Is a botox treatment exempt from VAT?
Cosmetic clinics generally employ doctors on the professional register. Does that also mean the medical exemption covers botox, fillers and other cosmetic procedures?
Introduction
Looking well groomed matters more to some than to others, but personal appearance plays a large part in daily life. Botox, fillers and other cosmetic procedures to boost confidence are increasingly popular, and clinics offering a sharper jawline, fuller lips and fewer wrinkles keep appearing. Can those clinics apply the medical exemption?
The medical exemption
The Dutch VAT Act contains an exemption for medical services. It applies to activities amounting to the provision of medical care by practitioners registered under the Dutch professions in healthcare act.
That registration makes clear which treatments a doctor may carry out under Dutch requirements. Cosmetic clinics generally employ registered doctors to perform the procedures.
Medical care covers all activities carried out with the aim of diagnosing, treating and, so far as possible, curing diseases or health disorders, and of protecting, maintaining or restoring health. As you can imagine, cosmetic treatments do not obviously fall within that definition.
Cosmetic procedures
The State Secretary has clarified in a decree that the exemption does not apply to cosmetic treatments intended solely to enhance appearance. A therapeutic purpose must be identifiable.
In PFC Clinic AB the Court of Justice held that cosmetic and aesthetic services can fall within medical care in so far as they are intended to treat or care for people who, as a result of illness, injury or a congenital condition, need an aesthetic procedure, unless the procedure is purely cosmetic. Psychological health problems also fall within that concept.
Where a patient seeks a cosmetic procedure because of psychological problems caused by physical abnormalities, which in our view goes further than insecurity about appearance, there is a therapeutic purpose. Assessing that is for the treating doctor.
In practice
Disputes can arise about whether a cosmetic doctor was right to apply the exemption. In principle it is for the doctor to assess the therapeutic purpose, and professional confidentiality prevents the inspector from asking to see the medical file. That does not mean, however, that a doctor can simply assert that every treatment has that purpose. Where the facts do not make that plausible, there is a risk that a court will find the business has not discharged its burden of proof and reject the exemption entirely.