C-513/24

Provisional text JUDGMENT OF THE COURT (Second Chamber) 19 March 2026 (*) ( Reference for a preliminary ruling – Taxation – Common system of value added tax (VAT) – Directive 2006/112/EC – Right to deduct VAT – Article 173(1) – Proportional deduction – Expenditure forming part of the general costs of a taxable person – Minimum technical and material equipment of healthcare facilities required in order to obtain a licence to supply healthcare services in respect of which VAT is not deductible – Services necessary for the supply of services in respect of which VAT is deductible ) In Case C‑513/24, REQUEST for a preliminary ruling under Article 267 TFEU from the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), made by decision of 15 July 2024, received at the Court on 23 July 2024, in the proceedings Oblastní nemocnice Kolín, a.s., nemocnice Středočeského kraje v Odvolací finanční ředitelství, THE COURT (Second Chamber), composed of K. Jürimäe, President of the Chamber, K. Lenaerts, President of the Court, acting as Judge of the Second Chamber, F. Schalin (Rapporteur), M. Gavalec and Z. Csehi, Judges, Advocate General: A. Rantos, Registrar: I. Illéssy, Administrator, having regard to the written procedure and further to the hearing on 12 June 2025, after considering the observations submitted on behalf of: –        Oblastní nemocnice Kolín, a.s., nemocnice Středočeského kraje, by M. Bohuslav and J. Procházková, advokáti, –        Odvolací finanční ředitelství, by V. Mertová, –        the Czech Government, by L. Březinová, M. Smolek and J. Vláčil, acting as Agents, –        the European Commission, by M. Herold and J. Hradil, acting as Agents, after hearing the Opinion of the Advocate General at the sitting on 25 September 2025, gives the following Judgment 1        This request for a preliminary ruling concerns the interpretation of Articles 173(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’). 2        The request has been made in proceedings between Oblastní nemocnice Kolín, a.s., nemocnice Středočeského kraje (hospital in the Central Bohemia Region, in Kolín, a public limited company, Czech Republic) (‘Nemocnice Kolín’) and the Odvolací finanční ředitelství (Appellate Tax Directorate, Czech Republic) concerning the right to deduct value added tax (VAT).  Legal context  European Union law 3        Article 168(a) of the VAT Directive provides: ‘In so far as the goods and services are used for the purposes of the taxed transactions of a taxable person, the taxable person shall be entitled, in the Member State in which he carries out these transactions, to deduct the following from the VAT which he is liable to pay: (a)      the VAT due or paid in that Member State in respect of supplies to him of goods or services, carried out or to be carried out by another taxable person;’ 4        Article 173(1) of that directive is worded as follows: ‘In the case of goods or services used by a taxable person both for transactions in respect of which VAT is deductible pursuant to Articles 168, 169 and 170, and for transactions in respect of which VAT is not deductible, only such proportion of the VAT as is attributable to the former transactions shall be deductible. The deductible proportion shall be determined, in accordance with Articles 174 and 175, for all the transactions carried out by the taxable person.’  Czech law 5        Paragraph 1(1) of the vyhláška č. 92/2012 Sb., o požadavcích na minimální technické a věcné vybavení zdravotnických zařízení a kontaktních pracovišť domácí péče (Decree No 92/2012 on the requirements relating to minimum technical and material equipment for healthcare facilities and home care contact points) (‘Decree No 92/2012’), in force at the time of the facts in the main proceedings, states, in essence, that the general requirements relating to the minimum technical and material equipment (‘technical and material equipment’) of healthcare facilities are set out in the annex to that decree. 6        Annex No 4, Part II, to Decree No 92/2012, entitled ‘Special requirements’, provides, in point 2.1 thereof, that any intensive care unit for adults must, inter alia, be equipped with a defibrillator. 7        The annexes to that decree also refer to several hundred items of technical and material equipment which different types of healthcare facilities must have. Those items include, inter alia, requirements relating to premises (consultation rooms, waiting rooms, toilets for patients, storage areas), equipment for such premises (armchairs, washbasins, cabinets, chairs, desks), instruments (stethoscopes, magnifying glasses), basic equipment (tonometers, scales, glucometers) and more sophisticated equipment (ECG devices, ultrasound scanners, laryngostroboscopes, vital signs monitors).  