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Kugler was a limited liability company providing an outpatient care service to people dependent on the assistance of others or in need of economic assistance from 1988 to 1990. The German tax authorities assessed Kugler to turnover tax at a reduced rate for the years 1988, 1989 and 1990 on the basis of estimated taxable amounts. Kugler lodged an objection on the ground that the transactions were exempt from turnover tax, since they related to professional medical activity and provided medical care.
Kugler was a limited liability company providing an outpatient care service to people dependent on the assistance of others or in need of economic assistance from 1988 to 1990. The German tax authorities assessed Kugler to turnover tax at a reduced rate for the years 1988, 1989 and 1990 on the basis of estimated taxable amounts. Kugler lodged an objection on the ground that the transactions were exempt from turnover tax, since they related to professional medical activity and provided medical care.
The objection was dismissed, so Kugler brought an action before the Finanzgericht (finance court), which was also unsuccessful. The court found that Kugler did not exercise any of the professions referred to in relevant legislation because, as a legal person, it did not meet the conditions for professional activity. Furthermore, since the exemption provisions set out in Article 13(A)(1)(c)and (g) of the Sixth Directive had been transposed into national law in conformity with the directive, Kugler could not rely on them. Kugler then appealed to Bundesfinanzhof (Federal Finance Court) on a point of law. The proceedings were stayed and the European Court of Justice was asked to make a preliminary ruling.
The Court ruled that the exemption envisaged in Article 13(A)(1)(c) was not dependent on the legal form of the taxable person supplying the medical or paramedical services referred to in that provision.
The exemption envisaged in Article 13(A)(1)(c) applied to the provision of care of a therapeutic nature by a capital company running an outpatient service under which care, including homecare, was provided by qualified nursing staff, to the exclusion of the provision of general care and domestic help.
The provision of general care and domestic help by an outpatient care service to persons in a state of physical or economic dependence amounted to the supply of services closely linked to welfare and social security work within the meaning of Article 13(A)(1)(g) of the Sixth Directive. The exemption provided for in that Article might be relied upon by a taxable person before national courts in order to oppose national rules incompatible with that provision. It was therefore for the national court to establish whether the taxable person was an organisation recognised as charitable within the meaning of the provision.
(Ambulanter Pflegedienst Kugler GmbH v Finanzamt fur Korperschaften I in Berlin (Case C-141/00), European Court of Justice, 10 September 2002.)
