Case C‑581/19
Frenetikexito– Unipessoal Lda
v
Autoridade Tributária e Aduaneira
(Request for a preliminary ruling from the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa– CAAD))
Judgment of the Court (Third Chamber), 4March 2021
(Reference for a preliminary ruling– Taxation– Value added tax (VAT)– Directive2006/112/EC– Article2(1)(c)– Supplies subject to VAT– Exemptions– Article132(1)(c)– Provision of medical care in the exercise of the medical and paramedical professions– Nutrition monitoring and advice– Sport, physical well-being and fitness activities– Concepts of a single complex supply, a supply ancillary to the main supply, and independent supplies– Criteria)
1.Questions referred for a preliminary ruling– Admissibility– Need to provide the Court with sufficient information on the factual and legislative context– Statement of the reasons for requiring an answer to the questions referred for a preliminary ruling– Scope
(Art. 267 TFEU; Rules of Procedure of the Court of Justice, Art. 94)
(see paragraphs16, 17)
2.Harmonisation of fiscal legislation– Common system of value added tax– Exemptions– Exemptions for certain activities in the public interest– Exemption of provision of medical care in the exercise of the medical and paramedical professions
(Council Directive 2006/112, Art. 132 (1)(c))
(see paragraph50, operative part)
3.Harmonisation of fiscal legislation– Common system of value added tax– Exemptions– Exemptions for certain activities in the public interest– Exemption of provision of medical care in the exercise of the medical and paramedical professions– Concept of care– Supplies of a medical or paramedical nature carried out with the aim of protecting, including maintaining or restoring, the health of persons– Included
(Council Directive 2006/112, Art. 132 (1)(b) and (c))
(see paragraphs23-26)
4.Harmonisation of fiscal legislation– Common system of value added tax– Exemptions– Exemptions for certain activities in the public interest– Exemption of provision of medical care in the exercise of the medical and paramedical professions– Concept of activity of common public interest– Nutrition monitoring service provided in the context of physical well-being and fitness activities, without any indication of the pursuit of a therapeutic purpose– Not included– Distinct and independent supply of services– Verification a matter for the national court
(Council Directive 2006/112, Art. 132(1)(c))
(see paragraphs29-34, 37-42, 50, operative part)
Résumé
Frenetikexito is a commercial company which manages and operates sports facilities, in Portugal, in the management and operation of sports facilities, physical well-being and fitness activities and activities entailing nutrition monitoring and advice. In 2014 and 2015, it provided nutrition monitoring services on its premises by means of a qualified nutritionist certified for that purpose. Value added tax (VAT) was not invoiced for those services.
Frenetikexito offered various programmes in its establishments, some of which included only physical well-being and fitness services, while others also included nutrition monitoring. Each customer could choose the desired programme and make use, or not, of all the services made available in the context of the programme selected; the nutrition monitoring service was thus invoiced, irrespective of whether or not the customer had benefited from it. In addition, it was possible to sign up for that service separately from any other service, in return for payment of a certain amount.
In its invoices, Frenetikexito drew a distinction between amounts relating to physical well-being and fitness services and those relating to the nutrition monitoring service. There was no correspondence between the nutrition monitoring services invoiced and the nutrition consultations.
During an inspection, the tax authority found that, for the tax years in question, Frenetikexito’s customers had paid for the nutrition monitoring service even where they did not benefit from it. Taking the view, therefore, that the supply of that service was ancillary to that of the physical well-being and fitness service, that authority applied the tax treatment of the principal supply to that supply and issued an additional VAT assessment together with the corresponding compensatory interest. Since those sums were not paid, enforcement procedures were initiated for their recovery. Nevertheless, considering that the nutrition monitoring services were independent of the physical well-being and fitness services, Frenetikexito brought an action before the Tribunal Arbitral Tributário (Centro de Arbitragem Administrativa) (Tax Arbitration Tribunal (Centre for Administrative Arbitration), Portugal) seeking a declaration that the additional assessment in question was unlawful.
In those circumstances, the referring court decided to ask the Court about the interpretation of Article132(1)(c) of Directive 2006/112,(1) read in conjunction with Article2(1)(c) of that directive. Under that provision, the supply of services for consideration within the territory of a Member State by a taxable person acting as such is to be subject to VAT. By way of exception to that principle, under Article132(1)(c) the VAT directive, Member States are to exempt ‘the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned’.
