2012, of 31 December (hereinafter abbreviated as RJAT), and Articles [number] and 2 of Ordinance no. 112-A/2011, of 22/03, to present a petition for an arbitral ruling on the legality of nineteen assessments of Value Added Tax (VAT) and compensatory interest, relating to the years 2012 to 2014, which shall be identified below.

It appointed António Carlos dos Santos as arbitrator.

The petition was accepted on 30/03/2017 and on 19/05/2017 the Respondent, the TAX AND CUSTOMS AUTHORITY (AT), chose to integrate the arbitral tribunal with Nina Aguiar.

In the absence of agreement between the arbitrators appointed by the parties for the selection of the third arbitrator, on 16/06/2017 the CAAD Deontological Council appointed José Baeta de Queiroz.

All arbitrators accepted the appointment, with the tribunal being constituted on 06/07/2017.

On that same date the AT was notified to respond, which it did on 25/09/2017.

On 06/10/2017 the following 30th day was set for the meeting referred to in Article 18 of the RJAT, with examination of the witnesses listed by the Claimant, which meeting, due to impediments of the parties, only took place on 29/11/2017.

At that meeting the tribunal decided to request evidentiary elements that it deemed useful from B... and C... E.P.E.

On 05/01/2017 and 05/03/2018, orders were issued, each extending the period for the decision by two months, pursuant to Article 21 no. 2 of the RJAT, and on the grounds of lack of response from those entities.

On 07/05/2018, as those entities had still not satisfied the tribunal's request, an order was issued determining the continuation of the proceedings with written submissions, extending the period for the decision by a further two months, in view of the impossibility of delivering it by the previously fixed temporal limit, and announcing it for 06/07/2018.

The parties did not submit submissions.

On 21/05/2018 C... satisfied what was requested.

II – CASE MANAGEMENT

The arbitral tribunal is competent and is regularly constituted.

The parties possess legal personality and capacity, have standing and are regularly represented.

No exceptions, nullities or preliminary issues that require decision and prevent consideration of the merits have been raised.

The proceedings do not suffer from nullities that would invalidate them.

III – FACTUAL MATTER

1 – Proven Facts

a)

The Claimant is a VAT taxable person, registered since 16/11/2010, for the exercise of the following activities:

• Principal: "other human health activities" (CAE 86906);

• Secondary: "activities supporting Public Administration" (CAE 84114); "combined administrative services activities" (CAE 82110) and "other business and management consultancy activities" (CAE 70220).

b)

For VAT purposes, the Claimant was subject to the normal quarterly regime until 31/12/2013, and to a monthly regime after that date.

c)

The Claimant's corporate purpose is the provision of health services, namely, medical services, nursing services, diagnostic and therapeutic technician services and ancillary services supporting hospital activity, through personnel provision contracts concluded with Hospital Centres (in this case collective entities of public law forming part of the National Health Service - SNS). The Claimant also provides, to those entities and under the same regime, services of another nature such as support to administration, administrative services and legal services, in relation to which it charges VAT.

d)

For the execution of services the Claimant resorts to workers with collective employment contracts (dependent workers) and services from third parties (independent workers or even other companies). These human resources possess specific qualifications for the tasks that each one carries out, and may be medical professionals, nurses and other paramedical technicians (radiology technicians, pharmacy technicians, clinical analysis technicians, physiotherapists, radiologists, speech therapists and occupational therapists), medical action assistants, as well as, on another level, jurists and others.

e)

The Claimant's activity in the health area (medical services, nursing care services, diagnostic and therapeutic technician services in the area of radiology, clinical analyses, services supporting the provision of care equivalent to operational assistants and provision of ancillary services supporting hospital activity) was not subject to VAT.

f)

The contracts under which the Claimant provides specialized personnel in the health area to Hospital Centres (collective entities of public law) are concluded, under the public procurement regime, in the name of the Portuguese Government / Ministry of Health.

g)

The Terms of Reference relating to the public tender procedure for the acquisition of services from operational assistants by D... (denomination previously used to designate ancillary services supporting hospital activity) states that the base price – or contractual price – is exempt from VAT.

h)

Similarly, the Programme of Public Tender no. .../2013 for the provision of ancillary services supporting hospital activity of B... expressly determines that the contractual price presented does not include VAT.

i)

This is the habitual practice of public procurement in this area and has been enjoyed by various companies competing with the Claimant.

j)

In the year 2012 the following invoices subject to additional assessment to D..., a hospital establishment forming part of the National Health Service, were issued by the Claimant:

Invoice no. 22/2012, 30.04.2012;

Invoice no. 40/2012, 31.05.2012;

Invoice no. 45/2012, 30.06.2012;

Invoice no. 55/2012, 31.07.2012;

Invoice no. 67/2012, 31.08.2012;

Invoice no. 81/2012, 30.09.2012;

Invoice no. 100/2012, 31.10.2012;

Invoice no. 120/2012, 30.11.2012;

Invoice no. 146/2012, 31.12.2012.

k)

In the year 2013, the following invoices subject to additional assessment were issued by the Claimant with reference to B... (the great majority) and C... (these expressly marked):

Invoice no. 7/2013, 31.01.2013

Invoice no. 8/2013, 31.01.2013;

Invoice no. 15/2013, 31.01.2013;

Invoice no. 25/2013, 28.02.2013;

Invoice no. 26/2013, 28.02.2013;

Invoice no. 27/2013, 28.02.2013;

Invoice no. 34/2013, 28.02.2013;

Invoice no. 45/2013, 31.03.2013;

Invoice no. 46/2013, 31.03.2013;

Invoice no. 47/2013, 31.03.2013;

Invoice no. 54/2013, 31.03.2013;

Invoice no. 63/2013, 30.04.2013;

Invoice no. 71/2013, 30.04.2013;

Invoice no. 72/2013, 30.04.2013;

Invoice no. 73/2013, 30.04.2013;

Invoice no. 85/2013, 31.05.2013;

Invoice no. 86/2013, 31.05.2013;

Invoice no. 87/2013, 31.05.2013;

Invoice no. 94/2013, 31.05.2013;

Invoice no. 105/2013, 30.06.2013;

Invoice no. 115/2013, 30.06.2013;

Invoice no. 117/2013, 30.06.2013;

Invoice no. 124/2013, 30.06.2013;

Invoice no. 130/2013, 31.07.2013;

Invoice no. 144/2013, 31.07.2013;

Invoice no. 145/2013, 31.07.2013;

Invoice no. 146/2013, 31.07.2013;

