Social wellbeing

The taxpayer firm was a Hamburg-based temporary-work agency that hired out carers it employed.The German tax authority subjected the agency’s services to VAT at the standard rate because its business did not involve nursing and caring.

The taxpayer appealed.

The Federal Finance Court found that the taxpayer’s services were closely linked to welfare and social security work within the meaning of art 132(1)(g) of Principal VAT Directive 2006/112/EC which allows member states to exempt the supply of such services.

The court referred the question of whether the taxpayer’s services could be categorised as welfare work for a preliminary ruling by the Court of Justice of the European Union (CJEU).

The CJEU ruled that neither state-examined care workers who provided services directly to persons in need of care nor a temporary-work agency which supplied carers to establishments recognised as being devoted to social wellbeing fell within...