- The CJEU ruled in case C-248/23 that the ‘medicine tax’ paid by pharmaceutical distributors in Hungary qualifies as a discount for VAT purposes, allowing companies to reduce their taxable amount and potentially reclaim VAT already paid on this tax.
- Novo Nordisk, which contested the Hungarian tax authority’s rejection of its VAT deductions for both the medicine tax and a price volume agreement, had its case referred to the CJEU after a national tax authority’s mixed ruling.
- The court emphasized that the medicine tax is a discount because it reduces the effective price received from the sale of subsidized medicines, aligning its purpose with contractual payments designed to subsidize prices, and stated that taxing on the amount not received would violate the principle of fiscal neutrality.
Source PKF
See also
- C-248/23 (Novo Nordisk) – Judgment – Reduction taxable amount on ex lege payments to the State health insurance agency
- Roadtrip through ECJ cases: Focus on Promotional activities/Discounts (Art. 79, 87, 90(1))
- C-462/16 – Boehringer Ingelheim Pharma GmbH & Co. KG – Discounts reduce the VAT value of pharmaceutical supplies
- C-717/19 – Boehringer Ingelheim – Reduction of the taxable amount – Agreement between pharmaceutical company and health insurer
- Join the Linkedin Group on ECJ VAT Cases, click HERE
- VATupdate.com – Your FREE source of information on ECJ VAT Cases
