The pre-ruling situation
Since 1 January 2016, surgeries and procedures for cosmetic purposes performed by doctors and hospitals did not fall under the VAT-exemption for medical procedures, which meant they were subject to VAT.
The VAT levy was limited to procedures that are not listed in the nomenclature of the National Institute for Health and Disability Insurance (RIZIV) or that are listed there but are not refunded. The intention was that only those procedures that did not serve a therapeutic purpose would be taxed and to restrict the VAT levy to doctors and hospitals and to cosmetic procedures that are not contained in the RIZIV nomenclature.
The distinction is no longer applicable
The Constitutional Court nullified a number of points of this rule, with VAT now being payable on an extended range of procedures, and any distinction disappearing between:
- Cosmetic surgery performed by doctors and that performed by other professions exempted from the VAT (nurses, dentists, midwifes, etc).
- Cosmetic procedures listed in the RIZIV nomenclature and those not listed therein.
- Cosmetic procedures performed in hospitals and cosmetic procedures performed elsewhere.
More cosmetic procedures subject to VAT
Cosmetic procedures performed by non-doctors, whether or not included in the RIZIV nomenclature and whether or not refundable, and that are not performed in a hospital are in principle subject to VAT.
The Court also found that those services and goods that are closely related to medical practices in hospitals but that are 'not essential to performing exempted procedures when their primary purpose is to generate additional income in direct competition with commercial enterprises' are subject to VAT. This might include things such as pay TV in hospitals.
More paramedical professions now VAT-exempt
The VAT exemption for paramedical professions is limited to accredited and regulated professions. But the Court believes that a paramedical profession no longer has to beformally recognised as such when it comes to the application of the VAT exemption. It will suffice to guarantee that the medical care is of a sufficiently high level of quality – if the quality level of regulated (para)medical professions is matched, then the Court found that they should also be VAT-exempt.
This is particularly important for chiropractors and osteopaths, who do not practice professions that are recognised and regulated by the law. To date, unless they were also qualified medical doctors or physiotherapists, their work was always subject to VAT. This ruling means their services are now VAT-exempt.
The VAT authorities are (for now) leaving the choice up to you
A response from the tax authorities was soon forthcoming, and on 17 January of this year they announced their opinion. While they will not be enforcing the ruling, in anticipation of a legislative change, affected individuals and organisations can already utilise it. This means that, depending on their situation, they can exempt their services from VAT or charge VAT.
These professionals and institutions (hospitals) may consequently subject those procedures performed as of 01 October 2019 to VAT, while chiropractors and osteopaths can exempt from VAT any procedures performed since that same date.