Provisional text

JUDGMENT OF THE COURT (Seventh Chamber)

11 May 2023 (*)

(Reference for a preliminary ruling – Common system of value added tax (VAT) – Directive 2006/112/EC – Article 132(1)(g) – Exemption for the supply of services closely linked to welfare and social security work, by bodies recognised by the Member State concerned as being devoted to social wellbeing – Supply of services provided to a non-taxable person in a Member State other than that in which the supplier is established – Assessment of the nature of the services and the condition of being a body recognised as being devoted to social wellbeing – Determination of the relevant national law – Concept of ‘Member State concerned’)

In Case C‑620/21,

REQUEST for a preliminary ruling under Article 267 TFEU from the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria), made by decision of 27 September 2021, received at the Court on 6 October 2021, in the proceedings

MOMTRADE RUSE OOD

v

Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite,

THE COURT (Seventh Chamber),

composed of M.L. Arastey Sahún (Rapporteur), President of the Chamber, F. Biltgen and J. Passer, Judges,

Advocate General: J. Kokott,

Registrar: A. Calot Escobar,

having regard to the written procedure,

after considering the observations submitted on behalf of:

–        the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite, by S. Petkov,

–        the European Commission, by D. Drambozova and J. Jokubauskaitė, acting as Agents,

after hearing the Opinion of the Advocate General at the sitting on 1 December 2022,

gives the following

Judgment

1        This request for a preliminary ruling concerns the interpretation of Article 132(1)(g) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2008/8/EC of 12 February 2008 (OJ 2008 L 44, p. 11) (‘the VAT Directive’).

2        The request has been made in proceedings between MOMTRADE RUSE OOD (‘Momtrade’) and the Direktor na Direktsia ‘Obzhalvane i danachno-osiguritelna praktika’ Varna pri Tsentralno upravlenie na Natsionalnata agentsia za prihodite (Director of the ‘Appeals and Tax/Social Insurance Practice’ Directorate, for the city of Varna, within the Central Administration of the National Revenue Agency, Bulgaria) (‘the Direktor’) relating to a value added tax (VAT) assessment notice.

 Legal context

 EU law

 The VAT Directive

3        Article 45 of the VAT Directive states:

‘The place of supply of services to a non-taxable person shall be the place where the supplier has established his business. However, if those services are provided from a fixed establishment of the supplier located in a place other than the place where he has established his business, the place of supply of those services shall be the place where that fixed establishment is located. In the absence of such place of establishment or fixed establishment, the place of supply of services shall be the place where the supplier has his permanent address or usually resides.’

4        Title IX of the VAT Directive relates to VAT exemptions.

5        Chapter 1 of Title IX, entitled ‘General provisions’, includes Article 131 of the Directive, according to which:

‘The exemptions provided for in Chapters 2 to 9 shall apply without prejudice to other Community provisions and in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse.’

6        Chapter 2 of Title IX, entitled ‘Exemptions for certain activities in the public interest’, comprises Articles 132 to 134 of the VAT Directive.

7        Article 132(1)(g) of the VAT Directive provides:

‘Member States shall exempt the following transactions:

…

(g)      the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other bodies recognised by the Member State concerned as being devoted to social wellbeing.’

8        Article 133 of the directive reads as follows:

‘Member States may make the granting to bodies other than those governed by public law of each exemption provided for in points (b), (g), (h), (i), (l), (m) and (n) of Article 132(1) subject in each individual case to one or more of the following conditions:

(a)      the bodies in question must not systematically aim to make a profit, and any surpluses nevertheless arising must not be distributed, but must be assigned to the continuance or improvement of the services supplied;

(b)      those bodies must be managed and administered on an essentially voluntary basis by persons who have no direct or indirect interest, either themselves or through intermediaries, in the results of the activities concerned;

(c)      those bodies must charge prices which are approved by the public authorities or which do not exceed such approved prices or, in respect of those services not subject to approval, prices lower than those charged for similar services by commercial enterprises subject to VAT;

(d)      the exemptions must not be likely to cause distortion of competition to the disadvantage of commercial enterprises subject to VAT.

…’

9        Article 134 of the same directive reads as follows:

‘The supply of goods or services shall not be granted exemption, as provided for in points (b), (g), (h), (i), (l), (m) and (n) of Article 132(1), in the following cases:

(a)      where the supply is not essential to the transactions exempted;

(b)      where the basic purpose of the supply is to obtain additional income for the body in question through transactions which are in direct competition with those of commercial enterprises subject to VAT.’

 Directive 2008/8

10      Recitals 3 and 5 of Council Directive 2008/8/EC of 12 February 2008 amending Directive 2006/112/EC as regards the place of supply of services (OJ 2008 L 44, p. 11), state:

‘(3)      For all supplies of services the place of taxation should, in principle, be the place where the actual consumption takes place. If the general rule for the place of supply of services were to be altered in this way, certain exceptions to this general rule would still be necessary for both administrative and policy reasons.

…

(5)      Where services are supplied to non-taxable persons, the general rule should continue to be that the place of supply of services is the place where the supplier has established his business.’

 Bulgarian law

 The Constitution of the Republic of Bulgaria

11      Article 26(2) of the Constitution of the Republic of Bulgaria provides:

‘Foreigners residing in the Republic of Bulgaria shall be vested with all rights and obligations proceeding from this Constitution, except those rights and duties for which Bulgarian citizenship is required by this Constitution or by another law.’

 The Tax and Social Security Code of Procedure

12      Article 122(1) of the Danachno-osiguritelen protsetsualen kodeks (Tax and Social Security Code of Procedure) in the version applicable to the facts of the main proceedings, states:

‘The tax administration may apply the amount of tax determined in accordance with the relevant law under the tax base referred to in paragraph 2 that it determines itself, in the following circumstances:

…

3.      where false or inaccurate documents were used in the accounts;

4.      in the absence of accounts kept in accordance with the [Zakon za schetovodsvoto (Law on accounting)], where accounts are not submitted or where the taxable amount cannot be determined from the accounts submitted and where the necessary documentation for determining the taxable amount or calculating outstanding social security contributions have been irregularly destroyed.

