Michaela Merz

Breaking news von Sandra Ragaz: Pharmaceutical rebates – opportunity for VAT savings

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The ECJ AG in the case of Boehringer Ingelheim has been handed down on 11 July 2017 (please find he CJEU case C-462/16 here: Link).

In that regard we have excellent breaking news and a VAT saving opportunity on (mandatory) rebates that companies have to render for the supply of pharmaceuticals.

Background in a nutshell

The Taxpayer, a German manufacturer, supplies pharmaceutical products to pharmacies. Retrospective discounts linked to the value of those supplies have to be mandatory paid, not to the pharmacies but to private health insurers which reimburse the insured persons buying the products from the pharmacies. The Advocate General (AG) has suggested that the Taxpayer can adjust the VAT due on its supplies retrospectively, even though the insurer was not in the original chain of supply. So far this was not possible resulting in a VAT burden for the pharmaceutical company.

Call for action and your opportunity

In the above regard three key questions are of relevance for you:

  1. Does your pharmaceutical company have to render a mandatory rebate to the supply of pharmaceuticals in some EU countries like e.g. Germany, Belgium, France, Italy etc.?
  2. If yes, have such (mandatory) discounts not reduced the VAT payable (up to 25% VAT rate in some countries) of the respective commercial supply of pharmaceuticals?
  3. If yes, are you interested in a substantial possible VAT saving in different EU countries where you are doing business? Are you curious for more?

Especially, if you have answered all the questions with yes it’s time to benefit from the impact of the case.

Sandra Ragaz can be contacted under +41 (0)58 792 44 69 or sandra.ragaz@ch.pwc.com to discuss and explore this opportunity.

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