Invoice no. 162/2013, 31.08.2013;

Invoice no. 170/2013, 31.08.2013;

Invoice no. 171/2013, 31.08.2013;

Invoice no. 172/2013, 31.08.2013;

Invoice no. 173/2013, 31.08.2013;

Invoice no. 188/2013, 30.09.2013;

Invoice no. 191/2013, 30.09.2013;

Invoice no. 192/2013, 30.09.2013;

Invoice no. 203/2013, 30.09.2013;

Invoice no. 209/2013, 30.09.2013;

Invoice no. 211/2013, 30.09.2013 (C…);

Invoice no. 215/2013, 10.10.2013 (C…);

Invoice no. 225/2013, 31.10.2013;

Invoice no. 234/2013, 31.10.2013;

Invoice no. 235/2013, 31.10.2013;

Invoice no. 245/2013, 31.10.2013 (C...);

Invoice no. 251/2013, 30.11.2013;

Invoice no. 260/2013, 30.11.2013 (C...);

Invoice no. 269/2013, 30.11.2013;

Invoice no. 270/2013, 30.11.2013;

Invoice no. 282/2013, 31.12.2013;

Invoice no. 292/2013, 31.12.2013;

Invoice no. 293/2013, 31.12.2013;

Invoice no. 306/2013, 31.12.2013 (C...).

l)

In the year 2014, the following invoices subject to additional assessment were issued by the Claimant with reference to B... (the great majority) and C... (these expressly marked):

Invoice no. 315/2014, 31.01.2014 (C...);

Invoice no. 319/2014, 31.01.2014;

Invoice no. 329/2014, 31.01.2014;

Invoice no. 330/2014, 31.01.2014;

Invoice no. 340/2014, 28.02.2014 (C…);

Invoice no. 345/2014, 28.02.2014;

Invoice no. 346/2014, 28.02.2014;

Invoice no. 355/2014, 28.02.2014;

Invoice no. 369/2014, 31.03.2014 (C…);

Invoice no. 373/2014, 31.03.2014;

Invoice no. 382/2014, 31.03.2014;

Invoice no. 383/2014, 31.03.2014;

Invoice no. 400/2014, 30.04.2014;

Invoice no. 409/2014, 30.04.2014;

Invoice no. 410/2014, 30.04.2014;

Invoice no. 422/2014, 31.05.2014 (C...);

Invoice no. 427/2014, 31.05.2014;

Invoice no. 428/2014, 31.05.2014;

Invoice no. 438/2014, 31.05.2014;

Invoice no. 446/2014, 23.06.2014;

Invoice no. 451/2014, 30.06.2014;

Invoice no. 452/2014, 30.06.2014;

Invoice no. 462/2014, 30.06.2014;

Invoice no. 471/2014, 30.06.2014 (C…);

Invoice no. 481/2014, 31.07.2014;

Invoice no. 482/2014, 31.07.2014;

Invoice no. 492/2014, 31.07.2014;

Invoice no. 506/2014, 31.08.2014;

Invoice no. 507/2014, 31.08.2014;

Invoice no. 518/2014, 31.08.2014;

Invoice no. 531/2014, 30.09.2014;

Invoice no. 541/2014, 30.09.2014;

Invoice no. 542/2014, 30.09.2014;

Invoice no. 557/2014, 31.10.2014;

Invoice no. 567/2014, 31.10.2014;

Invoice no. 568/2014, 31.10.2014;

Invoice no. 583/2014, 30.11.2014;

Invoice no. 592/2014, 30.11.2014;

Invoice no. 593/2014, 30.11.2014;

Invoice no. 606/2014, 31.12.2014;

Invoice no. 607/2014, 31.12.2014;

Invoice no. 619/2014, 31.12.2014.

m)

The description contained in the invoices identified above refers to "Provision of Services Supporting the Provision of Care Equivalent to Operational Assistants" or "Provision of Ancillary Services Supporting Hospital Activity".

n)

The invoices issued to the Hospitals cover a set of ancillary services supporting medical action in hospital activity, which includes chemical disinfection/decontamination, washing and sterilization of clinical materials and equipment, maintenance and cleaning of clinical materials and equipment; preparation of materials and equipment necessary for different hospital activities; preparation and arrangement of spaces for the performance of clinical acts; accompanying and transporting patients in beds, stretchers, wheelchairs or on foot within hospital units; supervision of correct packaging and transport of materials in trays and plates to patients; distribution of diets to hospital patients; provision of hygiene and comfort care to patients; distribution of oxygen and other materials sterilized by medical action services; handling and use of equipment provided by the Hospitals; and provision of hygiene and comfort care to patients.

o)

These services are part of hospital activity being assigned, in particular, to a specific hospital service such as the anesthesiology service, operating room, imaging, clinical pathology, intensive care, gastroenterology, orthopedics, urology, internal medicine, physical medicine and rehabilitation, cardiology, pneumology, pediatrics, general emergency, etc.

p)

The services are provided by medical action assistants or health aides, some of whom have training in the specific area of activity.

q)

Service providers are provided with access to vocational training courses for health aides or medical action assistants duly approved by the Ministry of Health/Ministry of Education, in areas such as geriatrics, patient hygiene and comfort, prevention of hospital infections, basic life support, resuscitation, first aid, therapies, thermalism, quality and behavioral aspects, pediatrics, screening, care and referral of patients, among others.

r)

Medical action health assistants act under the technical direction and guidance of the respective hospital services, providing health care directly to SNS users.

s)

The ancillary services provided by these collaborators are not autonomous, nor constitute an end in themselves; rather, they are linked to a medical service, a nursing service or a technical service of diagnosis and therapy.

t)

The ancillary services provided are in direct relationship with the main service, all being carried out in a hospital environment.

u)

The services actually provided by the seconded collaborators have as their sole recipients the patients, not benefiting the entire population that resorts to the hospital, as would occur with other types of services such as surveillance and security services, reception, telephone services, etc.

v)

The Claimant does not provide services to these Hospital Centres related to Surveillance and Security, Cleaning, Gardening, Reception, etc.

x)

