Luxembourg: VAT exemption, legal services for adults lacking legal capacity (CJEU judgment)

Luxembourg: VAT exemption

The Court of Justice of the European Union (CJEU) today issued a judgment concluding that a lawyer’s activity of protecting adults lacking legal capacity is an economic activity but that this legal activity may be exempt from value added tax (VAT) if the legal services are closely linked to welfare and social security work and if that lawyer’s practice is recognized as a body devoted to social wellbeing.


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The case is: EQ v. Administration de l'Enregistrement, des Domaines et de la TVA, Case C-846/19 (15 April 2021)


Luxembourg law protects adults lacking legal capacity with curatorship and guardianship measures, under which certain authority regarding management and representation is conferred to third persons (typically family member and lawyers).

As explained in a CJEU release [PDF 238 KB], a lawyer conducted such representation for the protection of adults lacking legal capacity. In 2018, the Luxembourg tax authority assessed VAT for the lawyer’s activities of representation of adults lacking legal capacity. The lawyer objected, asserting these activities did not constitute economic activities subject to VAT, and in any event the activities were exempt from VAT as social services.

The Luxembourg tax authority asserted that the services supplied were performed in the context of the professional activity of a lawyer and constituted an economic activity that could not be exempt from VAT.

The matter ended up before a court in Luxembourg which in turn referred to the CJEU several questions including whether the activity of protecting adults lacking legal capacity may benefit from a VAT exemption.

The CJEU held that:

  • The supply of services by a lawyer for the benefit of adults lacking legal capacity and intended to protect them in civil matters constitutes an economic activity.
  • Under EU law, only activities of an economic nature are subject to VAT.
  • The lawyer’s activity in this case may be exempt from VAT if the supply of services is closely linked to welfare and social security work, and if that lawyer’s practice benefits from recognition as a body devoted to social wellbeing.

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