…’

 The ZDDS

13      Under Article 21(1) of the Zakon za danaka varhu dobavenata stoynost (Law on value added tax) (DV No 63 of 4 August 2006), in the version applicable to the facts of the main proceedings (‘the ZDDS’):

‘Where the customer is a non-taxable person, the place of supply of services is the place where the supplier has established his independent economic activity.’

14      Article 38 of the ZDDS reads as follows:

‘(1)      Exempt transactions are those referred to in this chapter.

(2)      Intra-Community transactions that are exempt under the present chapter, where they are carried out in the national territory, are also exempted.

(3)      Any intra-Community acquisition of goods whose delivery in the national territory is exempted under the present chapter is also exempt from the tax.

…’

15      Article 40 of the ZDDS provides:

‘An exempt transaction is:

1.      the supply of social services within the meaning of the [Zakon za sotsialnoto podpomagane (Law on social assistance)];

…’

16      Article 67 of the ZDDS provides:

‘(1)      The amount of the tax is determined by multiplying the taxable amount by the tax rate.

(2)      Where, during the negotiation of the transaction, it is not explicitly stated that the tax is separately payable, it is considered as being included in the agreed price.

(3)      The tax is also considered as being included in the price stated in the case of the provision of goods subject to a supply in retail trade.

…’

 The ZSP

17      Article 16 of the Zakon za sotsialno podpomagane (Law on social assistance) (DV No 56 of 19 May 1998), in the version applicable to the facts of the main proceedings (‘the ZSP’), states:

‘(1)      The supply of social services are based on social work centred on care of the person for:

1.      the carrying out of day-to-day activities;

2.      social inclusion.

(2)      The social services are provided on the basis of an individual assessment of the needs and taking account of the wishes and personal choices of the person.

…’

18      Article 18 of the ZSP provides, in the version applicable to the facts of the main proceedings:

‘(1)      Social services are provided by:

1.      the State;

2.      the municipal authorities;

3.      Bulgarian natural persons, registered in accordance with the [Targovski zakon (Commercial Code)], and legal persons;

4.      natural persons carrying out a commercial activity and legal persons registered according to the law of another Member State of the European Union or of another Member State of the European Economic Area [(EEA)].

(2)      Persons referred to in points 3 and 4 of paragraph 1 may only provide social services upon entry in the register of the [Agentsia za sotsialno podpomagane (Agency for social assistance)].

(3)      Persons referred to in points 3 and 4 of paragraph 1 may provide social services for children up to the age of 18 years upon being granted a licence and entry in the register referred to in paragraph 2.

(4)      the detailed rules for registration are set out by the implementing regulations of the law.’

19      Paragraph 1 of the supplemental provisions of the ZSP, in the version applicable to the facts of the main proceedings, provides:

‘Under the present law, the following definitions shall apply:

…

6.      “social services” means activities to support people and increase their opportunities to lead an independent life; they are carried out by specialised institutions and in the community;

7.      “social services in the community” means services provided within a family or family related environment.

…’

 ZSP Implementing Regulations

20      Article 40 of the Pravilnik za prilagane na ZSP (ZSP Implementing Regulations), in the version applicable to the facts of the main proceedings, states:

‘(1) Persons wishing to avail themselves of social services must submit a written request in accordance with where they are currently residing, respectively to:

1.      the director of the social assistance service, for the social services falling within the delegated activities of the State in accordance with Annex No 9;

2.      the mayor of the municipal district, for the social services falling within the municipality;

3.      the managing body where the supplier of social services is a natural person, registered in accordance with the Commercial Code, or a legal person.

(2)      The following shall be attached to the application referred to in paragraph 1:

1.      an identity document (for reference);

2.      a copy of their personal medical file, if available;

3.      a copy, if available, of a decision of the Lekarska consultativna comitsia (LKK) [Consultative medicines commission (LKK)], of the Teritorialna ekspertna lekarska comitsia (TELK) [Expert commission on local health (TELK)], of the Natsionalna ekspertna lekarska comitsia (NELK) [Expert commission on national health (NELK)].

(3)      The supplier of social services may, if necessary, request other documents.

(4)      On the basis of the accompanying documents, as well as in the cases referred to in Article 27(7), the authority referred to in points 1 to 3 of paragraph 1, within 20 days, makes a social services needs assessment of the person, in accordance with Annex No 10, and records it in a project report consistent with the model contained in Annex No 8. In the cases referred to in Article 27(7) the person submits their request after the social assessment.

…’

21      Article 40d of those regulations reads as follows:

‘(1)      The suppliers of social services set out an individual plan upon evaluating the needs of each recipient and the definition of the objectives to be attained.

(2)      The plan referred to in paragraph 1 comprises activities to meet:

1.      day-to-day needs;

2.      healthcare needs;

3.      education needs;

4.      rehabilitation needs;

5.      needs in relation to free time;

6.      needs in relation to contact with family, friends, relatives and other persons.

…’

22      Article 40e of those regulations provides:

‘(1)      The supplier of social services shall keep a client register.

(2)      The register shall contain the following information:

1.      the name, domicile and/or current address, date of birth and family situation of the recipients;

2.      the measure on accommodation or admission to the social service;

3.      the name, domicile and/or current address and phone number of a guardian, a curator or a close parent of the recipients;

4.      the name, address and telephone number of the medical practitioner of the recipients;

5.      the date of accommodation or admission to the social service;

6.      the date of leaving;

7.      the date, time and cause of death where the recipient died in a specialised establishment or where it relates to a social supply in the community.

