6.6.3.2 Exemption without credit – the free supply of services (other than the use of business assets)

The EU VAT Directive provides for a number of supplies of services that qualify as a VAT exempt supply of goods without credit, such as the supply of medical care in the exercise of the medical and paramedical professions.1 In this respect, an example could be a business that employs a qualified medical professional to provide medical care for its employees but also for their family members, for free. Assuming that these services are provided for purposes other than those of the business, these free medical services should, in my view, be treated as VAT exempt. The transactions that are treated as taxable supplies of services under Article 26 of the EU VAT Directive are meant to ensure that the business that uses these services for making the free supplies should be treated the same as a consumer buying the same services in the same jurisdiction. Also, the type of services performed for free should be covered by the terms used to specify the exemptions in the EU VAT Directive.