In accordance with the "Contract for the Provision of Ancillary Services Supporting Hospital Activity" that the Claimant concluded on 08/04/2013 with B..., and whose terms are hereby deemed fully reproduced, the Claimant undertook to form teams to ensure general services in all units comprising B... and in all services, specifically in the following areas of Support to the Provision of Health Care: Anesthesiology Service, Operating Room, Outpatient Surgery, Social Service, Anatomical Pathology Service, Imaging Service, Immunohematotherapy Service, Clinical Pathology Service, Nutrition and Dietetics Service, Pain Therapy Unit, Intensive Care Unit, Hospital Day Unit, Sterilization Unit, Clinical Psychology Unit, Home Support, Surgery Service, Gastroenterology Service, Ophthalmology Service, Orthopedic Service, Otolaryngology Service, Urology Unit, Dermatology Service, Internal Medicine and Oncology Service, Physical Medicine and Rehabilitation Service, Psychiatry Service, Rheumatology Service, Neurology Unit, Cardiology Unit, Pneumology Unit, Occupational Health Unit, Pediatrics Service, Gynecology and Obstetrics Service (including Delivery Room and Nursery), Child Development Center Unit, Neonatology Unit, General Emergency, Pediatric Emergency, Obstetric/Gynecological Emergency and VMER.

y)

The said contract includes:

"Despite the designation 'general services', ancillary support services comprise specific services, according to the needs of the First Party at each moment of contract execution, namely, ancillary medical action services, food, laundry, hygiene, morgue, telephone exchange, reception, transport, logistical support, maintenance and conservation, the Second Party being required to have the capacity to respond, in due time, in the exact quantities and with professionals apt and experienced in the area/service to integrate".

z)

Also in the said contract it reads:

"Without prejudice to the required specificity of the various services, the Ancillary Services Supporting Hospital Activity are described generically, without limitation: chemical disinfection/decontamination, washing and sterilization of materials and equipment; maintenance and cleaning of materials, equipment and installations; ensuring the proper functioning of all apparatus; support for the activities of the requesting services, replacing and removing and effecting disposals; preparation and ensuring in sufficient number the containers for collection of hospital solid waste and respective distribution by all laboratory areas for subsequent incineration; correct preparation of material and equipment necessary for different clinical activities; preparation and arrangement of spaces for the performance of clinical acts; supervision of correct packaging and transport of materials in trays and plates; driving of vehicles, caring for the conservation and maintenance of the respective motor fleet and previously defining the routes and travel times, insofar as strictly necessary for the contracting authority; loading of goods in vehicles, ensuring their integrity; internal messenger service; accompanying and transport of patients in beds, stretchers, wheelchairs or on foot, within and outside hospital units; external and internal transport service of medicines and products of current consumption necessary for the functioning of services; reception, arrangement and distribution of washed clothes and collection of dirty clothes and their delivery; possibly, preparation of light meals in the services and distribution of diets (general diet and therapeutic diets); maintenance of hygiene conditions in food preparation areas; Collaboration in the provision of hygiene and comfort care to patients; transport and distribution of oxygen and other materials sterilized by medical action services; collaboration in the provision of hygiene and comfort care to patients; assistance in feeding tasks; transport of cadavers; collaboration with teams and professionals from other areas; possibly, control of entry and exit of persons, vehicles and goods; information and accompaniment of users in all areas of the hospital; possibly, reception and dispatch of correspondence; collaboration with the respective services in maintaining the security of persons and property; services supporting the practice of nursing care".

aa)

Part of the said contract is a terms of reference containing:

"Under this contract the contractor undertakes to provide to the contracting entity services supporting the provision of care equivalent to health services as mentioned in Annex II B of Directive no. 2004/18/CE, corresponding to CPV code 85140000-Miscellaneous Health Services.

(...) the contractor shall place at the disposal of the contracting entity, in physical presence regime, 41 (forty-one) professionals with profile and functional content equivalent to the category of Operational Assistants, as described in the legislation in force within the scope of Public Administration Law 12 – A/2008 of 27 February".

ab)

The workers of the Claimant who provided service to C... were assigned to ancillary activities in the provision of health care in various services, namely accompaniment of patients, their hygiene, preparation of materials, namely, in the services of Medicine, Surgery/Gynecology, General Emergency and Operating Room.

ac)

The workers made available by the Claimant carried out, among others, both for B... and for C..., the following tasks:

They disinfest/chemically decontaminate, wash and sterilize clinical materials and equipment; maintain and clean clinical materials and equipment; support the activities of the requesting services, replacing and removing and effecting disposals; prepare material and equipment necessary for different hospital activities; prepare and arrange spaces for the performance of clinical acts; ensure the proper functioning of all apparatus; package and transport materials in trays and plates; accompany and transport patients in beds, stretchers, wheelchairs or on foot within hospital units; distribute medicines and products of current consumption necessary for the functioning of hospital services; distribute therapeutic diets to hospital users; handle and use hospital equipment; provide hygiene and comfort care to patients; distribute oxygen and other materials sterilized by medical action services; assist users in therapeutic feeding, medication taking and other care; transport cadavers in hospital settings; integrate health care delivery teams.

ad)

The Claimant was subject to an inspection action by the competent AT services, following which the following assessments were issued:

ae)

Such assessments were made on the basis of the considerations extracted from the inspection report, hereby deemed fully reproduced:

"(...) through analysis of the issued invoices, we verified that the taxable person, in the years under review, provided services of 'Support to the Provision of Care Equivalent to Operational Assistants' and 'Ancillary Services Supporting Hospital Activity'.

In accordance with the service provision contract exhibited, and which was the basis for its execution, those services aimed to ensure general services in all units comprising the hospital entity (no. 2 of clause 2 of the contract). Furthermore, no. 3 of the same clause clarifies that those general services comprise specific services; ancillary medical action services, food, laundry, hygiene, morgue, telephone exchange, reception, transport, logistical support, maintenance and conservation. In turn, no. 4 of the same clause describes generically, without limitation, the Ancillary Services Supporting Hospital Activity, as: 'disinfection/decontamination, washing and sterilization of materials and equipment; maintenance and cleaning of materials, equipment and installations; ensuring the proper functioning of all apparatus; ...; possible control of entry and exit of persons, vehicles and goods;...'.

In response to the notification, the taxpayer did not provide a copy of the 'contract for provision of services supporting the provision of care equivalent to operational assistants' possibly concluded with D... that governed the services provided in 2012, following the public tender no. .../2011. However, given that:

• in the response to point 1 of the notification the taxpayer did not distinguish the nature of the services provided in 2012, with the description 'Provision of Services Supporting the Provision of Care Equivalent to Operational Assistants', from the nature of the services provided from 2013 onwards, with the description 'Provision of Ancillary Services Supporting Hospital Activity'';

• the services supporting the provision of care equivalent to operational assistants were invoiced to D... until September 2012 and to B..., from that date onwards;

• B... was created on 1/10/2012, as a result of the merger of E... and D...;

• contract no. .../2013 was concluded in April 2013;

it is concluded, therefore, that in substance, the nature of the services in question is the same.

