C-384/98

D.

OPINION OF ADVOCATE GENERAL SAGGIO delivered on 27 January 2000 *

1. In this preliminary reference, the Land- care in the exercise of the medical and esgericht St. Pölten (Austria) asks the Court paramedical professions as defined by the whether a genetic investigation carried out Member State concerned'. by a court-appointed medical expert in the context of a paternity dispute falls within the scope of the exemption provided for by Article 13A(1)(c) of the Sixth Council Directive 77/388/EEC of 17 May 1977 on the harmonisation of the laws of the Member States relating to turnover taxes — Common system of value added tax: uniform basis of assessment (herein- after 'the Sixth Directive') 1 and, if so, whether the beneficiary of that exemption is entitled to waive exemption. 3. In Austria, Paragraph 6(1) of the Umsatzsteuergesetz 1994 (Law on Turn- over Taxes, hereinafter 'the UStG') 2pro- vides: 'the following turnover falling within Paragraph 1, first and second lines, shall be exempt from tax:... turnover from activity as a doctor' (point 19) and 'transactions of small undertakings, namely undertakings resident or established in Austria whose Community and national law transactions do not exceed ATS 300 000 in the period of assessment on the basis of Paragraph 1(1), first and second lines' (point 27). Paragraph 6(3) of the UStG provides: 'an undertaking whose turnover is exempt from tax under Paragraph 2. Article 13A(1) of the Sixth Directive lists 6(1)(27) may waive, until the decision is the services and activities 'in the public definitive, application of Paragraph interest' which Member States must 6(1)(27) by a declaration in writing to the exempt, under conditions which they are tax authorities'. Court-appointed experts' to lay down, from value added tax (here- fees are fixed by the court to which the inafter 'VAT'). These include, under Arti- expert provides his services. That court cle 13A(1)(c), 'the provision of medical orders the payment of experts' fees out of money paid into court on account of costs

5. Those were the circumstances in which the Landesgericht St. Polten decided to 4. In the main proceedings the plaintiff refer the following questions to the Court: sought to establish that she was the daugh- ter of the defendant. The judge hearing the case in the Bezirksgericht St. Polten (Dis- trict Court, St. Polten) appointed Dr Rosenmayr as a medical expert with a remit to establish, on the basis of a genetic investigation, whether the applicant could '(1) Is Article 13A(1)(c) of the Sixth Coun- be the daughter of the defendant. In respect cil Directive (77/388/EEC) of 17 May of that technical investigation, Dr Rosen- 1977 on the harmonisation of the laws mayr claimed, in addition to her fee, 3VAT of the Member States relating to turn- in the sum of ATS 14 108.60, having opted over taxes to be interpreted as meaning for taxation. 4Dr Rosenmayr asserts that it that the exemption from turnover tax was only the payment of VAT on her fee laid down by that provision extends that enabled her to deduct VAT which she also to medical services which a doctor had had to pay on purchasing the materials in his capacity as a court expert necessary for her analyses and on remuner- provides on the instructions of the ating her assistants. By order of 29 May court, in particular by genetic investi- 1998, the Bezirksgericht paid Dr Rosen- gations in the context of a paternity mayr ATS 84 653, covering both her fee dispute? and the VAT. This sum was paid out of public funds. The auditor of the Bun-

3 — The level of experts' fees in Austria is governed by the Gebuhrenanspruchsgeserz of 1975. 4 — Dr Rosenmayr asserts that whilst, in a circular dated (2) If Question 1 is answered in the 9 January 1998, the Minister for Finance had maintained affirmative: Does that provision of the that any work done by a medical expert fell, in principle, within the exemption provided for by Paragraph 6(1)(19) of the UStG, this did not preclude a medical expert from opting voluntarily for the payment of VAT or from making an associated deduction of input tax. She bases her argument 5 — The auditors are authorised to bring an action against court on Paragraph 6(1)(27) and Paragraph 6(3) of the UstG. orders for the payment of fees.

