The Swedish Healthcare VAT on the Hiring out of Medical Care Staff and its Compatibility with EU Law

Abstract: In 2018, the Swedish Supreme Administrative Court decided in a case. The decision of the court, came to change the scope of the exemption for medical care in Sweden. The court ruled that the hiring out of medical care staff is to be regarded as a taxable service and not exempted from VAT. This interpretation has raised many questions and opinions. One of them is the compatibility of the interpretation with the VAT Directive and the judgements of the CJEU in that regard. This thesis aims to answer this question by looking at the relevant Articles in the VAT Directive and analysing the judgments of the CJEU concerning these Articles. Amongst other things, the thesis looks at the compatibility of this interpretation with the principles of strict interpretations and fiscal neutrality. When looking at the selected case law, and the Swedish interpretation, it appears that a breach of these two principles is possible. Further, a discussion in regard to the case law referred to by the Swedish court is also made. The thesis intends to discuss the differences in the circumstances between the Swedish cases at issue and the cases that the Swedish court based its assessment on (Horizon College and go fair). These differences can be summarized in the client company’s control over the hired staff, where the cases Horizon College and go fair do not regard staff that act under their own responsibility and legitimacy. The hired staff in the Swedish cases at issue do act their own responsibility and legitimacy. Thus, it is arguable whether these cases can be used to justify the Swedish interpretation. Another aspect that the thesis regards, is the different interpretation made by Finland. This opens the floor to further discussions concerning the uniform interpretation and application of EU law, which gives another reason to question the interpretation made by Sweden. The Swedish interpretation is now being investigated by the Swedish Government. It remains unclear what the outcome of this investigation is going to be. Will, the Swedish interpretation, be regarded as incompatible with the EU law, namely, the VAT Directive and the judgments of the CJEU, or will Sweden continue to tax the hiring out of medical staff.