The taxable person understood (...) that the services in question corresponded to operations that would be exempt under no. 2 of Article 9 of the VAT Code.

Pursuant to no. 2 of Article 9 of the VAT Code, as drafted at the date of the facts, the following are exempt: 'Medical and health services and operations related to them carried out by hospital establishments, clinics, dispensaries and similar establishments'. This exemption thus covers medical and health services (health acts), which consist of providing assistance to persons, diagnosing and treating diseases and operations related to them carried out by the establishments expressed in the said rule or by similar establishments.

Furthermore, no. 1 of Article 9 of the VAT Code establishes that the following are exempt from tax: 'Services provided in the exercise of the professions of physician, dentist, midwife, nurse and other paramedical professions'. This provision is intended, therefore, to exempt services of a medical character provided in the objective exercise of the activities described therein (physicians, paramedics...). Although the professions are specified with respect to which services provided in their exercise are covered by that regime, there remains a residual character when referring to 'other paramedical professions'. Given that there is no concept in the VAT Code that defines paramedical activities, recourse must be had to Decree-Law no. 261/93, of 24 July, and Decree-Law no. 320/99, of 11 August, as these are the two diplomas that regulate the exercise of health professional activities called paramedical activities, these being listed in the list appended to Decree-Law no. 261/93.

It should be noted that the exemption of no. 1 of Article 9 of the VAT Code operates independently of the legal nature of the service provider and, in particular, of the fact that it is a natural or legal person.

Paragraph b) of no. 1 of Article 2 of Ordinance no. 459/2005, of 3 May, which establishes the certification framework relating to the profiles of medical action assistant professionals, defines this professional as one who 'collaborates, under the guidance of health technicians, in the provision of care to patients, in the maintenance of cleanliness and hygiene conditions in facilities and in support, logistical and administrative, to the service and or unit integrated in health care establishments'.

With respect to the concept of 'provision of medical services', the Judgment of the Court of Justice of the European Communities, of 14 September 2000, Case no. 384/98, considers as such activities those that consist in providing assistance to persons, diagnosing and treating a disease or any health anomaly.

Thus, service provisions that do not have a therapeutic objective - diagnosing, treating, and, to the extent possible, curing diseases or health anomalies - fall outside the scope of application of the exemption of Article 9 of the VAT Code, being subject to tax and not exempt from it.

Recall, in a manner relevant to its VAT classification, that the situation in question consists of the provision of ancillary services supporting hospital activity, namely services of medical action assistants, food, laundry, hygiene, morgue, telephone exchange, reception, transport, logistical support, maintenance and conservation. In other words, we are not dealing with services providing assistance to persons, diagnosing and/or treating diseases.

In this way, the activities developed by the taxable person, in the part relating to ancillary services supporting hospital activity, although related to the health area, fall outside the scope of application of the exemption of Article 9 of the VAT Code, being subject to tax and not exempt from it.

Just as the taxpayer distinguished, at the level of VAT classification, the services provided for support to administration, legal services, animation services, public relations services and others, all of which also related to health, from medical and paramedical services, it should also have differentiated ancillary services supporting hospital activity from the said medical and paramedical services. Furthermore, if the Hospital Centre were to acquire hygiene services, services for maintenance and repair of materials and equipment, logistical support or others, from companies specialized in the respective areas and that did not provide medical services, the said services would not benefit from any VAT exemption; in this regard it should be noted that it follows from European jurisprudence that the requirement for a correct and simple application of VAT exemptions cannot prejudice the objectives pursued by the Sixth Directive (now Directive 2006/112/CE), nor the principles of community law, in particular the principle of fiscal neutrality.

Accordingly, the provision of ancillary services supporting hospital activity by the taxpayer are taxed under the general terms of the VAT Code. Wherefore, with respect to those services, the taxable person was obliged to charge tax at the standard rate provided for in paragraph c) of no. 1 of Article 18 of the VAT Code".

af)

After the Claimant exercised the right to prior hearing, the following was written in the same report:

"It is now necessary to proceed with the appreciation and commentary of the arguments adduced in the petition. For this, first of all, let us - by way of recollection - make a brief description and appreciation of the activity and tax classification of the taxable person:

1. The taxable person provides medical services, nursing services, diagnostic and therapeutic technician services

2. The taxable person provides ancillary services supporting hospital activity;

3. The taxpayer also provides services supporting administration, administrative services and legal services, animation services, among others;

4. The services are provided to Hospital Centres, through outsourcing contracts, that is, on a subcontracting basis;

5. The services to be provided are defined in contracts concluded, according to which the taxable person undertakes to:

• provide specifically a determined service (e.g.: nursing) and for a determined period (clauses 1st, 2nd and 4th);

• assign to the provision of that service a given number of collaborators (clause 2nd);

• that each collaborator work x hours per week (clause 8th); and

• ensure the contracted service in the service units that comprise the defined hospital entity (clause 6th).

1. The taxable person considered that all types of services identified in points 1) and 2) were exempt from VAT under no. 2 of Article 9 of the VAT Code.

2. Tax Inspection, in accordance with and on the grounds contained in the draft report notified, considers that the services referred to in point 2) cannot be included in VAT-exempt services.

Note that the taxable person provides various types of services, all in the health area, but perfectly separate and distinct from each other.

With respect to the services in question - Services Supporting the Provision of Care Equivalent to Operational Assistants and Ancillary Services Supporting Hospital Activity - the taxable person argues first that these Tax Inspection services should have paid attention to the profile of the medical action professional and should have noted that 'ancillary services supporting hospital activity' were in question, which in its view are accessory to the main service provisions. At this point the taxable person states that they are '... accessory to the main service provisions, as the AT itself recognizes '... provision of services in the health area, namely medical services, nursing services, diagnostic and therapeutic technician services''.

Regarding what is stated in the last sentence of the previous paragraph, the taxpayer does not explain nor can it be inferred how it reached such a conclusion. Indeed, nowhere in the draft inspection report is it stated or recognized that these are services accessory to the main services. The conclusion and statement of the taxable person thus lacks foundation. It is certain that the provision of these services corresponds to separate contracts, having had underlying it, in respect of public procurement rules, autonomous tender procedures.

