November 30
2020
Anjum Shabbir
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22nd October 2020
Consumer, Health & Environment External Relations & Trade Tax

Nutrition service supplies are independent from general fitness services and exempt from VAT, says AG Kokott

Advocate General (AG) Kokott delivered her Opinion in Frenetikexito (C-581/19), advising the Court on whether human health activity and nutrition services are to be regarded as ancillary or independent to the fitness and physical well-being activity, and whether those services must be supplied or that they may be merely made available.

In the facts leading to the main proceedings, Frenetikexito, a Portuguese company, provides fitness programmes and nutrition advice, both as part of a fitness programme and separately. The nutrition advice service in the fitness programme is optional, and if included, amounts to 40% of the fee. Frenetikexito applies the VAT exemption for medical supplies to the nutrition advice service, but the Portuguese tax authorities considered such service as an ancillary supply to the fitness service.

Advocate General Kokott  proposed the Court to rule that, following its case law on the distinctiveness and independence of every supply,  where a taxable person supplies nutrition, fitness and physical well-being services, they are independent and distinct supplies for the purposes of the VAT Directive. The AG considered that the nutrition advice service in question was not a case either of a single complex supply nor a case of a dependent ancillary supply, noting that the recipient of a nutrition supply has a distinct economic interest in it. She further reasoned that the nutrition advice service is an exempt supply consisting in provision of medical care for the purposes of Article 132(1)(c) of the VAT Directive.

The judgment is available here.

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