In its judgment, the Court examined whether a nutrition monitoring service, supplied in circumstances such as those at issue in the main proceedings, must be regarded as a ‘supply ancillary to the main supply’, subject to VAT, or whether, on the contrary, it constitutes a distinct and independent supply of services and, if so, whether and under what conditions such a supply may be exempt from VAT.
Findings of the Court
Before answering the question whether a nutrition monitoring service supplied by a certified and authorised professional in sports facilities, and potentially in the context of programmes that also include physical well-being and fitness services, constitutes an independent supply of services, the Court examines, first of all, whether that service may fall within the scope of the exemption provided for in Article132(1)(c) of the VAT Directive.
In that regard, the Court notes that ‘the provision of medical care’ within the meaning of that provision must necessarily have a therapeutic purpose, that is to say, it must be carried out with the aim of protecting, including maintaining or restoring, the health of persons. In order to be covered by the abovementioned exemption, a supply must therefore satisfy two conditions: it must have a therapeutic purpose and take place in the exercise of the medical and paramedical professions as defined by the Member State concerned.
As regards the second condition, it is necessary to determine whether a nutrition monitoring service, such as that at issue in the main proceedings, is defined by the law of the Member State concerned as being supplied in the exercise of a medical or paramedical profession. The Court observes that, in the present case, the service in question was carried out by a person qualified and authorised to carry out paramedical activities as defined by the Member State concerned.
If that is indeed the case, it is necessary to examine the purpose of the supply in question, which corresponds to the first condition laid down in Article132(1)(c) of the VAT Directive. In so far as the exemptions provided for in Article132 of that directive form part of a chapter entitled ‘Exemptions for certain activities in the public interest’, an activity cannot be exempted if it does not meet that objective in the public interest.
In that regard, a nutrition monitoring service provided in a sports facility may, like the sporting practice itself, help to prevent certain illnesses, such as obesity. Such a service therefore, in principle, has a health purpose, but not necessarily a therapeutic one. In the absence of any indication that it is supplied for that purpose, the nutrition monitoring in question does not therefore satisfy the criterion of activity in the public interest, which is common to all the exemptions provided for in Article132 of the VAT Directive. Consequently, it does not fall within the exemption provided for in Article132(1)(c) of that directive, with the result that it is, in principle, subject to VAT.
The Court then examines whether the nutrition monitoring service is independent of the physical well-being and fitness services, which is relevant for the purpose of determining the respective tax treatment of those services. It points out that, where an economic transaction comprises a bundle of elements and acts, regard must be had to all the circumstances in which that transaction takes place in order to determine whether it gives rise to one or more supplies. As a general rule, each supply must be regarded as a distinct and independent supply. By way of exception to that rule, acts supplied by the taxable person to the customer are so closely linked that they form, objectively, a single, indivisible economic supply, which it would be artificial to split, are regarded as a single complex supply. There is another exception where certain elements are to be regarded as constituting the main supply, while other elements are to be regarded as ancillary supplies which share the tax treatment of the main supply. The relevant criteria in that regard are the absence of a distinct purpose of the supply from the perspective of the average consumer and the taking into account of the respective value of each of the supplies making up the economic transaction.
Subject to verification by the referring court, none of those exceptions is applicable in the present case. First, supplies such as those at issue in the main proceedings, which are not inextricably linked, do not constitute a single complex supply. Second, dietary monitoring has, for the average consumer, an autonomous purpose, of a health and aesthetic nature, compared with physical well-being and fitness services, the purpose of which relates to sport. Furthermore, the invoicing of those supplies, mentioned by the referring court, shows that 40% of the overall monthly fee is attributable to the nutrition advice service, with the result that dietary monitoring services such as those at issue in the main proceedings cannot be regarded as ancillary to the main services, consisting of physical well-being and fitness services. Therefore, such supplies must be regarded as distinct and independent of one another for the purposes of the application of Article2(1)(c) of the VAT Directive.
1Council Directive 2006/112/EC of 28November 2006 on the common system of value added tax (OJ 2006 L347, p.1) (‘the VAT Directive’).