The dispute in the main proceedings and the question referred for a preliminary ruling 8        Nemocnice Kolín is a hospital, the main economic activity of which is to supply healthcare services in respect of which VAT is not deductible. In addition, it supplies other services in respect of which VAT is deductible (‘additional services’), including, in particular, clinical studies on the effects of medicinal products, accommodation for persons accompanying patients, medical internships, instrument sterilisation services for third parties, antenatal courses or radiographic, ultrasound and veterinary examinations. 9        On 18 January 2019, Nemocnice Kolín filed a supplementary tax return for December 2016, in which it exercised its right to deduct VAT, calculated as a proportional deduction, in the amount of 4 176 327 Czech koruny (CZK) (approximately EUR 164 500). On 5 February 2021, the Finanční úřad pro Středočeský kraj (Tax Office for the Central Bohemia Region, Czech Republic) issued a tax adjustment notice, by which it allowed part of that deduction. However, that tax authority concluded that Nemocnice Kolín had failed to demonstrate that the right to deduct VAT of CZK 3 287 723 (approximately EUR 129 500) was well founded in so far as the services received in relation to that amount were primarily intended for and used for the provision of healthcare services, namely for transactions in respect of which VAT was not deductible. 10      Since the action brought by Nemocnice Kolín against that tax adjustment notice before the Appellate Tax Directorate had been upheld only in part, Nemocnice Kolín brought an action before the Krajský soud v Praze (Regional Court, Prague, Czech Republic). By judgment of 25 February 2022, that court dismissed that action on the ground that it was not necessary to regard as general costs the costs of all the technical and material equipment which the healthcare facilities must have in order to ensure their operation and the provision of all their services (healthcare and additional services). That technical and material equipment is not a component of the price of the goods or services in respect of which VAT is deductible. Consequently, that court held that the costs of that technical and material equipment could not be deducted from the VAT due in proportion to its use. 11      Subsequently, Nemocnice Kolín brought an appeal on a point of law against that judgment before the Nejvyšší správní soud (Supreme Administrative Court, Czech Republic), which is the referring court. Nemocnice Kolín claims that the costs relating to technical and material equipment constitute general costs. In order to be able to provide the additional services, Nemocnice Kolín must have a licence to supply healthcare services. In accordance with Decree No 92/2012, in order to have such a licence, healthcare facilities must meet minimum technical and material requirements. It follows that the acquisition, repair, review and maintenance of that equipment are necessary for the supply of the additional services. 12      The referring court notes that the argument that the expenditure required by Decree No 92/2012 is general costs is supported by the fact that it is clear that, in the absence of that expenditure, Nemocnice Kolín would not be licensed to supply healthcare services and could not therefore supply the additional services. However, that court notes, in essence, that Decree No 92/2012 concerns only the provision of healthcare services and not all the services which may be supplied by a hospital such as research or teaching activities. The referring court therefore seeks to ascertain whether the link established by that decree, between the input and output transactions, is sufficiently direct and immediate. 13      In those circumstances, the Nejvyšší správní soud (Supreme Administrative Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling: ‘Must Article 173(1) of [the VAT Directive] be interpreted as meaning that, where a transaction in respect of which VAT is deductible depends on the possession of a licence to carry out transactions in respect of which VAT is not deductible (in this case, [healthcare] services), do the goods and the services relating thereto, which constitute, under national legislation, the minimum technical and material equipment for healthcare facilities, on which the provision of healthcare services depends, correspond to general (overhead) costs directly and immediately linked to the overall economic activity of the taxable person, and hence, give rise to a right to deduct a proportion of the tax?’  Consideration of the question referred 14      By its question, the referring court asks, in essence, whether Article 173(1) of the VAT Directive must be interpreted as meaning that the costs incurred for the acquisition of goods and services required by national legislation for the provision of healthcare services in respect of which VAT is not deductible, but also used for the provision of services in respect of which VAT is deductible, constitute, on account of that statutory requirement alone, general costs in respect of which a proportion of the VAT is deductible. 