(3)      The supplier shall keep a numbered, sealed and stamped book with the stamp of the specialised institution containing:

1.      the inventory of money and items of value provided by residents for safe-keeping;

2.      the date on which the money and items of value were lodged;

3.      the date on which an amount of money or items of value were returned to the residents or were used in their name, at their request, as well as the use made of them;

4.      the name and role of the person responsible for the safe-keeping of the money and other items of value.’

 The dispute in the main proceedings and the questions referred for a preliminary ruling

23      Momtrade is a limited liability company established in the territory of the Republic of Bulgaria. That company is registered for VAT in that Member State since 24 June 2014. In addition, it is registered with the social assistance agency as a supplier of social services and has certificates of registration for personal care, welfare and home help for elderly people.

24      The recipients of the services supplied by Momtrade are elderly people living in Germany and Austria. In accordance with the contracts concluded between that company and its clients, the supply of services consists in the provision of care to individuals and home help services. The various obligations of the supplier are described in detail in a questionnaire annexed to the contracts drawn up by an agency registered in Germany or Austria that is responsible for finding clients and referring them to the company. Those obligations include home help and home care for elderly people suffering from health issues.

25      In the course of an audit carried out by the Bulgarian tax authorities concerning the period from 24 June 2014 to 31 December 2015, the Bulgarian tax authorities considered that as services supplied by Momtrade had been actually carried out on the territories of the Federal Republic of Germany and the Republic of Austria, in order to rely on the VAT exemption under Article 40(1) of the ZDDS, that company had to submit evidence demonstrating the social wellbeing, in accordance with German and Austrian legislation, of the supply of services in the territory of those Member States during that period.

26      The Bulgarian tax authorities, having found that Momtrade had not submitted such evidence, issued a notice of assessment on 4 October 2018 in relation to that company establishing a VAT debt for that period. That notice was confirmed by the Direktor.

27      Momtrade brought an appeal before the Administrativen sad Ruse (Administrative Court, Ruse, Bulgaria) to challenge the notice of assessment referred to in the preceding paragraph. That court reduced the amount of the debt set out in that notice while confirming the remainder of the notice. In that context, after finding that Article 40(1) of the ZDDS had transposed Article 132(1)(g) of the VAT Directive, the Administrativen sad Ruse (Administrative Court, Ruse) confirmed the lack of social wellbeing of the services provided by MOMTRADE in the territories of the Federal Republic of Germany and the Republic of Austria on the ground that that company had not produced official documents issued by the competent authorities of those Member States demonstrating social wellbeing.

28      The judgment given by the Administrativen sad Ruse (Administrative Court, Ruse) was the subject of two appeals brought, respectively, by the Direktor and by Momtrade before the referring court, the Varhoven administrativen sad (Supreme Administrative Court, Bulgaria).

29      That court states that, in accordance with its case-law, Article 132(1)(g) of the VAT Directive must be interpreted as meaning that it does not oblige Member States to exempt supplies of social services carried out for nationals of another Member State outside of their territory. That interpretation is based on Article 26(2) of the Constitution of the Republic of Bulgaria.

30      The referring court takes the view that, first, in order to attain the objective pursued by Article 132 of the VAT Directive, it is irrelevant whether the suppliers and recipients of services capable of being exempted from VAT remain or are established in the territory of one Member State or of two Member States.

31      Secondly, in so far as the recipients of the supply of services are natural persons, namely non-taxable persons, the place of supply of those services is the place where the supplier has established its business, in the present case the territory of the Republic of Bulgaria. Accordingly, if the interpretation of Article 132(1)(g) of the VAT Directive found by the Varhoven administrativen sad (Supreme Administrative Court) were correct, the suppliers of social services established in Bulgaria would be subject to a difference in tax treatment according to whether they supply services in the territory of the Republic of Bulgaria or in the territory of another Member State to the benefit of foreign nationals, which, in the opinion of the referring court, appears unacceptable, even in the absence of full fiscal harmonisation in VAT.

32      In those circumstances, the Varhoven administrativen sad (Varhoven Administrative Court) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:

‘(1)      Can Article 132(1)(g) of the VAT Directive be interpreted as meaning that it allows a commercial company registered as a social service provider in one Member State (in this case, [the Republic of] Bulgaria) to rely on that provision in order to obtain a tax exemption for the social services which it provides in the territory of other Member States to [natural persons] who are nationals of those States? Is the answer to that question affected by the fact that the recipients of the services were referred to the provider by commercial companies registered in the Member States in which the services are provided?

(2)      If Question 1 is answered in the affirmative, by what criteria and law (Bulgarian and/or Austrian and German law) is it necessary to assess, for the purposes of the interpretation and application of the aforesaid provision of EU law, whether the company audited is an “[body] recognised as being devoted to social wellbeing” and whether it has been proven that the services are “closely linked to welfare and social security work”?

(3)      Based on that interpretation, does the fact that a commercial company is registered as a provider of social services, as defined by national law, suffice in order for that company to be classed as a [body] “recognised by the Member State concerned as being devoted to social wellbeing”?’

 Admissibility of the request for a preliminary ruling

33      The Direktor challenges the admissibility of the present request for a preliminary ruling on the grounds that, first, the replies to the questions submitted by the referring court do not leave any doubt, with regard not only to the clarity of Articles 132 and 133 of the VAT Directive but also to the case-law of the Court regarding those provisions and, secondly, that those questions are hypothetical.

34      In that regard, it should be noted, in the procedure established by Article 267 TFEU, it is solely for the national court before which the action has been brought, and which must assume responsibility for the subsequent judicial decision, to determine, in the light of the particular circumstances of the case, both the need for a preliminary ruling enabling it to deliver its judgment and the relevance of the questions which it submits to the Court. Consequently, where the questions referred by the national court concern the interpretation of EU law, the Court is, in principle, bound to give a ruling. The Court may refuse to rule on a question referred by a national court for a preliminary ruling only where it is quite obvious that the interpretation of EU law that is sought bears no relation to the actual facts of the main proceedings or its purpose, where the problem is hypothetical, or where the Court does not have before it the factual or legal material necessary to give a useful answer to the questions submitted to it (judgment of 31 January 2023, Puig Gordi and Others, C‑158/21, EU:C:2023:57, paragraphs 50 and 51 and the case-law cited).