As for the first part of the same paragraph, it is important to note that, for the purpose of the classification given to the services in question, the profile of the professionals was not taken into account, but rather the nature of the services contracted and provided. In fact, given the terms of the contract, the taxable person made available a determined number of persons, to work X hours a day, to carry out general services in the various hospital units, specifically the following services: disinfection/decontamination, washing and sterilization of materials and equipment; maintenance and cleaning of materials, equipment and installations: ensuring the proper functioning of all apparatus and possible control of entry and exit of persons, vehicles and goods.

Note that the taxable person at no point admits that the services in question correspond to services providing assistance to persons, diagnosing and/or treating diseases.

The taxable person seeks, rather, to have the services in question considered as service provisions connected to medical service provisions, and as such exempt from VAT under no. 2 of Article 9 of the VAT Code. To appeal to this, the taxable person argues, first, that it is a similar establishment.

Note that in the conclusions of the draft inspection report, on the classification of the taxable person, it was only stated 'the activities developed by the taxable person, in the part relating to ancillary services supporting hospital activity, although related to the health area, fall outside the scope of application of the exemption of Article 9 of the VAT Code''.

Now, without pronouncing ourselves on whether we are dealing with a similar establishment, although not disregarding that there would be doubts, and therefore without conceding on this matter, it is important to verify whether the services in question can be considered accessory/connected to medical service provisions, in order to assess their possible classification under no. 2 of Article 9 of the VAT Code.

As stated above, the taxable person provides various services, distinct and independent from each other, to Hospital Centres. The services in question, mentioned in 2) above, are not linked to any medical service or nursing service, as is the case with respect to the services mentioned in 3). While not disputing that, in particular, hygiene services, cleaning services, among others, are necessary and indispensable for the proper functioning of the Hospital Centre, as a provider of medical services in relations with patients, such services are not strictly connected to a determined main service (medical act/service of assistance to persons), in logic entirely identical to that of administrative services, or legal services. If that were not the case, all and any services upstream of medical services, that is, all inputs of a hospital establishment, would have to be considered services connected to medical services and be exempt from VAT. Let us see: the supply of electricity, the provision of space to a hospital, security services, telecommunications services, among others, would they not also be indispensable for the implementation of medical services? By the logic invoked in the petition the answer would have to be affirmative, when it seems to us consensual that none of the services exemplified are services connected with medical acts.

Indeed, a manifestation of that consensus, shared by the taxpayer inspected himself, is revealed by the treatment that the taxable person gives to services supporting administration, administrative services and legal services, as well as animation services, among others, with respect to which VAT was charged, applying a criterion that it refrains from disclosing, failing to mention it throughout its own hearing.

In the absence of a legal definition of 'connected services', invoked in no. 2 of Article 9 of the VAT Code, specifically in the VAT Directive, we will address the concept in light of what is set out in conclusions of the CJEU. Starting with the concepts brought by the taxable person to the petition.

At point 57 of the petition (CopyGene Case) it is said that this is '... an incidental, connected or accessory provision is a provision that is not for the clientele an end in itself, but a means of benefiting under better conditions from the main service of the provider.';

In the same point (now invoking the Ygeia Judgment) it is said that: 'Provisions are only strictly connected with hospitalization or medical assistance when they are effectively provided as accessories to such assistance rendered to patients as main provision…';

At points 59 and 60 of the petition (reporting to the 'Commission against France Case') it is stated that '... When a physician suspects that a patient suffers from a specific disease, but wishes to confirm the provisional diagnosis through an analysis, the collection, which is a central phase and an indispensable prerequisite for carrying out the analysis, should, in any normal literal examination of the terms that make up the concept of 'strictly connected operations), be considered connected sufficiently closely with medical or hospital assistance provided by that physician.", and that in this context " .. .prescribes, with a view to elaborating its diagnosis and with a therapeutic purpose, that its patient submit to an analysis, the transmission of the collection, which logically falls between the act of collection and the analysis proper, should be considered strictly connected with the analysis and, therefore, benefit from VAT exemption".

The cases of jurisprudence presented by the taxable person in the petition always have as underlying assumption that the connected service is strict and in direct relationship with the main service (preventive, diagnostic or treatment medical services of a disease). However, this does not happen in the services in question and which gave rise to corrections, as we had the opportunity to explain above.

In fact, these are services necessary to the functioning of a hospital establishment (as are also services for cleaning, maintenance and repair of photocopiers, overhead projectors, computers or other equipment of an establishment), but they are not intimately linked to the medical act, such that one can say that they are part of a stage within the medical service provision process, inseparable from it, such that 'their decomposition would have an artificial nature', (as is stated in the 'Levob Verzekeringen and OV Bank Case', invoked by the taxable person), which would justify the application of a single VAT regime.

However, and as the taxable person refers to at point 57 of the petition, with respect to the Ygeia Judgment 'a provision that is not indispensable to achieve the objective pursued by the main provision, even if it may be considered very useful for that provision, will be considered a strictly connected provision. (...) Provisions are strictly connected with hospitalization or medical assistance only when they are effectively provided as accessory provisions to such assistance rendered to patients as main provision, when they logically fit within the scope of the provision of those services and only when they constitute an indispensable stage in the medical service provision process to achieve the therapeutic objectives pursued, because only such provisions are capable of influencing the cost of health care whose exemption makes them accessible." (emphasis added)

Because the intention and ultimate objective of the exemptions provided for in Article 13° A) no. 1, paragraphs b) and c) of the VAT Directive will always be the reduction of the cost of health care provided to the patient.

And if we take into account the services in question - disinfection/decontamination, washing and sterilization of materials and equipment, maintenance and cleaning of materials, equipment and installations, ensuring the proper functioning of all apparatus;...; possible control of entry and exit of persons, vehicles and goods - it is easily understood that these services are aimed at the proper and regular functioning of the hospital establishment, taking into account the functions inherent to it, but not having as sole recipients the patients. In fact, these services benefit the entire population that, in some way, resorts to the same establishment, whether composed of visitors, suppliers or even hospital workers themselves, since they contribute to the maintenance of cleanliness and decontamination of the hospital environment and the physical safety of the population found there.

Also regarding neutrality, one cannot forget that there are workforce placement companies and/or others specialized in each of the services in question, whose services are not exempt and which are qualified to ensure the same services, without reason to believe that they do not do so with equal quality and conditions, especially because identical contractual bonds oblige them to do so.

Furthermore, the taxable person, by providing 'ancillary medical action services' aimed to obtain supplementary revenues by carrying out operations carried out in direct competition with those companies subject to VAT.

Accordingly, it is considered that in the case in question the requirements are not met to consider that the 'ancillary medical action services' in question are a strictly connected operation with the medical act itself, taking into account its therapeutic scope and the 'intention to ensure that the benefit of medical and hospital assistance does not become inaccessible due to increased costs of that assistance' (...).