15      As a preliminary point, it should be recalled that, according to settled case-law, the right to deduct, provided for in Article 168(a) of the VAT Directive, is an integral part of the VAT scheme and in principle may not be limited. It is exercisable immediately in respect of all the taxes charged on input transactions. The deduction system is intended to relieve the trader entirely of the burden of the VAT payable or paid in the course of all his or her economic activities. The common system of VAT ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT. In so far as the taxable person, acting as such at the time when he or she acquires goods or receives services, uses those goods or services for the purposes of his or her taxed transactions, he or she is entitled to deduct the VAT paid or payable in respect of those goods or services (see, to that effect, judgments of 14 September 2017, Iberdrola Inmobiliaria Real Estate Investments, C‑132/16, EU:C:2017:683, paragraphs 25 to 27, and of 25 November 2021, Amper Metal, C‑334/20, EU:C:2021:961, paragraph 23). 16      It is apparent from Article 173(1) of the VAT Directive that where a taxable person uses goods and services both for transactions in respect of which VAT is deductible and for transactions in respect of which VAT is not deductible, only such proportion of the VAT as is attributable to the former transactions is to be deductible and that the deductible proportion is to be determined for all the economic transactions carried out by the taxable person, following the methodology set out in Articles 174 and 175 of that directive. 17      According to the Court’s case-law, the existence of a direct and immediate link between a particular input transaction and a particular output transaction or transactions giving rise to entitlement to deduct is, in principle, necessary before the taxable person is entitled to deduct input VAT and in order to determine the extent of such entitlement. The right to deduct VAT charged on the acquisition of input goods or services presupposes that the expenditure incurred in acquiring them was a component of the cost of the output transactions that gave rise to the right to deduct (judgments of 8 February 2007, Investrand, C‑435/05, EU:C:2007:87, paragraph 23, and of 14 September 2017, Iberdrola Inmobiliaria Real Estate Investments, C‑132/16, EU:C:2017:683, paragraph 28). 18      It is however also accepted that a taxable person has a right to deduct even where there is no direct and immediate link between a particular input transaction and an output transaction or transactions giving rise to the right to deduct, where the costs of the services in question are part of his or her general costs and are, as such, components of the price of the goods or services which he or she supplies. Such costs do have a direct and immediate link with the taxable person’s economic activity as a whole (judgments of 8 February 2007, Investrand, C‑435/05, EU:C:2007:87, paragraph 24, and of 13 June 2024, C (Court-appointed administrators and liquidators), C‑696/22, EU:C:2024:499, paragraph 87). 19      By contrast, where goods or services acquired by a taxable person are used for purposes of transactions that are exempt or do not fall within the scope of VAT, no output tax can be collected or input tax deducted (judgments of 14 September 2017, Iberdrola Inmobiliaria Real Estate Investments, C‑132/16, EU:C:2017:683, paragraph 30, and of 8 September 2022, Finanzamt R (Deduction of VAT linked to a shareholder contribution), C‑98/21, EU:C:2022:645, paragraph 48). 20      The Court has further specified that the existence of such a link between transactions must be assessed in the light of the objective content of those transactions. More specifically, it is for the tax authorities and the national courts to consider all the circumstances surrounding the transactions concerned and take account only of the transactions which are objectively linked to the taxable person’s taxable activity. To that effect, the Court has held that account may be taken of the actual use of the goods and services purchased, as inputs, by the taxable person and of the exclusive reason for that purchase (see, to that effect, judgments of 14 September 2017, Iberdrola Inmobiliaria Real Estate Investments, C‑132/16, EU:C:2017:683, paragraph 31; of 25 November 2021, Amper Metal, C‑334/20, EU:C:2021:961, paragraph 34; and of 13 June 2024, C (Court-appointed administrators and liquidators), C‑696/22, EU:C:2024:499, paragraph 89). 