35      In the present case, the questions raised by the referring court, which are raised in proceedings between a company and a national tax authority refusing to exempt that company from VAT under Article 132(1)(g) of the VAT Directive, relate to that exemption’s conditions of application and, in particular, to the interpretation of the concepts of ‘organisations recognised as being devoted to social wellbeing’ and ‘services … closely linked to welfare and social security work’, within the meaning of that provision, in order to enable the referring court to determine whether the supply of services by that company are VAT exempt and to rule thus on the lawfulness of the tax notice at issue in the main proceedings.

36      In those circumstances, it does not appear that the interpretation of EU law that is sought bears any relation to the actual facts of the dispute in the main proceedings or its purpose, nor that the problem raised by the referring court is hypothetical, as the Court has before it the factual and legal material necessary to give a useful answer to the questions submitted to it.

37      The fact that, according to the Direktor, the interpretation of Article 132(1)(g) of the VAT Directive does not leave any room for doubt and does not have any bearing on the admissibility of those questions.

38      As the Court has already held, even if the reply to the questions referred does not leave room for any reasonable doubt, those questions do not for that reason become inadmissible (judgment of 27 March 2014, Consejería de Infraestructuras y Transporte de la Generalitat Valenciana and Iberdrola Distribución Eléctrica, C‑300/13, not published, EU:C:2014:188, paragraph 18 and the case-law cited).

39      It follows that the request for a preliminary ruling is admissible.

 Consideration of the questions referred

 The first question

40      By its first question, the referring court asks, in essence, first, whether Article 132(1)(g) of the VAT Directive must be interpreted as meaning that the supplies of social services provided to natural persons residing in a Member State other than that where the supplier has established its business are capable of being exempted under that provision and, secondly, whether the fact that that supplier has had recourse to a company established in that other Member State to contact its clients has a bearing on that interpretation.

41      Under Article 132(1)(g) of the VAT Directive, Member States exempt the supply of services and of goods closely linked to welfare and social security work, including those supplied by old people’s homes, by bodies governed by public law or by other bodies recognised by the Member State concerned as being devoted to social wellbeing.

42      In accordance with settled case-law of the Court, in interpreting a provision of EU law, it is necessary to consider not only its wording but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 7 April 2022, I (VAT exemption for hospital services), C‑228/20, EU:C:2022:275, paragraph 33 and the case-law cited).

43      In that regard, in the first place, it follows from the wording of Article 132(1)(g) of the VAT Directive that the benefit of an exemption referred to in that provision is subject to two cumulative conditions, namely, first, that concerning the nature of the services provided, which must be closely linked to welfare and social security work, and, secondly, that concerning the supplier of the services, which must be a body governed by public law or another body recognised as being devoted to social wellbeing by the Member State concerned.

44      Article 132(1)(g) of the VAT Directive does not, therefore, make the granting of the exemption concerned dependent on any condition relating to the place where the supply of services referred to in that provision must be actually carried out. Furthermore, that provision does not make the benefit of such an exemption dependent on the condition that the supplier and customer of those services are established in the same Member State.

45      In those circumstances, it cannot be inferred from the terms of Article 132(1)(g) of the VAT Directive that, where the services are actually carried out in a Member State other than that where the supplier established its business, the services referred to in that provision are excluded from the benefit of exemption provided for by that provision.

46      In the second place, as regards the context of which Article 132(1)(g) of the VAT Directive forms part, that provision is to be found in Chapter 2 entitled ‘Exemptions for certain activities in the public interest’, of Title IX of that directive, that contains Articles 132 to 134 of that directive. The heading of that chapter indicates that it is the public interest nature of transactions referred to in that chapter that is the aspect considered by the EU legislature as being the decisive factor for the purpose of exempting transactions from VAT. The fact that those transactions are actually carried out in the territory of one Member State more than another Member State is not relevant to that public interest nature.

47      Furthermore, it should be recalled, first, that the first subparagraph of Article 133 of the VAT Directive makes the granting by Member States of the exemption provided for in Article 132(1)(g) of that directive subject to one or more of the conditions referred to therein, conditions that relate to the objectives pursued by private bodies supplying the services covered by that exemption, their management and prices charged by those bodies.

48      Secondly, Article 134 of the VAT Directive excludes from the benefit of the exemption the supply of services provided for in Article 132(1)(g) of the VAT Directive where the supply of services is not essential to the transactions covered by welfare and social security work or where the basic purpose of the supply is to obtain additional income for the body in question through transactions which are in direct competition with those provided by commercial enterprises subject to VAT.

49      Since Articles 133 and 134 of the VAT Directive do not provide for restrictions as regards the place where the supply of services concerned are actually carried out, the Member States cannot have the right to exclude from the benefit of the exemption the supply of services provided for in Article 132(1)(g) of the VAT Directive where they are actually carried out in a Member State other than that where the supplier is established (see, by analogy, judgment of 19 December 2013, Bridport and West Dorset Golf Club, C‑495/12, EU:C:2013:861, paragraph 27 and the case-law cited).

50      As regards, in the third place, the objective of the exemption provided for in Article 132(1)(g) of the VAT Directive, it is intended, by treating certain supplies of public-interest services in the social sector more favourably for purposes of VAT, to reduce the cost of those services and thus to make them more accessible to the individuals who may benefit from them (judgment of 8 October 2020, Finanzamt D, C‑657/19, EU:C:2020:811, paragraph 29 and the case-law cited).

