- The Romanian Fiscal Code was amended in 2024 to allow companies to reduce their VAT base by price reductions not directly given to customers but that reduce the final price paid by consumers.
- The amendment also applies to quarterly contributions paid in the pharmaceutical sector, such as clawback and cost-volume contributions, or co-payment reductions, which reduce the final price paid by patients for medicines.
- This amendment aligns Romanian law with European VAT regulations and clarifies the situation of contributions in the pharmaceutical sector.
- Companies can now adjust their VAT base for past contributions and request refunds.
- The new legislation allows for direct adjustment in the tax return, making tax management more transparent and efficient.
- This change aligns with practices in other European countries and corrects a past legislative dysfunction.
- Pharmaceutical companies can explore these changes to maximize tax benefits and ensure compliance with international regulations.
- The amendment was made in response to requests from the business community and aims to align Romanian VAT legislation with European law, as interpreted by the Court of Justice of the European Union (CJEU) in the Boehringer Ingelheim case.
- The CJEU ruled that companies paying these contributions do not retain the full consideration for their sales, justifying a reduction in the VAT base for sales of medicines for which VAT was collected at the full distribution price.
- The CJEU further clarified in the Novo Nordisk case that these contributions are not taxes, as their destination is known, and the tax authority acts as a payment agent for the health authority.
- This interpretation validates the nature of these contributions as price reductions, which should be aligned accordingly from an accounting perspective.
- The CJEU rulings are relevant to Romania, as the contribution system in the pharmaceutical sector is similar.
Source: blog.pwc.ro
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