Furthermore, at point 18 of the petition, and as previously transcribed, the taxable person states that 'when such accessory services are provided in isolation, the exemption cannot even be applied to them'. In fact, associated with the principle of fiscal neutrality underlying VAT, also explained and invoked several times in the petition, the application of the exemption to the services in question would breach the said principle, since when the Hospital Centre (which cannot pass on the tax) acquires these services from the taxable person without VAT (lower price), if it acquired them from the entity specialized in the area and that does not provide medical services it would acquire with VAT (higher price). Wherefore, there would be a distortion of competition since the taxpayer inspected is at an advantage relative to other entities, arising solely from the incorrect tax classification of the provision of ancillary medical action services.

In complement of what was set out above, as a solid contribution to the conclusion that the proposed corrections do not constitute, even, news, it is clarified that, with reference to process no. 1064, by order of 16/09/2010, binding information was produced on the classification for VAT purposes of services 'ancillary medical action', where the exclusion of the application of the exemption provided for in no. 2 of Article 9 of the VAT Code was already determined: 'Wherefore, the services provided by 'medical action auxiliaries', although related to the health area, exceed the scope of application of the exemption provided for in no. 2 of Article 9 of the VAT Code, and cannot benefit from the classification in the said exemption'.

Finally, and with respect to point no. 5 of the Conclusions inserted in the Hearing of Rights, it should be noted that the position set out there cannot be agreed with, since no. 1 of Article 9° of the VAT Code does not contemplate, contrary to its no. 2, the admissibility of accessory service provisions, being only subject to exemption 'services provided in the exercise of the professions of physician, dentist, midwife, nurse and other paramedical professions', these latter being those mentioned in Decree-Law no. 261/93, of 24 July, in its current wording, in the conditions and terms referred to therein, wherefore this no. 1 is not applicable to the situation in question.

In view of the above, the claims of the taxable person cannot be granted, wherefore it is concluded in favor of the maintenance of the proposed corrections, based on (...) the Draft Report and set out in this Report".

2 - Unproven Facts

There are no facts alleged, relevant to the decision of the case, that have not been proven.

3 - Reasoning of Factual Matter

The facts declared proven were so based on the documents submitted by the parties and contained in the administrative file, the information provided to the tribunal by C..., E.P.E., the party declaration and the testimony of witnesses, all of whom showed direct knowledge of the facts they were asked about and testified with apparent impartiality.

IV – LEGAL MATTER

Since VAT is a general consumption tax of a Community matrix, the concept of service provision assumes the nature of an autonomous concept of European Union law, quite distinct from the privatistic concept of national laws and, consequently, from the concept of the service provision contract provided for in Article 1154 of our Civil Code, which is irrelevant for this purpose.

In accordance with Article 4, no. 1 of the VAT Code (CIVA), "Operations are considered as service provisions when carried out for consideration that do not constitute transmissions, intra-Community acquisitions or imports of goods". This notion implements the provision of Article 24, no. 1 of the VAT Consolidation Directive (Directive 2006/112/CEE, of the Council of 28 November 2006, hereinafter DCIVA) whose content is as follows: "Service provision means any operation that does not constitute a delivery of goods". What is relevant is thus that materially one is dealing with a service (and not with a delivery of goods) fitting within an economic activity (as defined, very broadly, by the DCIVA, in its Article 9, no. 1, and the CIVA, in its Article 2, no. 2, paragraph a)) and provided, in the national territory, by a taxable person acting as such.

The VAT regime, a strongly harmonized tax, is, in essence, identical in all Member States (MS) in everything that concerns incidence rules.

The tendential universality of the tax thus implies that any type of patrimonial attribution that does not constitute delivery of goods has underlying it an operation of service provision subject to taxation, albeit possibly exempt. For this reason, doctrine frequently refers to the fact that we are dealing with a residual or negative concept of service provision. This was the technique used by the European Community to avoid the always problematic enumeration of taxable services, a technique used in the extinct transaction tax.

In this sense, it is absolutely clear that the assignment of personnel carried out by a company to an institution is, for VAT purposes, a service provision. This assignment is embodied in a triangular relationship between A (assigning company), B (institution receiving the assigned personnel) and C (personnel subject to assignment). It is the set of legal relationships underlying this triangular relationship that should be analyzed in the case of personnel assignment and not only the relationships between A and B or between B and C. In fact, in the case at hand, company A (A...) materially provides services to B (hospital centers) through C (the assigned personnel), these services being intended for the users (patients, patients, sick) of B.

On the Community and National Regime of Incomplete Exemptions

Also the regime of exemptions, and in particular that of simple exemptions, those that do not grant the right to deduction, flows, in essence, from the DCIVA (Title IX, Articles 131 et seq.) A general provision (provided for in Article 131 of the DCIVA) provides that "The exemptions provided for in Chapters 2 to 9 apply without prejudice to other Community provisions and under conditions laid down by the Member States to ensure the correct and simple application of those exemptions and to prevent any possible fraud, evasion or abuse".

Chapter 2 concerns exemptions for the benefit of certain activities of general interest, taxatively listed and described with reasonable detail by the DCIVA, such exemptions being mandatory for Member States (MS). One of them is contained in paragraph b) of no. 1 of Article 132 of the DCIVA, imperatively declaring exempt

"b) Hospitalization and medical assistance, and also operations closely related to them, provided by organisms of public law or, under social conditions analogous to those applying to the latter, by hospital establishments, medical and diagnostic care centers and other establishments of the same nature duly recognized"

The ratio of these exemptions, in accordance with the jurisprudence of the CJEU and with doctrine, consists in the reduction of the costs of an economic and social activity considered to be of essential public interest, in this case, public health.

Some additional observations are necessary in this regard.

By definition, incomplete exemptions (without the right to deduction) always constitute exceptions to the principle of VAT neutrality, as they imply the existence of hidden tax. This breach of neutrality would be even more concerning for the common VAT system if each MS could exempt operations subject to VAT according to its own criteria and interests. The Community regime of exemptions thus seeks to avoid excessive discrepancies in the application of exemptions by MS, through a solution as harmonized as possible, and this without prejudice to granting MS a certain margin of autonomy in fixing the conditions for the assignment of said exemptions (see the cited Article 131 of the DCIVA).

