VAT Treatment of Services Provided by a Home for the Disabled and a Disabled Workshop

Facts

Centre X. for the Disabled is a foundation that operates a special education day care centre, a training and permanent workshop, as well as a residential home for the disabled. The Federal Tax Administration issued a declaratory decision on the VAT treatment of the services provided by the Centre. The Centre filed a complaint against this decision, which was partially upheld. The Federal Tax Administration then filed an administrative court appeal with the Federal Supreme Court.

Considerations

The Federal Supreme Court upheld the appeal of the Federal Tax Administration and confirmed the objection decision:

- The transportation services and hospitality services of the Centre as a home for the disabled or day care centre are exempt from VAT under Art. 14 para. 7 VATO, provided they are included in the boarding fee or daily flat rate.

- The transportation of disabled persons working in the Centre's disabled workshop is only exempt from tax if specially equipped vehicles are used (Art. 14 para. 6 VATO). Otherwise, these transportation services are subject to tax.

- The hospitality services for disabled persons working in the disabled workshop and not residing in the attached residential home are subject to tax.

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