Hospital and Medical Care

Advocate General finds that provision of use of a telephone and a television to hospital patients and the provision of food and a bed to persons accompanying hospital patients cannot automatically be regarded as exempt from VAT.

The European Court of Justice (ECJ) released the opinion of the Advocate General on 15 September 2005 in this Greek referral case, concerning whether the VAT exemption for hospital and medical care can extend to the provision of use of a telephone and a television to hospital patients and the provision of food and a bed to persons accompanying hospital patients.

The opinion provides that the applicability of exemption from VAT must be interpreted in the sense that the provision by a hospital establishment to a patient of telephone services and a television set, in the same way as the provision by said establishment of meals and a bed for the patient's companions, are activities closely related to hospital treatment and medical care according to this provision, only where the supply of such equipment to the patient or the permanent presence of a relative at his side is medically prescribed.

If the ECJ follows the Advocate General’s opinion, the supply of telephones and TVs for patients, and the provision of food and a bed to those accompanying patients, will not be regarded as exempt from VAT unless medically prescribed. This may provide opportunities for hospital establishments to consider recovery of certain VAT incurred.