Is Acupuncture and Other Alternative Treatments Exempt from VAT?

Did you know that acupuncture can be either VAT-exempt or subject to VAT, depending on who inserts the needles?

VAT legislation contains several distinctions that can seem both formalistic and counterintuitive. The healthcare sector is a good example. Although the general principle is that similar services should be treated alike, this is not always the case in practice.

The same acupuncture treatment may be exempt from VAT in one situation but subject to 25% VAT in another. The difference does not necessarily lie in the treatment itself, but rather in who performs it, how it is financed, and the context in which it is provided.

Acupuncture and homeopathy were previously exempt from VAT regardless of who performed the treatment. Following legislative changes, the exemption has become significantly narrower. Today, the VAT treatment depends, among other things, on whether the provider is licensed healthcare personnel, how the service is offered, and how it is invoiced.

Authorization Can Be Decisive

For the VAT exemption for healthcare services to apply, the treatment must be performed by licensed healthcare personnel. It is not sufficient that the profession itself has the possibility of obtaining authorization, nor does the exemption apply when the treatment is carried out by others under the supervision of licensed healthcare personnel.

For example, a physiotherapist may use acupuncture as one of several treatment methods during a consultation. If the acupuncture forms a natural part of the overall treatment and is not invoiced separately, the service will be covered by the VAT exemption for healthcare services.

When Is Acupuncture Subject to VAT?

As a general rule, acupuncture is subject to VAT when it is offered as a standalone treatment outside the ordinary healthcare exemption.

This may, for example, be the case when:

the treatment is performed by a person who is not licensed healthcare personnel
the acupuncture is sold as a separate service and invoiced separately
the treatment is not part of a healthcare treatment pathway covered by the exemption

In these situations, 25% VAT will normally be charged.

A Practical Example

Two practitioners provide exactly the same acupuncture treatment.

Practitioner A is a physiotherapist and uses acupuncture as part of a standard physiotherapy treatment. The service is VAT-exempt.

Practitioner B operates a private acupuncture practice without authorization as healthcare personnel. The same treatment is subject to VAT.

From the patient's perspective, the treatments may appear identical, yet the VAT rules produce different outcomes.

Not Just Acupuncture

The same issues arise for several services that fall in the borderland between healthcare and alternative treatment. Many are surprised to learn that services such as homeopathy, doula services during childbirth, and various forms of therapy may be subject to VAT, even when they have a clear health-related purpose.

The rules may result in businesses offering nearly identical treatments being subject to different VAT treatment. This creates difficult boundary issues and, in some cases, competitive distortions between operators in the same market.

What Should Healthcare Businesses Be Aware Of?

Businesses providing treatment services should carefully consider:

who performs the service
whether the practitioner is licensed healthcare personnel
whether the service forms part of a broader course of treatment
how the service is priced and invoiced

These fine distinctions mean that small differences in organization and invoicing can have significant VAT consequences.

Our experience is that many healthcare providers are uncertain about where the line is drawn between VAT-exempt healthcare services and VAT-liable treatments. Reviewing the services offered can help identify risk areas and reduce the likelihood of unexpected VAT costs.