Is VAT exemption applicable to osteopaths and chiropractors now? Counsil of ministers calls for annulment of conflicting provisions

Larissa Cobbaert   |  

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Larissa Cobbaert

Larissa is part of the Tax & Legal team.

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Application of the VAT exemption

In accordance with the law of 26 December 2015, the scope of the VAT exemption for the services of the (para)medical professions, hospital and medical care has been substantially changed.

Treatments of an aesthetic nature were excluded from the VAT exemption for medical services with effect from 1 January 2016.

In addition, the application of the VAT exemption for paramedical professions was made subject, first of all, to recognition and regulation as a paramedical profession. To benefit from the exemption, the services provided had to be included in the NIHDI nomenclature.

Since osteopaths and chiropractors are not legally recognised and regulated as paramedical professions, they were therefore excluded from the abovementioned VAT exemption.

As a result, the amendment of the law has met with a great deal of indignation, since in practice several chiropractors previously applied the exemption on the basis of a decision by the VAT administration.

Annulment appeal

Consequently, the respective professional associations lodged an annulment appeal with the Constitutional Court. The Constitutional Court then referred the subsequent prejudicial questions to the European Court of Justice in connection with the exemption for (para-)medical services.

In its judgement of 27 June 2019, the Court of Justice finally clarified that the VAT exemption for medical services may not be limited to the professions regulated by Belgian law.

Although the Member States have a certain discretion when defining the professions whose medical care is exempt from VAT and the necessary qualification requirements that must be met, this discretion is not unlimited.

In this context, the Court has therefore ruled that making the application of the exemption for medical services subject to the regulated nature of a profession is too narrow an interpretation of the European regulations. 

Temporary retention of current legislation

Furthermore, the Court of Justice has ruled against a temporary retention of current legislation in the event that the respective provisions are annulled.

In principle, therefore, practitioners can henceforth rely on the direct effect of the Court’s ruling.

We understand that, in order to confirm this ruling, the Council of Ministers has now requested that the existing Belgian VAT legislation be annulled (as part of the ongoing proceedings before the Constitutional Court). A final ruling by the Constitutional Court can be expected within a period of 3 to 6 weeks.

We have been informed that, as a result of this request, the Professional Association for Belgian Osteopaths advised its members to file a ‘nil’ return for the third quarter of 2019. This is not illogical as there is still a lot of uncertainty at the moment with regard to the VAT they have paid in the past and its possible recovery.

Moreover, we have been informed that the VAT administration has not changed its position (yet?) in light of the abovementioned jurisprudence. Consequently, they will continue to apply the existing legislation until such time as the Belgian legislature has made the necessary amendments to article 44 WBTW/CTVA, which is considered to be inconsistent. The professionals affected may not therefore anticipate the (possible) exemption of their activities.

Recovery of paid VAT

With regard to the recovery of (wrongly) paid VAT, the VAT administration has informed us that an amendment of the law in this respect will be accompanied by the necessary instructions.

Consequently, pending further clarification, it is important to safeguard your rights in any current and/or future discussions with the VAT administration and to express the necessary reservations.

Should you have additional questions concerning the above, please do not hesitate to contact us.