51      An interpretation of Article 132(1)(g) of the VAT Directive restricting the scope of the exemption that it sets out to solely supplies of services actually carried out in the Member State where the supplier is established would be contrary to the objective set out in the preceding paragraph provided that the supply of services satisfies the two conditions referred to in that provision, provided in a Member State other than that where the supplier is established to people in need of assistance or care, are subject to VAT, which would necessarily have the effect of increasing the cost of the services concerned, accordingly making it more difficult for those people to have access to those services.

52      Accordingly, it follows from a literal, systematic and teleological interpretation of Article 132(1)(g) of the VAT Directive that the exemption provided for in that provision applies to any supply of services satisfying the two conditions stated in that provision and recalled in paragraph 43 of the present judgment, without regard to whether such a supply is actually carried out in the Member State where the supplier is established or in another Member State.

53      Finally, it follows from the foregoing considerations that a supplier who carries out services closely linked to welfare and social security work and that are provided to natural persons residing in a Member State other than where that supplier is established, had recourse to an intermediary established in that other Member State to contact its clients is irrelevant for the purpose of determining whether the supply of services at issue can be exempted under Article 132(1)(g) of the VAT Directive.

54      As the European Commission has noted, in such a case, the supply of services closely linked to welfare and social security work provided by the supplier to natural persons, on the one hand, and the supply of services provided by the intermediary called for by the supplier, on the other hand, are separate and independent transactions that must therefore be assessed separately and be subject to a different tax treatment.

55      Having regard to the foregoing considerations, the answer to the first question is that Article 132(1)(g) of the VAT Directive must be interpreted as meaning that, first, the supplies of social services provided to natural persons residing in a Member State other than that where the supplier has established its business are capable of being exempted under that provision and, secondly, it is irrelevant in that regard whether that supplier has had recourse to a company established in that other Member State to contact its clients.

 The second question

56      By its second question, the referring court asks, in essence, whether Article 132(1)(g) of the VAT Directive must be interpreted as meaning that, where a company provides the supply of social services to natural persons residing in a Member State other than that where that company established its business, the nature of those supplies and the characteristics of that company for the purpose of determining whether those supplies fall within the concept of ‘services … closely linked to welfare and social security work … by … [a body recognised] by the Member State concerned as being devoted to social wellbeing’, within the meaning of that provision, must be examined in accordance with the law of the Member State where the company has established its business or in accordance with the law of the Member State where the supplies at issue are actually carried out.

57      It should be recalled that the exemptions referred to in Article 132 of the VAT Directive constitute autonomous concepts of EU law which have the purpose of avoiding divergences in the application of the VAT system from one Member State to another (judgment of 28 April 2022, Happy Education, C‑612/20, EU:C:2022:314, paragraph 27 and the case-law cited), and that the same is true concerning the specific conditions laid down for those exemptions to apply and the concepts and terms used to specify those conditions (see, to that effect, judgments of 26 May 2005, Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraphs 23 and 27, and of 5 October 2016, TMD, C‑412/15, EU:C:2016:738, paragraphs 24 and 25).

58      As the Court has already held, although the introductory sentence of Article 131 of the VAT Directive states that Member States are to lay down the conditions for exemptions in order to ensure the correct and straightforward application of the exemptions and to prevent any possible evasion, avoidance or abuse, those conditions cannot affect the definition of the subject matter of the exemptions envisaged (judgment of 26 May 2005, Kingscrest Associates and Montecello, C‑498/03, EU:C:2005:322, paragraph 24 and the case-law cited).

59      As regards, in the first place, the requirement referred to in Article 132(1)(g) of the VAT Directive that the supply of services must be closely linked to welfare and social security work, it should be recalled that, in accordance with the case-law of the Court, that requirement must be read in the light of Article 134(a) of the VAT Directive, which requires, in any event, that the supply of goods or services concerned be essential to the transactions relating to welfare and social security work (judgment of 15 April 2021, Administration de l’Enregistrement, des Domaines et de la TVA, C‑846/19, EU:C:2021:277, paragraph 59 and the case-law cited).

60      Furthermore, the Court has held that the provision of care and home help by an out-patient care service to persons in a state of physical or economic dependence is in principle closely linked to welfare and social security work within the meaning of Article 132(1)(g) of the VAT Directive. Similarly, the supply of services provided to persons in a state of mental dependence and intended to protect them in civil matters must also be regarded as such where those persons are not in a position to do so themselves without running the risk of damaging their own financial or other interests, that risk precisely justifying the finding that they lack legal capacity (judgment of 15 April 2021, Administration de l’Enregistrement, des Domaines et de la TVA, C‑846/19, EU:C:2021:277, paragraphs 62 and 63 and the case-law cited).

61      Therefore, where a body governed by public law or a private entity recognised as a body devoted to social wellbeing for the purposes of Article 132(1)(g) of the VAT Directive supplies services such as those referred to in the preceding paragraph for persons in a state of physical, economic or mental dependence, the Member State where the VAT is due, in accordance with that provision, is required to exempt those supplies from VAT.

62      Thus, in such circumstances, that Member State cannot, without (negatively) affecting the autonomous interpretation that must be given to that concept of the ‘supply of services … closely linked to welfare and social security work’ referred to in Article 132(1)(g) of the VAT Directive and thus fail to have regard to that provision, make the benefit of the exemption that is provided for therein subject to the condition that the supplies at issue have, under the national law of another Member State, social wellbeing.

63      In the present case, it follows from the request for a preliminary ruling that the supply of social services at issue in the main proceedings are provided by a company established in Bulgaria to natural persons residing in Germany and Austria.

64      In accordance with Article 45 of the VAT Directive, the place of supply of services to a non-taxable person is to be the place where the supplier has established its business.

65      Thus, for VAT purposes, the supply of social services provided to a private individual residing in a Member State other than that where the supplier established its business are deemed to be made in the territory of the Member State where the supplier is established, in such a way that those supplies are subject to VAT in that Member State.

