Future Health Technologies Ltd v The Commissioners for Her Majesty’s Revenue and Customs.

• Jurisdiction: European Union
• Celex Number: 62009CJ0086
• ECLI: ECLI:EU:C:2010:334
• Docket Number: C-86/09
• Court: Court of Justice (European Union)
• Procedure Type: Reference for a preliminary ruling
• Date: 10 June 2010

Case C-86/09

Future Health Technologies Limited

v

The Commissioners for Her Majesty’s Revenue and Customs

(Reference for a preliminary ruling from the VAT and Duties Tribunal, Manchester)

(Value added tax – Directive 2006/112/EC – Exemptions – Article 132(1)(b) and (c) – Hospital and medical care and closely related activities – Provision of medical care in the exercise of the medical and paramedical professions – Collection, testing and processing of umbilical cord blood – Storage of stem cells – Possible future therapeutic use – Transactions comprising a bundle of features and acts)

Summary of the Judgment

1. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive – Exemption for hospital and medical care and closely related activities – Exemption in respect of the provision of medical care in the exercise of the medical and paramedical professions

(Council Directive 2006/112, Art. 132(1)(b) and (c))

2. Tax provisions – Harmonisation of laws – Turnover taxes – Common system of value added tax – Exemptions provided for in the Sixth Directive – Exemption for hospital and medical care and closely related activities

(Council Directive 2006/112, Art. 132(1)(b))

1. When activities consisting in the dispatch of a kit for collecting blood from the umbilical cord of newborn children and in the testing and processing of that blood and, where appropriate, in the storage of stem cells contained in it for possible future therapeutic use, are intended only to ensure that a particular resource will be available for medical treatment in the uncertain event that treatment becomes necessary but not, in themselves, to diagnose, treat or cure diseases or health disorders, such activities, whether taken together or separately, do not come within the concept of ‘hospital and medical care’ in Article 132(1)(b) of Directive 2006/112 on the common system of value added tax, or within that of ‘the provision of medical care’ in Article 132(1)(c) of that directive. It would be otherwise, as regards the analysis of umbilical cord blood, only if such analysis were actually intended to enable a medical diagnosis to be made, which it is for the referring court to determine.

(see para. 47, operative part 1)

2. Activities ‘closely related’ to ‘hospital and medical care’, within the meaning of Article 132(1)(b) of Directive 2006/112 on the common system of value added tax, are to be interpreted as not covering activities consisting in the dispatch of a kit for collecting blood from the umbilical cord of newborn children and in the testing and processing of that blood and, where appropriate, in the storage of stem cells contained in it for possible future therapeutic use to which those activities are merely potentially related and which has not been performed, commenced or yet envisaged.

(see para. 52, operative part 2)

JUDGMENT OF THE COURT (Second Chamber)

10 June 2010 (*)

(Value added tax – Directive 2006/112/EC – Exemptions – Article 132(1)(b) and (c) – Hospital and medical care and closely related activities – Provision of medical care in the exercise of the medical and paramedical professions – Collection, testing and processing of umbilical cord blood – Storage of stem cells – Possible future therapeutic use – Transactions comprising a bundle of features and acts)

In Case C‑86/09,

REFERENCE for a preliminary ruling under Article 234 EC from the VAT and Duties Tribunal, Manchester (United Kingdom), made by decision of 23 February 2009, received at the Court on 27 February 2009, in the proceedings

Future Health Technologies Limited

v

The Commissioners for Her Majesty’s Revenue and Customs,

THE COURT (Second Chamber),

composed of J.N. Cunha Rodrigues, President of the Chamber, P. Lindh, A. Rosas, A. Ó Caoimh (Rapporteur) and A. Arabadjiev, Judges,

Advocate General: E. Sharpston,

Registrar: L. Hewlett, Principal Administrator,

having regard to the written procedure and further to the hearing on 18 March 2010,

after considering the observations submitted on behalf of:

– Future Health Technologies Limited, by R. Thomas, Barrister,

– the United Kingdom Government, by L. Seeboruth and H. Walker, acting as Agents, and I. Hutton, Barrister,

– the Greek Government, by O. Patsopoulou, Z. Chatzipavlou, M. Tassopoulou and M. Apessos, acting as Agents,

– the European Commission, by R. Lyal and M. Afonso, acting as Agents,

having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,

gives the following

Judgment

1 This reference for a preliminary ruling concerns the interpretation of Article 132(1)(b) and (c) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1).