Thus, in the name of possible fiscal neutrality, so that the regime of exemptions be tendentially the same in all MS, avoiding strong distortions of competition, the notions that make up the Community description of incomplete exemptions should be interpreted identically throughout the European Union area and, as a rule, based on a strict interpretation. It should be noted, however, that, significantly, according to Community jurisprudence, the rule of strict interpretation does not apply to paragraph b) of no. 1 of Article 132 of the DCIVA. In fact, in the judgment of 11 January 2001, delivered in case C-76/99, Commission/France, p. I-249, the CJEU considered, regarding hospitalization services, medical assistance and also operations closely related, that this provision does not imply a strict interpretation, since its objective is to ensure that access to these services is generalized and occurs at the lowest possible cost[1].

The harmonizing objective is, however, only achievable if the material or economic substance of the operations or acts in question is privileged over the legal form they present, which, as a rule, tends to be distinct from MS to MS.

Finally, it should also be noted that the exemptions of the Community regime do not have a personal nature. That is: these exemptions are not granted for the benefit of the transmitters of goods or service providers, but for the benefit of certain activities of general interest, to the extent that they allow reducing the price paid for goods and services by their purchasers, namely in the case of absence of a universal and free health service, by the users themselves in relation to the services provided by personnel of hospital establishments or centers. Indeed, it is good not to forget that, from the point of view of the taxable person providing services, the incomplete VAT exemption can even translate itself into a penalty, since, if he does not charge VAT, he also does not deduct the VAT borne in operations carried out upstream of those operations[2].

Among us, the reception of Community norms relating to incomplete exemptions is contained essentially in Article 9 of the CIVA. Thus, no. 2 of this article transposes the provision of the cited Article 132, no. 1, paragraph b) of the DCIVA, adapting it to the local context, that is, in accordance with the cited Article 131 of the DCIVA, taking into account conditions aimed at ensuring its correct and simple application and preventing any possible fraud, evasion or abuse). Thus exempt are not only "medical and health services" but also "operations closely related to them, carried out by hospital establishments, clinics, dispensaries and similar establishments", that is, provided in a hospital environment.

It should be noted from the outset that the exemptions provided for in the CIVA cover health services (and not only medical services in the strict sense[3]) and also, as was said, "operations closely related" to medical and health services.

It is true that, as NEVES (2010) states, "the fact that what should be understood by connected service is not specified raises, in practice, many doubts, as the range of services that can be provided and which show connection with those (medical or health) services is quite vast. Nevertheless, one can say with a relative degree of certainty that connected are all those operations, carried out at a time before or after the services, with which they present a connection or a relationship, in the sense of contributing to their realization, and can be seen as accessory or instrumental in relation to the main provision"[4].

Also LAIRES concludes that, "in view of the jurisprudence referenced, it should be considered, therefore, in relation to the categories of exemptions enumerated in paragraphs 2), 6,) 7), 9), 10), 12), 13), 14) and 19) of Article 9 of the CIVA, that the extension of the same to the connected or closely connected operations referred to therein relates to accessory operations that, not representing an end in themselves for the client, make it possible to ensure that the main service is of greater quality or is obtained under better conditions"[5].

The limitation of the extension of the concept of connected services is provided to us by paragraphs a) and b) of Article 134 of the DCIVA. Thus excluded from the exemption are accessory service provisions that are not indispensable to the carrying out of exempt operations, as well as those intended essentially to provide the organism with supplementary revenues by carrying out operations in direct competition with commercial companies subject to VAT. It was in this context (quite different from that of the instant case) that the Court of Justice excluded, in principle, from the exemption telephone services and television rental services to hospitalized persons or the provision of accommodation and meals to companions, as well as services provided by a stem cell bank not carried out in a hospital environment (see respectively the Ygeia and CopyGene cases invoked by the AT).

In the present case, the service provisions actually carried out by A..., through the assigned personnel, undoubtedly fall within the concept of connected services operations, related, accessory or instrumental to medical and health services[6].

It is reaffirmed also that the exemption is granted not for the benefit of service providers[7] but rather, ultimately, for the benefit of users (patients, patients, sick) of services provided by medical, paramedical or auxiliary personnel in the physical space of establishments and similar institutions. For this purpose, the contractual form that the hiring of such personnel assumes is irrelevant. Both services performed directly by independent service providers count, as those performed by workers under employment contract (often problematic due to budget restrictions) or by providers whose collaboration derives from personnel assignment regimes (a situation, incidentally, common in the provision of medical and nursing services themselves). In his annotations to Article 9 of the CIVA, NEVES[8] reports the following administrative decision: "(...) 14. In the disputed case, it is verified that the services to be provided by the applicant are embodied in provisions of a medical character, namely, in the assignment of medical personnel and, as such, constitute operations capable of benefiting from the exemption regime provided for in no. 2 of Article 9 of the CIVA. 15. In reality we are dealing with a consideration paid by the National Health Service for the services that these physicians, assigned by the applicant, provide to the patient population of the hospitals with whom they contracted, and as such, it can be considered that it has classification in the concept of similar establishment".

It is thus clear that these exemptions apply regardless of whether the services are provided directly or indirectly, through resort to subcontracting of personnel provided by taxable persons recognized as suitable for this. It is also clear that these personnel assignment service providers can be considered as similar establishment.

No reason justifies that this possibility of hospitals resorting to subcontracting be restricted to medical services, with the exclusion of ancillary services closely related to medical and health services. In reality, what matters is the integration of professionals providing services specifically related to medical or health services in teams that, functioning in a hospital environment, provide health care under the technical direction of physicians or nurses. It is within the domain of experience and the nature of things, a fact that any health professional recognizes in practice, that those hospital teams providing therapeutic services to users cannot function exclusively with physicians and nurses.

In fact, without the collaboration of professionals who carry out operations closely related to hospitalization and medical assistance, one can even say that, sooner or later, our National Health Service would risk collapsing.

V - DECISION

Accordingly, the arbitrators constituting this tribunal decide:

1 - To judge the main claim well-founded, annulling, as illegal, the VAT assessments and compensatory interest challenged;

2 - Not to condemn the Respondent to pay indemnifying interest in the absence of proof of payment of the amounts assessed, without prejudice to the legal obligation resulting from Articles 43 of the General Tax Law and 61 of the Tax Procedure and Process Code (CPPT).

VI - VALUE OF THE CASE AND COSTS

In accordance with the provisions of Articles 97-A, no. 1, a), of the CPPT and 3 no. 2 of the Regulation of Costs in Tax Arbitration Proceedings, the value of the case is fixed at €625,210.67 (six hundred and twenty-five thousand two hundred and ten euro and sixty-seven cents).

