We highlight this month the recent Decision of the Court of Justice of the European Union (CJEU) of 4 March 2021 regarding the exemption of VAT in services of nutritional accompaniment in the scope of the activity of gyms.

This Decision is assumed to be of extreme importance for gyms and companies in the sector of physical maintenance and sports activities, taking into account the common practice of providing nutritional support and related services within the scope of specific contractual plans.

Now, the CJEU clarifies that if qualified professionals provide the paramedic services of nutritionism for the purpose - nutritionists -, they can be exempt from VAT, as long as they have “therapeutic purpose”.

The CJEU, therefore, understands that for a nutritional monitoring service to be covered by the VAT exemption, it must be provided “for prevention, diagnosis, treatment of a disease and health regeneration”.

Without prejudice, and with emphasis on the matter in question, the CJEU also clarifies that a nutritional monitoring service provided within the scope of a sports institution has “a health purpose, but (…) not necessarily, a therapeutic purpose”.

The CJEU thus seems to devalue, above all, the preventive purpose of nutrition, for example, against obesity and related diseases, admitting that such purpose of preventing certain pathologies can be configured as merely "indirect or distant".

It should be noted that the CJEU does not entirely exclude the application of the exemption to nutritional benefits. Still, it hinders its observance, making it dependent on demonstrating that these services have effective therapeutic purposes.

In any case, for the exemption to be applicable, it must be ensured that the provision of nutritional monitoring is not considered ancillary given the maintenance and physical well-being activities practised in the gymnasiums.

The CJEU highlights the “autonomous purpose” of nutritional and dietary monitoring, realising that maintenance and physical well-being services and nutritional monitoring services do not constitute a “single complex service”.

Another important criterion corresponds to the percentage of billing charged to nutritional services, namely if it does not qualify as a minimum. In this case, the CJEU conceived a 40% percentage of turnover as non-incidental.

Finally, as for the need for effective use of services by the purchasers, the CJEU did not comment directly, but it is necessary to comply with the conclusions of the Advocate General, who considers the mere availability of services as "quite doubtful".

This Decision of the CJEU is not exceptionally unequivocal, allowing favorable interpretations both to the gyms and to the Tax Authority, which, for this very reason, has made some attempts to reverse decisions previously handed down by the Arbitration Courts of the Administrative Arbitration Center (CAAD) in cases identical, but to no avail.

See the full text of the Decision here.