Abolishment of the VAT exemption for plastic surgery from 1 January 2016
05 April 2016
From 1 January 2016 the VAT exemption for plastic surgery is no longer applicable and by consequence the normal 21% VAT rate will have to be applied. The VAT Authorities have issued an Administrative Decision (no. E.T. 127.740 of 22 March 2016) in which they clarify the basic principles. Plastic surgery performed by doctors or hospitals, of which the sole purpose is to change the physical appearance of a patient for esthetical reasons, will be subject to VAT. Reference is made to the INASTI-nomenclature. Treatments not included in this nomenclature, or treatments which are included but are not reimbursed in accordance with the mandatory insurance for healthcare, will be subject to VAT.
Other topics which are covered in the Administrative Decision are the VAT treatment of the diagnosis, the pre-examinations, the treatments/surgery with only an esthetical purpose, treatments/surgery with mixed purposes, the related medical care before, during or after the treatment/surgery and the admission into hospital for esthetical treatments.
In order to assess who is obliged to request a VAT identification number, attention is paid to the various collaboration forms within the medical sector (i.e. doctor companies, associations, partnerships,…). The Decision also foresees two special regimes, namely the exemption to introduce periodical VAT returns (relinquishing the right to deduct input VAT), and the special payment scheme when a doctor has entered into a central collection system (maintaining the right to deduct input VAT). Also the general VAT exemption for small enterprises can be applied if the annual turnover threshold of 25.000 EUR is not surpassed.
Following the VAT taxability of the doctors and hospitals concerned, they will also be entitled to a (partial) right to deduct input VAT, since they will become so-called mixed VAT taxable person (VAT deductibility to be determined based on a general pro-rata, or based on actual usage). In addition it will be possible to deduct the so-called historical input VAT. This relates to the input VAT on goods or services (other than company assets) purchased before 1 January 2016, but which are not yet used or consumed at that date. Also input VAT on company assets for which the legal revision period of 5 or 15 years has not been surpassed yet, can be regularized for the year in which they become VAT taxable and for the following years within the legal revision period.
Doctors and hospitals, who become VAT taxable following this new legislation, will need to take the necessary actions in order to request a VAT identification number. All requests for a VAT identification number will be considered as timely if introduced ultimately on 31 May 2016. There is also a transitional provision measure for treatments for which an agreement with the patient was already been made on 29 February 2016 at the latest with a fixed date and the treatment has to take place ultimately on 30 June 2016.
Should you have any further question or require a personal advice with respect to the impact of these rules on your company, please contact your usual contact person at BDO or you may send an email to [email protected] for the attention of one of the members of the Competence Centre VAT:
- Erwin Boumans, 02/778.01.00
- Pascal Dauw, 09/210.54.10
- Kaatje Bondewel, 02/778.01.00
- Brigitte Braeckmans, 03/230.58.40