Brussels, 11/03/2016 (Agence Europe) - There is nothing to stop the member states of the EU from applying VAT to the services provided by lawyers, even if this considerably increases the cost of these services, Advocate General Eleanor Sharpston concluded, before the Court of Justice of the EU, on Thursday 10 March.
Sharpston presented her conclusions in the framework of a case (C-543/14) concerning Belgium. Since 1 January 2014, this member state has applied VAT (21%) to the services provided by lawyers. Services aimed at the poorest members of society in the framework of legal aid, on the other hand, are covered by a 0% rate.
A number of orders of lawyers, associations and individuals from Belgium took the matter before the Constitutional Court of the Kingdom. This court approached the Court of Justice to ask whether subjecting lawyers' services to VAT and the ensuing increase in costs for these services were compatible with the right to effective recourse and, in particular, the right to the assistance of a lawyer.
The Belgian Court also had questions relating to the principle of equality of arms, as this increase in costs does not affect people who are able to deduct the VAT paid for these services - usually professionals, such as companies, which are themselves subject to VAT - but which do hit other parties, specifically individuals.
Reiterating the fact that the right to access justice is not absolute, the Advocate General concluded that even a somewhat significant increase in the cost of the services of lawyers does not call this measure into question. This measure is proportionate with regard to the objectives pursued, which are legitimate (budgetary objectives, desire to come into line with the practice in other member states and putting an end to competition distortion).
As the principle of equality of arms is also not absolute, the Advocate General rejected this argument. She pointed out that a certain level of inequality of arms due to differences in the ability to pay for these services could and even should be tolerated. This inequality may be offset by the member states through the legal aid regime, she said. (Original version in French by Jan Kordys)
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