66      It follows that, in the present case, the Member State of taxation is the Republic of Bulgaria.

67      Accordingly, as noted by the Advocate General in points 47 and 48 of her Opinion, assessing the character of the supply of social services at issue in the main proceedings for the purpose of determining whether they are the ‘supply of services … closely linked to welfare and social security work’ within the meaning of Article 132(1)(g) of the VAT Directive, must be made having regard to the Bulgarian legislation in relation to VAT, bearing in mind that that legislation must transpose correctly the VAT Directive and that, where such were not the case, the supplier, namely the applicant in the main proceedings, could directly rely on Article 132(1)(g) of that directive before the referring court in order to oppose national rules incompatible with that provision (judgment of 15 November 2012, Zimmermann, C‑174/11, EU:C:2012:716, paragraph 32 and the case-law cited).

68      In that context, if it followed from the determinations that are for the referring court to make, that the supply of social services at issue in the main proceedings are, having regard in particular to elements of interpretation in the case-law referred to in paragraphs 59 and 60 of the present judgment, the ‘supply of services … closely linked to welfare and social security work’, within the meaning of Article 132(1)(g) of the VAT Directive, and that the applicant in the main proceedings has the status of a ‘[body recognised] by the Member State concerned as being devoted to social wellbeing’, within the meaning of that provision, the applicant is justified in relying on the exemption provided for in that provision.

69      As regards, in the second place, the requirement referred to in Article 132(1)(g) of the VAT Directive, that the supply of services, in order to be exempt, must be supplied by bodies governed by public law or by other organisations recognised by the Member State concerned as being devoted to social wellbeing, it should be recalled that that provision does not specify the conditions or the procedures for recognising bodies other than those governed by public law as being devoted to social wellbeing. In consequence, it is generally for the national law of each Member State to lay down the rules in accordance with which that recognition may be granted to such bodies, the Member States having a discretion in that regard (judgment of 15 April 2021, Administration de l’Enregistrement, des Domaines et de la TVA, C‑846/19, EU:C:2021:277, paragraph 69 and the case-law cited).

70      In that context, under Article 133 of the VAT Directive, Member States may make the grant of the exemption provided for in Article 132(1)(g) of that directive to bodies other than those governed by public law subject to one or more of the conditions listed in Article 133. Those optional conditions that are set out in the VAT Directive for the grant of that exemption may be imposed additionally by Member States (see, in relation to Article 13(A)(2)(a) 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 (OJ 1977 L 145, p. 1) (now Article 133 of the VAT Directive), judgment of 21 January 2016, Les Jardins de Jouvence, C‑335/14, EU:C:2016:36, paragraph 33 and the case-law cited).

71      Accordingly, the right that Member States have in relation to the recognition of an entity as a body devoted to social wellbeing for the purposes of the exemption provided under Article 132(1)(g) of the VAT Directive, does not entitle Member States to change the sense of that exemption, by characterising, for example, a body devoted to social wellbeing, within the meaning of that provision, as a private entity that doesn’t carry out services of general interest in the social sector or that its manner of carrying out and conditions for the supply of social services are incompatible with a body devoted to social wellbeing.

72      As regards the question as to which Member State has the right to recognise the social wellbeing of bodies other than those governed by public law for the purposes of the VAT exemption provided for in Article 132(1)(g) of the VAT Directive, and in particular, whether, where, in the present case, the supply of social services at issue are provided to natural persons residing in a Member State other than that where the supplier established its business, such recognition falls within the right of the Member State in which the supplier is established or the right of the Member State where the supplies are actually carried out, it should be recalled that, as the VAT Directive does not contain any definition of the concepts referred to in Article 132(1)(g) thereof, the importance and the scope of those concepts must be established taking into consideration not only the wording of that provision, but also the context in which it occurs and the objectives pursued by the rules of which it is part (judgment of 22 December 2022, EUROAPTIEKA, C‑530/20, EU:C:2022:1014, paragraph 31 and the case-law cited).

73      In that regard, first, the wording of Article 132(1)(g) of the VAT Directive suggests that the words ‘by the Member State concerned’ must be compared with the words ‘Member States shall exempt’ in the introductory phrase of Article 132(1) of the VAT Directive. Accordingly, in referring to ‘the Member State concerned’, the EU legislature only referred to the Member State that must, in a given case, exempt from VAT the transactions referred to in Article 132(1)(g) of that directive.

74      However, it is for the Member State on which the VAT Directive confers the tax jurisdiction in order to subject transactions to VAT, namely the Member State of taxation, to exempt from that tax those transactions where the requisite conditions have been satisfied.

75      Secondly, the interpretation of Article 132(1) of the VAT Directive, read in the light of Article 131 of that directive, supports that the expression ‘by the Member State concerned’ refers to the Member State of taxation.

76      Article 131 of the VAT Directive, which sets out the general provisions applicable to the exemptions provided for in Chapters 2 to 9 of Title IX of that directive, including those in Article 132 of that directive, provides that those exemptions apply ‘in accordance with conditions which the Member States shall lay down for the purposes of ensuring the correct and straightforward application of those exemptions and of preventing any possible evasion, avoidance or abuse’.

77      It is thus apparent, from Article 131 that it is for the Member State having to apply the exemptions to fix, in complying with the VAT Directive, the conditions for their application, including those that allow the recognition of a private entity as a body devoted to social wellbeing for the purposes of the exemption provided for in Article 132(1)(g) of the VAT Directive. However, as noted in paragraph 74 of the present judgment, the Member State having to apply those exemptions is the Member State of taxation.

78      Furthermore, if the EU legislature had wanted that the recognition of the social wellbeing of bodies other than those governed by public law for the purposes of the exemption provided for in Article 132(1)(g) of the VAT Directive, fall under the jurisdiction of a Member State other than the Member State that has to apply that exemption, such as in particular the Member State in which the supplies are actually carried out, it would not have merely referred to ‘the Member State concerned’.