6. As a preliminary point, the Austrian Arguments of the parties Government mentions the judicial author- ity of the body making the reference for a preliminary ruling. In this connection, it states that, according to Austrian law, the measure by which court-appointed experts' 8. All of the governments which have fees are paid is, as a rule, inextricably intervened propose that the first question linked with the final decision in the princi- be answered in the affirmative. The Aus- pal proceeding (being, in the present case, trian Government observes that the medical the proceedings to establish paternity). Fees services which gave rise to the dispute in must necessarily be paid before the court the main proceedings are different from hands down final judgment ruling, not only normal medical services in two respects: on the merits, but also as to which party firstly, the expert in this case provided her must pay the costs of the proceedings services on the instructions of the court, including, in particular, any costs relating rather than in the context of a contractual to any technical investigations. Accord- relationship as is normally the case; sec- ingly, in the instant case, there can be no ondly, her work was limited to establishing doubt that the body making the reference a technical fact, pure and simple, and had can be regarded as a 'court or tribunal' no connection with the provision of med- within the meaning of Article 177 of the ical care or treatment. In relation to the EC Treaty (now Article 234 EC) and that first point in particular, the Austrian Gov- the reference by the Landesgericht St. ernment also submits that the fact that an Polten is therefore admissible. expert is instructed by a court does not alter in any way the substance of the services he provides and that, consequently, there is no reason to treat such services any differently from ordinary medical services or to make them subject to different and The first question less favourable tax treatment. As far as the second point is concerned, namely the absence of any functional connection between providing expert opinion and 7. By its first question the national court curing sickness, the Austrian Government asks whether the exemption for medical maintains that the directive should be

10. The United Kingdom Government approaches the first question in two ways. It firstly queries whether paternity exam- inations fall within the scope of 'medical care' and expresses the opinion that med- ical care ought to cover every type of 9. Similarly, and again with reference to the activity that requires medical expertise, the first question, the Netherlands Government reason being that Article 13 of the Sixth maintains that medical work requested by a Directive gives a very broad definition of court should be regarded in the same way the work carried out in the medical profes- as the provision of medical care and thus sion. On that premiss, it asserts that also attract exemption from VAT, because medical care includes not only patient care the concept of medical care covers all but also all activities in areas which are not activities performed in the exercise of the closely connected with protecting or restor- medical and paramedical professions, and ing health, such as the preparation of thus also experts' investigations, because reports on the general state of health of work carried out by a doctor acting as a patients, family planning, sterilisation and court-appointed expert is, like the provi- cosmetic surgery. The common factor in all sion of medical care, in the general interest these activities is that they require particu- and therefore worthy of more favourable lar medical knowledge and skill. The tax treatment, and finally because the work United Kingdom Government reinforces of a court expert cannot be characterised that point by asserting that referring to differently from that of an expert appointed the purpose to which services are directed by private parties simply because it came in order to identify which of them should about by the decision of a judge and not by not be exempt would be to use an ambig- a contract. Finally, the Netherlands Gov- uous criterion that would be difficult to ernment stresses that to exclude the work apply. 7For example, a person could be of a court-appointed expert from the scope given the same blood test either for the of the exemption relating to medical ser- 7 — The United Kingdom Government also stressed during the oral procedure that if the Community legislature had really 6 — The stance of the Austrian authorities on the question has in wanted to define exempt activities by reference to their fact varied. A circular from the Federal Ministry of Finance purpose it would have expressly so provided. The Sixth dated 9 January 1998 specifically excluded experts' reports Directive adopts that approach for the activities referred to concerning genetics from the scope of medical services in Article 13A(1)(k) and (p), specifically for the secondment exempt from VAT. However, a second circular amended the of personnel by religious or philosophical institutions for earlier one, stating that this specific work was exempt purposes of social welfare and social security, the protection pursuant to Article 6(1)(19) of the UStG. of children, education and spiritual welfare.