21      In the present case, it is apparent from the documents before the Court that, in accordance with Decree No 92/2012, Nemocnice Kolín must have technical and material equipment in order to obtain a licence for the provision of healthcare services. That facility must also satisfy the conditions required for the supply of such services in order to be able to supply the additional services subject to VAT. 22      It is in that context that the referring court seeks, in particular, to ascertain whether a direct and immediate link between the purchase of input goods and the taxable person’s economic activity as a whole may be established on the ground that the purchase of those goods is the result of a statutory obligation on the taxable person. 23      However, in the light of the foregoing considerations and points 20, 24 and 25 of the Advocate General’s Opinion, it must be held that the existence of a statutory obligation to purchase goods or services cannot, as such, suffice to establish the existence of a direct and immediate link between such a purchase and the output transactions in respect of which VAT is deductible or the taxable person’s economic activity as a whole. In addition, in the light of the objective scheme of VAT set up by the common system of VAT, only the objective relationship between the input and output transactions or the taxable person’s economic activity as a whole is decisive, as otherwise the uniform application of EU law in that area would be severely undermined (see, to that effect, judgment of 21 February 2013, Becker, C‑104/12, EU:C:2013:99, paragraph 32). 24      That said, the existence of such an obligation may be taken into account when assessing all the relevant circumstances referred to in paragraph 20 above. 25      It is therefore in the light of all those circumstances that it is for the referring court to assess, in respect of each item of the technical and material input equipment, whether that equipment has a direct and immediate link with an output transaction carried out by Nemocnice Kolín in respect of which VAT is deductible or, failing that, with Nemocnice Kolín’s economic activity as a whole, under its general costs (see, to that effect, judgments of 25 November 2021, Amper Metal, C‑334/20, EU:C:2021:961, paragraph 38, and of 8 September 2022, Finanzamt R (Deduction of VAT linked to a shareholder contribution), C‑98/21, EU:C:2022:645, paragraph 51). 26      In that regard, it must be borne in mind that, in proceedings under Article 267 TFEU, which is based on a clear separation of functions between the national courts and the Court of Justice, any assessment of the facts in the case is a matter for the national court. However, in order to give the national court a useful answer, the Court may, in a spirit of cooperation with national courts, provide it with all the guidance that it deems necessary (see judgments of 21 March 1985, Celestri & C., 172/84, EU:C:1985:137, paragraph 12; of 1 July 2008, MOTOE, C‑49/07, EU:C:2008:376, paragraph 30; and of 30 May 2024, Amazon Services Europe, C‑665/22, EU:C:2024:435, paragraph 40). 27      In the present case, it is apparent from the documents before the Court that Nemocnice Kolín supplies, on the one hand, healthcare services. According to the information provided by the referring court, those services are all exempt from VAT. However, Nemocnice Kolín claimed before the Court that certain of those services, such as a voluntary interruption of pregnancy, may also be subject to VAT. On the other hand, Nemocnice Kolín supplies additional services, which are subject to VAT. 28      First, it should be stated that it is for the referring court to ascertain, in respect of each item of the technical and material equipment at issue in the main proceedings, whether the acquisition of that equipment has a direct and immediate link with one or more output activities. For that purpose, in accordance with the case-law cited in paragraph 20 above, that court may, inter alia, take into account the actual use of that equipment and, as the Advocate General observes in point 25 of his Opinion, the assignment of that equipment. 29      In that regard, it must be observed, as the Advocate General did in point 27 of his Opinion, that, in the light of the findings made by the referring court and without prejudice to the assessments to be carried out by that court, the technical and material equipment at issue in the main proceedings appears, prima facie, to be used for the provision of healthcare services and not for the provision of additional services. 30      As regards healthcare services, it must be stated that if it appears, at the end of the assessment referred to in paragraph 28 above, that certain technical and material equipment at issue in the main proceedings is intended to be used exclusively for the purpose of carrying out exempt healthcare services, the transactions for the acquisition of that equipment will not give rise to any right to deduct, as is apparent from the case-law cited in paragraph 19 above. 