2 The reference was made in the course of proceedings between Future Health Technologies Limited (‘FHT’) and the Commissioners for Her Majesty’s Revenue and Customs (‘HMRC’), who are responsible for the collection of value added tax (‘VAT’) in the United Kingdom, concerning their refusal to exempt from VAT paid activities consisting in the dispatch of a kit for collecting blood from the umbilical cord of newborn children and in the testing and processing of that blood and, where appropriate, in the storage of stem cells contained in it for possible future therapeutic use.

Legal context

European Union legislation

3 Directive 2006/112 repealed and replaced, with effect from 1 January 2007, the existing Community VAT legislation, particularly Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes – Common system of value added tax: uniform basis of assessment (OJ 1977 L 145, p. 1; ‘the Sixth Directive’).

4 According to the first and third recitals in the preamble to Directive 2006/112, the recasting of the Sixth Directive was necessary in order to present all the applicable provisions in a clear and rational manner and in an improved structure and drafting which would not, in principle, bring about material change.

5 Article 2 of Directive 2006/112 reads as follows:

‘1. The following transactions shall be subject to VAT:

(a) the supply of goods for consideration within the territory of a Member State by a taxable person acting as such;

…

(c) the supply of services for consideration within the territory of a Member State by a taxable person acting as such;

(d) the importation of goods.

…’

6 Article 131 of Directive 2006/112 is the sole article in that directive’s Chapter 1 (‘General provisions’) of Title IX (‘Exemptions’). That article reads as follows:

‘The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.’

7 Article 132(1)(b) and (c) in Chapter 2 of Title IX of Directive 2006/112 provide:

‘1. Member States shall exempt the following transactions:

...

(b) hospital and medical care and closely related activities undertaken by bodies governed by public law or, under social conditions comparable with those applicable to bodies governed by public law, by hospitals, centres for medical treatment or diagnosis and other duly recognised establishments of a similar nature;

(c) the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned;

...’

8 Apart from their introductory passage, the exemptions in Article 132(1)(b) and (c) of Directive 2006/112 are in identical terms to those in Article 13A(1)(b) and (c) of the Sixth Directive. The introductory passage of the latter provisions reads as follows:

‘Without prejudice to other Community provisions, Member States shall exempt the following under conditions which they shall lay down for the purpose of ensuring the correct and straightforward application of such exemptions and of preventing any possible evasion, avoidance or abuse.’

9 Article 133 of Directive 2006/112 provides that Member States may make the granting of the exemption provided for in, among others, Article 132(1)(b) thereof to bodies other than those governed by public law subject, in each individual case, to one or more of the conditions which it lays down.

10 Article 134 of Directive 2006/112 is in the following terms:

‘The supply of goods or services shall not be granted exemption, as provided for in [point] (b) … of Article 132(1), in the following cases:

(a) where the supply is not essential to the transactions exempted;

(b) where the basic purpose of the supply is to obtain additional income for the body in question through transactions which are in direct competition with those of commercial enterprises subject to VAT.’

National legislation

11 Section 31 of the Value Added Tax Act 1994 provides that a supply of goods or services is an exempt supply if it is of a description for the time being specified in Schedule 9 to that Act.

12 Group 7 in Schedule 9 to that Act describes the following supplies, among others, as exempt:

– the supply of services by a person registered in, among other places, the register kept under the Health Professions Order 2001 (Statutory Instrument 2002 No 254);

– the provision of care or medical or surgical treatment and, in connection with it, the supply of any goods, in any hospital or state regulated institution;

– products for therapeutic purposes, derived from human blood; and

– human (including foetal) organs or tissue for diagnostic or therapeutic purposes or medical research.

13 HMRC guidance states...