purpose of identifying an illness or in the Secondly, the United Kingdom Government context of a paternity dispute; the medical queries whether any relevance should be service could be identical in both cases attached to the fact that it is a public although the applicable tax treatment authority that commissions the medical would be different. investigatory work and maintains that the exemption covers all forms of medical work and that the status, public or private, of the party commissioning the work, having no bearing on the nature of the activity, cannot be taken as a criterion for identifying possible exceptions to the gen- eral application of the exemption. In addition, the United Kingdom Govern- ment emphasises that, whilst the exemp- tions laid down by the Sixth Directive must be construed narrowly inasmuch as they create exceptions to the general applicabil- ity of VAT, it is also true that those exceptions ought not to be construed in such a way as to limit their scope, unless, of 11. Unlike the intervening States, the Com- course, there is an express indication to mission maintains that the first question that effect. should be answered in the negative. It reaches this conclusion on the basis of the assumption that the exemption at issue concerns exclusively medical services which consist in providing individuals with med- ical care or medical treatment. Investiga- tions intended solely to establish paternity do not fall within that description and consequently cannot benefit from exemp- The United Kingdom Government also tion from VAT. argues, in support of its view that the exemption applies generally, that any other interpretation would also be incompatible with the need for tax exemptions to apply simply and with certainty. This requirement is mentioned in the introductory part of Article 13A(1) of the directive where it is expressly stated that Member States shall Next, the Commission observes that the exempt certain activities 'under conditions work done by a doctor appointed to which they shall lay down for the purpose produce a medical expert's report is no of ensuring the correct and straightforward different from that done by experts in other application of such exemptions...'. It would professions (accountants, engineers or psy- not, in fact, be compatible with the objec- chologists), which certainly is not exempt tive of simplicity (straightforwardness) if from VAT. In other words, the reasons doctors were obliged to apply different which justify the levying of VAT on the fees VAT schemes according to the different of other experts must necessarily also apply activities which they may be called upon to to the fees of doctors where they act as carry out in the exercise of their profession. experts.

Substance

14. The Court of Justice has already had 12. In order to answer the question under occasion to consider the exemption in consideration it is necessary first to estab- question several times. Beginning with its lish whether genetic tests fall within the concept of 'the provision of medical care in the exercise of the medical and paramedical 9 — Eleventh recital in the preamble to the Sixth Directive. The professions' used in Article 13A(1)(c) of the content of this recital implies a wish to ensure that the scope of application of the exemptions does not differ from one Sixth Directive. Only if that question is Member State to another. 10 — Article 13A in fact bears the heading 'Exemptions for certain activities in the public interest'. 11 — The following are also exempted under Article 13A(1)(d): 8 — See Article 2(1) of the directive. supplies of human organs, blood and milk.

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D.

15. What emerges most clearly from the case-law cited above is that it is possible to limit the exemption for medical care to services provided by doctors to persons to Furthermore, in two other judgments the the exclusion of supplies of medicines or Court has considered the very exemption other goods (unless the supply of goods is laid down by Article 13A(1)(c), upon inextricably linked with the service provi- which the present case turns, defining its ded). Having said that, in order to answer meaning and scope. In Commission v the first question, it remains to be estab- Italy, 14 the Court held that the exemption lished whether, as the Commission main- for medical services must be understood in tains, medical services which are not linked the sense that it covers only 'care adminis- to the prevention, diagnosis or treatment of tered "to persons" and that that limitation illness must also be exempted. Falling unambiguously excludes care administered within this category are genetic tests to animals from the scope of Arti- designed solely to establish paternity, which cle 13A(1)(c)'. In Commission v United are the express concern of the first question Kingdom, the Court held that it follows of the Austrian court. from the position of the provision in question, that is to say 'directly following the indent concerning hospital care' (indent (b)) 'and from its context, that the services involved are provided outside hospitals and similar establishments and within the fra- 16. The literal wording of the provision mework of a confidential relationship gives it to be understood that the exemp- tion does not cover this last category of services. With the exception of the Italian 12 — Case 348/87 Stichting Uitvoering Financiële Acties v version which uses the broad expression Staatssecretaris van Financiën [1989] ECR 1737, para- graph 13. Sec also the judgment in Case C-2/95 SDC 1997] ECR I-3017, paragraphs 20 and 21. 13 — See Case 107/84 Commission v Germany [1985] 15 — Case 353/85 Commission v United Kingdom [1988] ECR 2655, paragraph 20. ECR 817, paragraph 33. 14 — Case 122/87 Commission v Italy [1988] ECR 2685, para- 16 — Commission v United Kingdom, cited above, para- graph 9. graphs 33, 34 and 35.