31      If, by contrast, certain of that technical and material equipment is intended to be used both for healthcare services subject to VAT and for healthcare services exempt from VAT, it is necessary, in accordance with Article 173(1) of the VAT Directive, to determine the deductible proportion following the methodology referred to in Articles 174 and 175 of that directive. 32      In the light of the information in the file before the Court and without prejudice to the verifications to be carried out by the referring court, that could be the case, by way of example, of a defibrillator the acquisition of which is necessary in order to obtain a licence to carry out healthcare services, whether they are exempt or subject to VAT, and which is intended to be used, if necessary, at the time of those services. 33      As regards the additional services, it must be held that, as the Advocate General observed in point 28 of his Opinion, the fact that the national legislation does not serve automatically to establish a direct and immediate link between the input transactions required and the output transactions carried out by Nemocnice Kolín in respect of which VAT is deductible does not prevent the existence of such a link from being established on a case-by-case basis in accordance with the abovementioned principles. 34      Thus, if part of the technical and material equipment at issue in the main proceedings is also necessary for the supply of the additional services, a direct and immediate link between its input acquisition and those output transactions could be established, with the result that they would have a right to a proportional deduction following the methodology referred to in paragraph 31 above. 35      Furthermore, it must be stated that the fact that an item of the technical and material equipment at issue in the main proceedings is not, as the case may be, used during the provision of one of the services referred to in paragraph 27 above has no bearing on the assessment of the direct and immediate link. 36      As stated in paragraph 15 above, the common system of VAT ensures neutrality of taxation of all economic activities, whatever their purpose or results, provided that they are themselves subject in principle to VAT. Therefore, the right to deduct, once it has arisen, is retained even if, subsequently, the economic activity envisaged has not been carried out and, therefore, did not give rise to taxed transactions or if the taxable person was unable to use the goods or services which gave rise to a deduction in the context of taxable transactions by reason of circumstances beyond his or her control (judgment of 25 November 2021, Amper Metal, C‑334/20, EU:C:2021:961, paragraph 35 and the case-law cited). It is therefore, as has already been pointed out in paragraph 28 above, the use of the input goods which may be decisive. 37      Second, it is only if it appears that the acquisition of certain technical and material equipment has no direct and immediate link with one or more specific output transactions that it will be necessary to examine whether that acquisition nevertheless has a direct and immediate link with the economic activity of the taxable person as a whole, in so far as it forms part of that taxable person's general costs. That could be the case, by way of example, if a national law requires that certain facilities had certain equipment for reasons of safety or comfort. 38      Having regard to all the foregoing, the answer to the question referred is that Article 173(1) of the VAT Directive must be interpreted as meaning that the costs incurred for the acquisition of goods and services required by national legislation for the provision of healthcare services in respect of which VAT is not deductible, but also used for the provision of services in respect of which VAT is deductible, do not constitute, on account of that statutory requirement alone, general costs in respect of which a proportion of the VAT is deductible.  Costs 39      Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable. On those grounds, the Court (Second Chamber) hereby rules: Article 173(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as meaning that the costs incurred for the acquisition of goods and services required by national legislation for the provision of healthcare services in respect of which VAT is not deductible, but also used for the provision of services in respect of which VAT is deductible, do not constitute, on account of that statutory requirement alone, general costs in respect of which a proportion of the VAT is deductible. [Signatures] *      Language of the case: Czech.