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Le Rayon d’Or v Ministre de l’Économie et des Finances

In Le Rayon d’Or v Ministre de l’Économie et des Finances (C-151/13 – 27 March 2014) the CJEU held that the payment of a lump sum by the national sickness insurance fund to residential care homes for the elderly constituted consideration for the supply of care and was therefore subject to VAT.

The court noted that the lump sum was received as consideration for the care provided which the homes were legally obliged to provide. The required link was therefore established and it was not broken by the fact that the consideration was provided by a person other than the recipient. Furthermore this direct link existed regardless of the fact that the lump sum did not relate to a particular service provided at a particular time at the request of a resident.

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Why it matters: The application of the VAT provisions to...

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