'prestazioni mediche' (or medical services), VAT, the references to care of the person all of the other versions, albeit using which feature in the provision at issue different words, refer in a quite explicit make it fairly clear that the exemption is way exclusively to the provision of services justified by the need to reduce medical costs in relation to the health of persons. Thus, and thus to promote access to health-care. the German version, which refers to 'Heil- Were a different approach to be taken, if, in behandlungen' 17 (therapeutic treatment), other words, the exemption were to be and the French version, which uses the considered applicable to all professional expression 'prestations de soins a la per- activities carried out by doctors, the scope sonne' (providing care to persons), of application of the provision would expressly refer to the provision of medical broaden in favour of activities which have help to individuals. Furthermore, expres- no connection with the health of human sions having the same meaning are to be beings and quite different situations and found in the English, Danish, Dutch, interests would be treated in the same way Greek, Finnish, Swedish, 18 Spanish and without good reason.

gists. It would therefore be unjust to apply the exemption to the expert evidence of doctors and not to the analogous activities Next, if one considers the reasons why the of other professionals. The exemptions are provision of medical care is exempt from exceptions to the rule that VAT applies generally and they must therefore be inter- preted narrowly. 17 — More precisely 'Heilbehandlungen im Bereich der Human- medizin' (therapeutic treatment in the field of human medicine). 18 — The English version uses the following formula of words: 'the provision of medical care in the exercise of the medical and paramedical professions as defined by the Member State concerned'. The Danish version uses the term: 'behandling af personer', the Dutch version: 'gezondheids- kundige verzorging van de mens', the Greek version: 'iatrikis perithalpsios', the Finnish version: 'lääketieteelli- sen hoidon antaminen henkilölle' and the Swedish version: 'sjukvãrdande behandling'. 19 — Respectively: 'asistencia a personas físicas' and 'prestações de servidos de assistencia'. 20 — Case 173/88 Henriksen [1989] ECR 2763, paragraphs 10 and 11, and SDC, cited above, paragraph 22.

. . be vides precise dicta in favour of a restrictive interpreted by reference to the purpose and general scheme of the rules of which it forms part'. interpretation of the exemption. In Com-

I do not think that that conclusion can be influenced by the fact that, because the exemption is centred on the therapeutic function of the medical care, restrictive interpretation of the exemption requires the nature of the service to be established on a case by case basis for the purpose of levying Next, as regards that part of the first VAT. It is true that, in fiscal matters, the question which specifically mentions the existence of clear and objective criteria for fact that the professional providing the the levying or non-levying of tax must be medical services was acting as a court- taken into account and it is also true that appointed expert as a possible ground for this requirement is reflected in the intro- application of the exemption, once it has ductory part of Article 13A(1) which been decided that genetic tests designed to emphasises the need for 'correct and establish paternity, to which the question straightforward application of such exemp- explicitly refers, do not fall within the tions'. It does not, however, seem to me category of medical care to persons, it that restrictive interpretation of the exemp- becomes meaningless to express a view on tion gives rise to practical difficulties if one whether or not the public nature of the takes the provision of medical care to body which commissions the expert has any bearing on the application of the exemption. In any event, I do not think 21 — See paragraph 33. that this factor can have any influence in

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OPINION OF MR SAGGIO — CASE C-384/98

establishing the scope of the exemption. In Arguments of the parties that regard, only the nature and purpose of the service are decisive, as I have already explained at some length.

18. It may be recalled that, by its second question, the Austrian court asks whether Article 13A(1)(c) of the Sixth Directive The United Kingdom Government argues, precludes application of a provision of in particular, that the exemptions laid national law which allows doctors to waive down by the directive are mandatory in the exemption provided for by that provi- all of the Member States and that only sion. specific Community provisions, which in any event do not exist in this case, are capable of authorising derogations and, in particular, permitting the exemption under Article 13A(1)(c) to be waived. The United Kingdom Government also observes that, I would begin by saying that, having in this instance, to give the Member States a answered the first question in the negative, choice (or to allow interested parties a I shall express a view on the second only in the alternative, that is to say, in the event that the Court answers the first question in 22 — The circular in question replaced a previous circular dated 4 December 1996 which excluded genetic tests from the the affirmative. list of exempt activities.

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Substance

22. The answer to the second question must therefore be that the mandatory 21. As regards the substance of the ques- nature of the exemptions precludes the tion, I take the view that the exemptions application of a national provision which, under certain conditions, allows doctors to 23 — Case C-194/94 CIA Security International [1996] waive the exemption laid down by the ECR I-2201, paragraph 20. provision in question.

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Conclusion

23. In the light of all the foregoing considerations, I propose that the Court answer the questions put by the Landesgericht St. Pölten as follows: