In Finanzamt Leverkusen v Verigen Transplantation Service International AG (ECJ Case C-156/09), a German biotechnology company extracted cells from patients’ joint cartilages, multiplied them in a laboratory, and prepared them for reintegration into the patients’ bodies. The tax authority issued an assessment charging VAT on such supplies, and the company appealed, contending first that the supplies were exempt under Article 13A1(c) of the EC Sixth Directive, and alternatively that they fell within the derogation in Article 28b(F).
The case was referred to the ECJ. Advocate-General Sharpston found in favour of the company, holding that ‘the removal of joint cartilage cells from biopsy cartilage material taken from a human being and their subsequent multiplication, with a view to reimplantation for therapeutic purposes’ constituted the ‘provision of medical care’ within Article 13A1(c), so that the company’s supplies were exempt from VAT.
Why it matters: It seems likely that the ECJ will follow Advocate-General Kokott’s Opinion. The Spanish Government submitted that the services were only ‘routine laboratory processes’ and were not ‘medical care’, suggesting that Spanish VAT practice is out of line with this Opinion.
In Finanzamt Leverkusen v Verigen Transplantation Service International AG (ECJ Case C-156/09), a German biotechnology company extracted cells from patients’ joint cartilages, multiplied them in a laboratory, and prepared them for reintegration into the patients’ bodies. The tax authority issued an assessment charging VAT on such supplies, and the company appealed, contending first that the supplies were exempt under Article 13A1(c) of the EC Sixth Directive, and alternatively that they fell within the derogation in Article 28b(F).
The case was referred to the ECJ. Advocate-General Sharpston found in favour of the company, holding that ‘the removal of joint cartilage cells from biopsy cartilage material taken from a human being and their subsequent multiplication, with a view to reimplantation for therapeutic purposes’ constituted the ‘provision of medical care’ within Article 13A1(c), so that the company’s supplies were exempt from VAT.
Why it matters: It seems likely that the ECJ will follow Advocate-General Kokott’s Opinion. The Spanish Government submitted that the services were only ‘routine laboratory processes’ and were not ‘medical care’, suggesting that Spanish VAT practice is out of line with this Opinion.
