The activity of protecting adults lacking legal capacity carried out by a lawyer may be exempt from VAT under certain conditions, the Court of Justice of the EU (CJEU) ruled on Thursday 15 April (case C-846/19).
The services must be “closely linked to social welfare and social security” and the lawyer must be recognised as a “a body devoted to social wellbeing”, according to the CJEU. If these conditions are met, the lawyer may be exempt from VAT under the VAT Directive and its exemptions.
A district court in Luxembourg had asked the CJEU about the nature of the activity of a lawyer who provides such services, whether such activities could be characterised as “related to social assistance and social security”, and finally, whether a lawyer could be considered a “body devoted to social wellbeing”.
On the first point, the CJEU confirms that the lawyer does in fact carry out an economic activity and is therefore subject to VAT.
On the possibility of exemption, the Court states that it is possible for this type of activity. “The supply of services for the benefit of adults lacking legal capacity and intended to protect them in civil matters falls within the concept of ‘the supply of services closely linked to welfare and social security work’ within the meaning of the VAT Directive”, it detailed in its judgment.
Finally, even if the professional category of lawyers cannot be characterised, as a whole, as being devoted to social wellbeing, the Court does not exclude that a lawyer providing services closely linked to welfare and social security work may “show a stable social engagement”. However, it recalls that it is up to the Member States to set the rules for recognising the social character of a structure.
See the judgment: https://bit.ly/3wYEdgU (Original version in French by Léa Marchal)