79      Thirdly, as regards the objective of the exemption provided for in Article 132(1)(g) of the VAT Directive, as recalled in paragraph 50 of the present judgment, it is intended, by treating certain supplies of public-interest services in the social sector more favourably for purposes of VAT, to reduce the cost of those services and thus to make them more accessible to the individuals who may benefit from them (judgment of 8 October 2020, Finanzamt D, C‑657/19, EU:C:2020:811, paragraph 29 and the case-law cited).

80      It appears consistent with that objective that it is the Member State having to forgo collecting the VAT applicable to supplies of services referred to in Article 132(1)(g) of the VAT Directive, accordingly allowing that the price to be paid by the individuals wishing to benefit from those supplies should be further reduced, that has a decisive influence, within the limits of the margin for discretion that it has, on which are the private entities whose social supplies deserve, with regard to the social wellbeing of those entities, to benefit from the same favourable treatment, as far as concerns VAT, than that applicable to supplies provided by bodies governed by public law of that Member State.

81      Therefore, it is apparent from a literal, systematic and teleological interpretation of Article 132(1)(g) of the VAT Directive that recognising the social wellbeing of bodies other than those governed by public law for the purposes of the exemption provided for under Article 132(1)(g) of the VAT Directive falls within the right of the Member State of taxation.

82      Therefore, in circumstances such as those at issue in the main proceedings in which a company providing the supply of social services to natural persons residing in a Member State other than that where that company established its business, to recognise the social wellbeing of that company for the purposes of the exemption provided for in Article 132(1)(g) of the VAT Directive comes under the right not of the Member State in which those supplies are actually carried out, in the present case the Federal Republic of Germany and the Republic of Austria, but of the Member State where the company is established, here, the Republic of Bulgaria.

83      That interpretation is, moreover, supported by the logic that underlies the provisions relating to the determination of the place of supply of services, reflected in recitals 3 and 5 of Directive 2008/8 and in Article 45 of the VAT Directive that taxing the supply of services provided to non-taxable persons must take place where the supplier is established, irrespective of the place where those services are actually carried out.

84      In that context, it appears consistent with such an analysis that, similar to the fiscal competence to subject to VAT the supply of social services provided to a non-taxable person residing in a Member State other than that where the supplier is established, the power to recognise the social wellbeing of that supplier for the purposes of the exemption provided for in Article 132(1)(g) of the VAT Directive is to be established by the country-of-origin principle.

85      Lastly, it should be recalled that the interpretation of the terms used to specify the exemptions contained in Article 132 of the VAT Directive must comply with the requirements of the principle of fiscal neutrality inherent in the common system of VAT which precludes, in particular, economic operators who effect the same transactions being treated differently in respect of the levying of VAT (judgment of 16 October 2008, Canterbury Hockey Club and Canterbury Ladies Hockey Club, C‑253/07, EU:C:2008:571, paragraph 30 and the case-law cited).

86      An interpretation of Article 132(1)(g) of the VAT Directive recognising the social wellbeing of that supplier for the purposes of the exemption provided in that provision falls within the competence of the Member State where the supplies are actually carried out means that the supply of services closely linked to welfare and social security work, within the meaning of that provision, provided by a company established in a Member State and recognised by that Member State as a body devoted to social wellbeing, within the meaning of that same provision, for a non-taxable person residing in that Member State, are exempt from VAT, whereas supplies of the same services provided by that same company, or by another company also established in the Member State and recognised by that Member State as a body devoted to social wellbeing, for a non-taxable person residing in another Member State not recognising the social wellbeing of those companies is not exempt from VAT. It is necessary to add that that interpretation applies, although, in accordance with Article 45 of the VAT Directive, both categories of transaction are considered for the purposes of VAT as supplied in the Member State where the supplier is established and subject, accordingly, to VAT in that Member State, that they have a similar meaning and that they are provided by the same supplier or by two suppliers with similar characteristics.

87      It is true that, as EU law now stands, the interpretation of Article 132(1)(g) of the VAT Directive, as is apparent from paragraph 81 of the present judgment, is capable of leading to a situation in which, concerning the supply of services closely linked to welfare and social security work provided to a non-taxable person residing in a Member State other than that where the supplier is established, a supplier of services, established in a Member State with less stringent requirements as to recognising the social wellbeing of private entities for the purpose of the exemption provided for in that provision, could make the supply of services exempt from VAT in a Member State imposing requirements particularly stringent in that regard, whereas a supplier established in the latter Member State could not benefit from such an exemption. Conversely, with further regard to the supply of services closely linked to welfare and social security work, a supplier established in a Member State imposing particularly stringent requirements concerning such recognition could make, in a Member State imposing less stringent requirements in that regard, the supply of services that would not be exempt from VAT, whereas a supplier established in that latter Member State could make the supply of services exempt from that tax.

88      However, the differences in treatment with regard to VAT that could exist between two private entities making the supply of services referred to in Article 132(1)(g) of the VAT Directive to a non-taxable person, in accordance with which they are established in the same Member State where the recipient of those services resides or in another Member State, stem from the fact that, first, under Article 45 of the VAT Directive, such supplies are subject to VAT in different Member States, according to conditions set out, complying with the VAT Directive, by the legislation of the Member State of taxation, and that, secondly, as regards, in particular, the condition relating to the recognition, for the purposes of the exemption provided for in that provision, of the social wellbeing of a private entity carrying out such services, the EU legislature recognised a margin of discretion in Member States precluding uniform practices. In so far as that aspect of the EU rules in force may have adverse effects, as noted by the Advocate General in points 73 and 74 of her Opinion, it is for the EU legislature to decide on any possible amendments to that legislation (see, by analogy, judgment of 9 September 2021, Ministère public (Extraterritorial penalties), C‑906/19, EU:C:2021:715, paragraph 45).

