Judgment of the Court Second Chamber of 7 April 2022, I VAT exemption for hospital services, C-228/20

• Date: 07 April 2022
• Year: 2022

10

In the second place, as regards the individual aid measure granted on the basis of the advance tax

ruling granted to MJN GibCo, the Court considers that the discrepancies between the analysis

contained in the decision to extend the procedure and the contested decision, in so far as they

related to decisive elements of assessment for the purposes of classifying the advance tax ruling

adopted in favour of MJN GibCo as individual State aid, were such that the Commission should have

adopted an amending decision or a second decision to extend the procedure in order to enable the

applicants to participate effectively in the procedure.

The reasoning on the basis of which the Commission considered, in the contested decision, that the

continuity of that advance tax ruling, subsequent to the 2013 amendment of the ITA 2010, constituted

individual State aid incompatible with the internal market, was based on decisive factors which were

not present in the decision to extend the procedure, namely the transparent nature of the limited

partnerships under Dutch law for the purposes of the application of Gibraltar tax law and the finding

that the partner companies would normally have been subject to income tax in Gibraltar to the extent

of their share in the profits of their limited partnerships under Dutch law.

Therefore, the Court notes that, where the Commission changes its reasoning, between the decision

to initiate the procedure and the final decision, on matters which are decisive in its assessment of the

existence of aid, the obligation on the Commission to extend the formal investigation procedure, in

order to give the persons concerned the opportunity to submit their comments, is an essential

procedural requirement, the breach of which entails the annulment of the defective act, irrespective

of whether that breach has caused damage to the person invoking it or whether the procedure could

have led to a different result. On the basis of those findings, the Court annuls the contested decision

in so far as it relates to the individual State aid granted on the basis of the advance tax ruling granted

to MJN GibCo.

IV. FISCAL PROVISIONS: EXEMPTIONS FROM VAT FOR CERTAIN ACTIVITIES IN

THE PUBLIC INTEREST

Judgment of the Court (Second Chamber) of 7 April 2022, I (VAT exemption for hospital

services), C-228/20

Link to the complete text of the judgment

Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC –

Article 132(1)(b) – Exemptions for certain activities in the public interest – Exemption for hospital and

medical care – Private hospital – Duly recognised establishment – Comparable social conditions

I GmbH is a company incorporated under German private law whose corporate purpose is, inter alia,

the operation of a hospital in the field of neurology. With the approval of the State, it supplies hospital

services, within the meaning of German law, to patients covered by various systems for the purpose

of meeting their medical expenses, including pri vate or statutory health insurance schemes. Those

patients are each treated following confirmation that their expenses would be covered by the ‘Beihilfe’

services (aid paid to public servants in the event of illness), a health insurance fund, a substitute fund

or private insurance.

In its tax returns for the 2009 to 2012 financial years, I treated the hospital services invoiced on the

basis of fixed-rate fees and the user fees charged to non-resident doctors as transactions exempt

from value added tax (VAT).