Court of Justice of the European Union Judgment of 13 March 2014 (Case C-366/12) Reference for a preliminary ruling – Sixth VAT Directive – Exemptions – Article 13A(1)(b) – Supply of goods – Supply of cytostatic drugs for the treatment of outpatients – Services provided by different taxable persons – Article 13A(1)(c) –  Provision  of  medical  care  –  Drugs  prescribed  by  a  doctor  working  in  an independent capacity in a hospital – Closely related activities – Services ancillary to the provision of medical care – Activities physically and economically indissociable

In this judgment the Court of Justice ruled in connection with a reference for a preliminary ruling on the exemption from Value Added Tax (“VAT”) of the supply of drugs in the course of outpatient treatment.

In this context, the Court of Justice states that the supply of drugs prescribed in the course of outpatient treatment  by doctors working  in an independent capacity in a hospital could only be exempt from VAT if, in the particular case, the supply of drugs is strictly necessary by the time the treatment is provided and, therefore, is physically and economically indissociable from that principal supply of medical care .

Court of Justice of the European Union
Judgment of 13 March 2014 (Case C-464/12)

Sixth VAT Directive – Exemptions – Article 13B(d)(3) and (6) – Special investment funds – Occupational pension schemes – Management – Transactions concerning deposit and current accounts, payments or transfers

In this Judgment the Court of Justice states that pension funds incorporated by the people to whom the retirement benefit is to be paid, whose funds are invested using a risk-spreading principle, being the investment risk borne by the beneficiaries, are covered by the concept “management of special investment funds”.

The Court of Justice also declared that the activity of management of special investment funds, which is exempt from VAT, covers the services by means of which an undertaking establishes the rights of pension beneficiaries vis-à-vis the pension fund through the opening of accounts in the pension system and by crediting such accounts with the contributions paid, as well as the accounting and information services related to that accounts.

The Court of Justice further stated that, in this context, the VAT exemption applicable to the transactions concerning payments and transfers covers services by means of which an undertaking establishes the rights of pension beneficiaries vis-à-vis pension funds through the creation of accounts for those customers within the pension system and by crediting the beneficiaries accounts with the contributions paid, and any transactions that are ancillary to those services or that, combined with those services, form a single economic supply.

Court of Justice of the European Union
Judgment of 13 March 2014 (Case C-107/13)

Common system of value added tax – Deduction of input tax paid – Payments made on account – Refusal to allow the deduction – Fraud – Adjustment of the deduction in the case where the taxable transaction is not carried out – Conditions

In this Judgment the Court of Justice ruled in connection with a reference for a preliminary ruling on the right to deduct the VAT connected with a payment made in advance for a future supply of goods in a situation where the supply was not made, but the supplier remains liable for that tax and has not refunded the payment received in advance.

The Court of Justice states that the right to deduct VAT cannot be refused when the taxpayer did not know, and could not have known, that the supply was related to a fraud committed by the supplier, and, consequently, the tax authorities have the burden of proof on the fact that the taxpayer knew, or should have known, that the transaction relied upon as the basis for the right of deduction was connected with fraud committed by the supplier.

The Court of Justice states, however, that when the supply of the goods paid in advance is not subsequently made, a change in the elements used to determine the amount of the deduction has occurred and, therefore, the tax authorities may require the taxpayer to make an adjustment to the VAT deducted.

Court of Justice of the European Union
Judgment of 13 March 2014 (Case C-204/13)

Taxation — Value added tax — Origin and scope of the right of deduction — Dissolution of a partnership by a partner — Acquisition of a portion of the client base of that partnership — Contribution in kind to another partnership — Payment of input tax — Possible deduction

In this Judgment the Court of Justice states that the partner in a partnership of tax advisors who acquires from that partnership a portion of its client base for the sole purpose of making that client base available directly and free of charge to a newly founded partnership of tax advisors, in which he is the principal partner, so that that partnership can use that client base in its business, without that client base however becoming part of the capital assets of the newly founded partnership, is not entitled to deduct input VAT paid on the acquisition of the client base concerned.