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CJEU decision to extend VAT exemption for medical services could assist COVID-19 relief

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Switzerland has moved to clarify measures concerning VAT

Sebastiaan Wijsman and Maxine Rigot of DLA Piper Netherlands discuss the beneficial implications of the judgment in Court of Justice C-48/19 amid the COVID-19 pandemic.

The COVID-19 pandemic has led to economic and financial disruptions around the world. To mitigate the economic impact of the pandemic, governments worldwide have implemented various economic and fiscal measures to support local businesses and households for the sudden loss of income due to the crisis. Furthermore, governments have imposed stringent measures such as lockdowns to contain the pandemic, causing businesses and public organisations to invent innovative ways to supply goods and deliver services.

From a VAT perspective, one of the issues that arises is how to treat these ways of supplying goods and delivering services. One of the innovative solutions is the provision of medical services at a distance, adopted in many parts of the world to ensure the health of the medical professionals whilst maintaining efficacy. 

In a recently published judgment of the Court of Justice of the European Union (C-48/19), the court provided more clarity regarding the VAT treatment of certain medical services provided over the telephone (i.e. distance medical services). 

Facts and circumstances

A German company offered medical consultations over the phone in the name of various statutory health insurance funds. These services were provided by either nurses or medical assistants that had been trained by so-called ‘health coaches’. Recipients of the medical advice were mostly patients with a chronic or long-term disease. In more than a third of the cases, the doctors would provide second opinions or take over the consultation entirely. 

The goal of this newly introduced programme was to better manage the financial costs related to the treatment of patients, amongst others by reducing the amount of hospital admissions. The German company had requested an exemption from VAT for these activities. However, the German tax authorities considered the VAT exemption not to be applicable to these services.

Preliminary questions

Two preliminary questions were presented in court. The first question was whether medical consultations regarding various topics on health and sickness, provided over the phone and on behalf of statutory health insurance funds, should be considered an activity in the sense of the VAT exemption for medical services pursuant to Article 132, paragraph 1, sub (c) of the VAT Directive. 

The second question was whether the provision of the medical services by medical assistants and nurses, whilst doctors were only involved in one third of the cases, was considered sufficient medical qualification as required by the VAT exemption for medical services.


The court ruled that, according to Article 132, paragraph 1 sub (c) of the VAT Directive, medical services provided over the phone can also be exempted from VAT, provided that: 

a. The services can be qualified as medical care, and

b. The services are provided in the context of the practice of (para)medical professions.

Based on the court case: (i) the exact location where these medical services are provided is not considered relevant and (ii) it appears that the scope of the VAT exemption for medical services has been extended. Specifically, since Article 132, paragraph 1, sub (c) refers to medical services provided outside of a hospital, the fact that these medical services are provided over the phone is not a deterring circumstance per se. 

The judgment provides legal clarity regarding the VAT treatment of distance medical services, a concept which will occur more frequently in view of the pandemic. Furthermore, this case could possibly lead to an expansion of the interpretation of the specific VAT exemption for medical services, as it appears that the Court of Justice solely requires that the quality of the medical services can be guaranteed, and not that the service providers themselves are sufficiently qualified.


The judgment contributes to further legal certainty regarding innovative goods and services being provided (at a distance) in light of the COVID-19 crisis. In particular times of crisis, this judgment will likely benefit those seeking to expand the possibilities of digital medical care, thus facilitating the fight against the COVID-19 pandemic. 

Based on the judgment, an interesting question in the future is when and/or how the medical VAT exemption would be applicable to medical services provided through apps for example, or with the use of artificial intelligence. At time of the judgment, there appears to be a favourable stance towards innovation in the medical sector.

Sebastiaan Wijsman

T: +31 20 5419 273


Maxine Rigot

T: +31 20 5419 359


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