Comments on ECJ C-717/19: Contributions to insurance company viewed as price reduction for VAT purposes

• The CJEU ruled that contributions paid by Boehringer Ingelheim to NEAK for subsidised medicines are considered a reduction in the invoiced price, affirming that NEAK acts as a final consumer in the transaction, which allows Boehringer to adjust its VAT tax base accordingly.
• Boehringer Ingelheim’s contributions were based on the sales of subsidised medicines, and since NEAK did not issue an invoice but requested payment, the court determined that the absence of an invoice does not prevent the adjustment of the tax base if supported by other documentation.
• The ruling reinforces previous judgments, clarifying that the pharmacy must pay VAT on both the NEAK subsidy and the patient’s residual payment, thereby legitimizing the reduction of the tax base due to the contributions made by Boehringer.

Source KPMG

Referring ECJ cases

• Roadtrip through ECJ cases: Focus on ”Discounts”
• C-317/94 – Elida Gibbs Ltd. – Money back and discount coupons – Taxable amount to be adjusted
• C-462/16 – Boehringer Ingelheim Pharma GmbH & Co. KG – Decision – 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

 

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