VAT exemption terms can cover natural persons where "establishment" or "organisation" is not confined to legal entities.

VAT exemption wording in Article 13A(1)(b) and (g) of the Sixth Directive is to be construed strictly, but not so narrowly as to limit "establishment" or "organisation" to legal persons where the text contains no such restriction. The expressions are capable of covering one or more natural persons carrying on a business, and the absence of an express reference to legal persons supports that reading. That interpretation also accords with fiscal neutrality, which prevents economically equivalent operators from being treated differently for VAT purposes solely because they use different legal forms. Natural persons running a business are therefore not excluded from the exemption.

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Issues: Whether the expressions "other duly recognised establishments of a similar nature" and "other organisations recognised as charitable by the Member State concerned" in Article 13A(1)(b) and (g) of the Sixth Directive exclude natural persons running a business from the VAT exemption.

Analysis: The exemption provisions in Article 13 of the Sixth Directive are to be construed strictly, but strict construction does not require reading into the text a limitation to legal persons where the words used are broader. The expressions "establishment" and "organisation" are capable, in their ordinary meaning, of covering one or more natural persons carrying on a business. The absence of any reference to "legal person" supports that reading. The interpretation is also consistent with the principle of fiscal neutrality, which prohibits treating economically equivalent operators differently for VAT purposes solely because they adopt different legal forms.

Conclusion: Natural persons running a business are not excluded from the exemption under Article 13A(1)(b) and (g) of the Sixth Directive.

Final Conclusion: The reference was answered in the affirmative for the taxpayers, and the VAT exemption was held to be capable of applying to business activities carried on by natural persons.

Ratio Decidendi: Terms in VAT exemption provisions referring to an "establishment" or "organisation" are not confined to legal persons where the legislative text does not say so expressly, and the principle of fiscal neutrality forbids denying exemption merely because the business is carried on by natural persons.

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