Pursuant to Article 22 no. 4 of the RJAT there is no need to set the amount of costs and their distribution among the parties.

Notify

Lisbon, 6 July 2018

The Arbitrators

(José Baeta de Queiroz)

(Nina Aguiar – dissenting in accordance with the attached declaration, which is part of this judgment)

(António Carlos dos Santos)

DISSENTING OPINION

Framework

The fundamental legal question to be decided in the case is whether certain service provisions made by the Claimant are covered by the value added tax (VAT) exemption provided for in Article 9, 2 of the respective code, specifically on the grounds that they qualify as "operations closely related to medical and health service provisions".

To reach an answer it is necessary, on the one hand, to interpret the exemption rule, seeking to establish its concepts as far as this appears possible and necessary; and, on the other hand, to interpret the factual reality, which in the case appears complex, with a view to the exercise of subsumption of the facts in the provision of the rule.

The reasons that motivate the divergence of the signatory of this dissenting opinion in relation to the position that prevailed within the arbitral tribunal concern both objects of discussion: the interpretation of the rule and the interpretation of the facts.

Interpreting the Exemption Rule

The Article 9, 2 of the VAT Code must be interpreted in conformity with European law and with CJEU jurisprudence on the same

Beginning with the first task, Article 9, 2 of the VAT Code (CIVA) provides:

[The following are exempt from tax:] "Medical and health services and operations closely related to them, carried out by hospital establishments, clinics, dispensaries and similar establishments".

This legal provision transposes into the internal legal order Article 132, 1, b) of Directive 2006/112/CE of the Council, of 28 November 2006, on the common system of value added tax (hereinafter VAT Directive), which provides:

[1. The Member States shall exempt the following operations:]

b) Hospitalization and medical assistance, as well as operations closely related thereto, provided by public law organisms or, under social conditions analogous to those applying to the latter, by hospital establishments, medical and diagnostic care centers and other establishments of the same nature duly recognized;

The provision of the CIVA must be interpreted in a manner consistent with the interpretation that has been made of the transcribed provision of European regulations by the CJEU.

Indeed, it constitutes a long-established principle in European Union law that courts of the Member States must interpret all national law in conformity with European Union law (CJEU Judgment of 04-07-2006, C‐212/04 Konstantinos Adeneler and others).

Let us see then, in brief outline, how the scope of the cited provision of European law has come to be delimited.

The Concept of Medical and Health Service Provisions

It results from the very letter of Article 132 of the VAT Directive that the exemptions provided for therein are mandatory for the States as to their scope of application. Member States cannot – except in cases expressly provided for by exception – fail to exempt the activities provided for therein, and can only do so to the extent provided for therein.

The CJEU states this in the Skatteverket judgment:

Contrary to what KD alleges, the principle of fiscal neutrality does not call into question this conclusion. As the Advocate General noted in point 53 of her opinion, this principle does not permit extending the scope of an exemption, in the absence of an unequivocal provision. Indeed, the said principle is not a rule of primary law that can determine the validity of an exemption, but rather a principle of interpretation that should be applied parallel with the principle that exemptions are of strict interpretation (see judgment of 19 July 2012, Deutsche Bank, C‑44/11, point 45).

It is well-established jurisprudence of the CJEU that the exemptions provided for in Article 132 of the VAT Directive[10] (corresponding to Article 13 of the Sixth Directive[11]) constitute autonomous concepts of European Union law that have the objective of preventing divergences in the application of the VAT regime from one Member State to another (CJEC Judgment, 25-02-1999, C 349/96, Card Protection Plan Ltd (CPP)/Commissioners of Customs & Excise, para. 15; CJEC Judgment 15-06-1989, C 348/87, Stichting Uitvoering Financiële Acties v Staatssecretaris van Financiën, para. 11; CJEU Judgment 28-01-2010, C 473/08, Eulitz v. Finanzamt Dresden I, para. 25).

It equally results from well-established jurisprudence that the exemptions provided for in Article 132 of the VAT Directive are not intended to exempt from VAT any activities of general interest, but solely those enumerated and described in great detail therein (see, in particular, judgments of 11-07-1985, Commission/Germany, C 107/84, para. 17; of 20 November 2003, D'Ambrumenil and Dispute Resolution Services, C 307/01, para. 54; and Eulitz, already cited, para. 26).

However, the interpretation of those terms must be made in conformity with the objectives pursued by the said exemptions and respect the requirements of the principle of fiscal neutrality inherent in the common VAT system. Thus, this rule of strict interpretation does not mean that the terms used to define the exemptions provided for in the said Article 132 should be interpreted in a manner that deprives them of their effect (see, in particular, judgment of 14-06-2007, Haderer, C 445/05, para. 18 and jurisprudence cited, and Eulitz judgment, already cited, para. 27 and jurisprudence cited).

Accordingly, the concept of "medical assistance", which appears in Article 132, no. 1, paragraph b), of the VAT Directive (as does that of "service provisions of assistance" appearing in Article 132, no. 1, paragraph c), of that directive) aims at provisions intended to diagnose, treat and, as far as possible, cure diseases or health anomalies (see judgment 21-03-2013, C-91/12, Skatteverket v. PFC Clinic, para. 25; and CJEU judgment of 10-06-2010, C‑86/09, Future Health Technologies, paras. 37 and 38).

The Provision of Article 132, 1 b) Should be Subject to a Restrictive Interpretation

The terms used to designate the exemptions provided for in Article 132 of the Directive are of strict interpretation, given that they constitute exceptions to the general principle of VAT taxation of each service provision effected for consideration by a taxable person.

Now, the judgment to which this dissenting opinion opposes itself states that the provision in question should not be subject to a restrictive interpretation. Indeed, it states: "It should be noted, however, that, significantly, according to Community jurisprudence, the rule of strict interpretation does not apply to paragraph b) of no. 1 of Article 132 of the DCIVA. In fact, in the judgment of 11 January 2001, delivered in case C-76/99, Commission/France, p. I-249, the CJEU considered, regarding hospitalization services, medical assistance and also operations closely related, that this provision does not imply a strict interpretation, since its objective is to ensure that access to these services is generalized and occurs at the lowest possible cost."

This conclusion, which we believe to be excessive, cannot be followed, as what is read in the cited CJEU judgment is that "no particularly restrictive interpretation is justified." Which is different from saying that here, contrary to all other exemptions, the rule of strict interpretation does not apply.

In the Skatteverket judgment, concerning the provision of medical services, the Court of Justice states:

1. With regard to these questions, it should be recalled first that the terms used to designate the exemptions