Brussels, 10/07/2015 (Agence Europe) - A company providing sheltered accommodation for the elderly should be exempt from VAT because it can be considered a social body providing services closely linked to social assistance, argued Advocate General Yves Bot at the European Court of Justice on Thursday 9 July.
The sixth VAT directive (77/388/EEC) foresees VAT exemptions for retirement homes, but what about sheltered accommodation? The latter are groups of accommodation units designed for one or two people and providing various types of paid services, such as a restaurant and/or bar, hairdressing, a beauty salon, a physiotherapy room, occupational therapy, dry-cleaning, a pharmacy or blood-testing in a medical unit, as is the case in the case in question (C-335/14).
Yves Bot says that sheltered accommodation should be VAT-exempt because it can be described as a body of a social nature providing services that are closely linked to social welfare in the meaning of the sixth VAT directive. This is justified above all by the fact that the housing provided is adapted for old people, although they are able-bodied and still able to live autonomously.
Member states' legal systems would have to decide whether the activities offered in sheltered accommodation are social welfare, in other words whether they aim to help people in need. They would also have to decide whether the provision of the offered services is essential for the running of sheltered accommodation. (Jan Kordys)