89      Having regard to the foregoing considerations, the answer to the second questions is that Article 132(1)(g) of the VAT Directive must be interpreted as meaning that, where a company provides the supply of social services to natural persons residing in a Member State other than that where that company established its business, the nature of those supplies and the characteristics of that company for the purpose of determining whether those supplies fall within the concept of ‘services … closely linked to welfare and social security work … by … [a body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of that provision, must be examined in accordance with the law, transposing the VAT Directive, of the Member State where that company established its business.

 The third question

90      By its third question, the referring court asks, in essence, whether Article 132(1)(g) of the VAT Directive must be interpreted as meaning that the fact that a company carrying out the supply of social services is registered at a public body of the Member State of taxation as a supplier of social services in accordance with the legislation of that Member State suffices for considering that that company falls within the concept of a ‘[body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of that provision.

91      As stems from the case-law of the Court, when considering whether to recognise bodies other than those governed by public law as being devoted to social wellbeing, it is for the national authorities, in accordance with EU law and subject to review by the national courts, to take various factors into account. These may include the existence of specific provisions, be they national or regional, legislative or administrative, or tax or social security provisions; the public interest nature of the activities of the taxable person concerned; the fact that other taxable persons carrying on the same activities already enjoy similar recognition; and the fact that the costs of the supplies in question may be largely met by health insurance schemes or other social security bodies, in particular when the private operators maintain contractual relations with those bodies (judgment of 15 April 2021, Administration de l’Enregistrement, des Domaines et de la TVA, C‑846/19, EU:C:2021:277, paragraph 70 and the case-law cited).

92      Furthermore, as stated in paragraph 67 of the present judgment, the exemption provided for in Article 132(1)(g) of the VAT Directive may be relied upon by a taxable person before a national court in order to oppose national rules incompatible with that provision. In such cases, it is for the national court to establish, in the light of all relevant factors, whether the taxable person is a body recognised as being devoted to social wellbeing for the purposes of that provision (judgment of 15 November 2012, Zimmermann, C‑174/11, EU:C:2012:716, paragraph 32 and the case-law cited).

93      Accordingly, where a taxable person challenges the recognition, or the absence of recognition, of a body as being devoted to social wellbeing for the purposes of Article 132(1)(g) of the VAT Directive, it is for the national courts to examine whether the competent authorities have observed the limits of the discretion granted by that provision whilst applying the principles of EU law, including, in particular, the principle of equal treatment, which, in the field of VAT, takes the form of the principle of fiscal neutrality (judgment of 15 November 2012, Zimmermann, C‑174/11, EU:C:2012:716, paragraph 33 and the case-law cited).

94      In that final regard, it should be recalled that, as stems from the case-law of the Court, for applying the exemption provided for in Article 132(1)(g) of the VAT Directive, compliance with the principle of fiscal neutrality requires, in principle, that all the organisations other than those governed by public law be placed on an equal footing for the purposes of their recognition for the supply of similar services (judgment of 15 November 2012, Zimmermann, C‑174/11, EU:C:2012:716, paragraph 43 and the case-law cited).

95      It follows that, when applying that exemption, which is for the Member State of taxation to do, the Member State may not – in respect of two taxable persons performing the same activities and where its manner of carrying out and conditions for the supply of social services are similar – grant the recognition of the social wellbeing to one of the taxable persons, and not grant, by contrast, such recognition to the other taxable person, failing which the principle of fiscal neutrality will be infringed.

96      In the light of that case-law, it must be found that the registration of a company, at a public body governed by the law of the Member State of taxation, as a supplier of social services in accordance with the legislation of that Member State, may be a criteria to take into account for the purpose of ascertaining whether that company falls within the concept of a ‘[body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of Article 132(1)(g) of the VAT Directive, in particular where companies thus registered are systematically or habitually considered by the tax authorities of that Member State as such bodies. Such a registration can, however, only allow for the company concerned to fall within that concept where it requires the prior inspection by the competent national authorities, considering the factors raised in paragraphs 91 to 94 of the present judgment, of the social wellbeing of that company for the purposes of that provision.

97      Having regard to the foregoing considerations, the answer to the third question is that Article 132(1)(g) of the VAT Directive must be interpreted as meaning that the fact that a company making the supply of social services is registered at a public body of the Member State of taxation as a supplier of social services in accordance with the legislation of that Member State suffices for considering that that company falls within the concept of a ‘[body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of that provision, only where such a registration is subject to the prior determination by the competent national authorities of the social wellbeing of that company for the purposes of that provision.

 Costs

98      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.

On those grounds, the Court (Seventh Chamber) hereby rules:

1.      Article 132(1)(g) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax, as amended by Council Directive 2008/8/EC of 12 February 2008, must be interpreted as meaning that:

first, the supplies of social services provided to natural persons residing in a Member State other than that where the supplier has established its business are capable of being exempted under that provision and, secondly, it is irrelevant in that regard whether that supplier has had recourse to a company established in that other Member State to contact its clients.

2.      Article 132(1)(g) of Directive 2006/112, as amended by Directive 2008/8, must be interpreted as meaning that:

where a company provides the supply of social services to natural persons residing in a Member State other than that where that company established its business, the nature of those supplies and the characteristics of that company for the purpose of determining whether those supplies fall within the concept of ‘services … closely linked to welfare and social security work … by … [a body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of that provision, must be examined in accordance with the law, transposing Directive 2006/112, as amended, of the Member State where that company established its business.

3.      Article 132(1)(g) of Directive 2006/112, as amended by Directive 2008/8, must be interpreted as meaning that:

the fact that a company making the supply of social services is registered at a public body of the Member State of taxation as a supplier of social services in accordance with the legislation of that Member State suffices for considering that that company falls within the concept of a ‘[body recognised] as being devoted to social wellbeing by the Member State concerned’, within the meaning of that provision, only where such a registration is subject to the prior determination by the competent national authorities of the social wellbeing of that company for the purposes of that provision.

[Signatures]

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*      Language of the case: Bulgarian.