Answer no. 529/2021 – Relevance for VAT purposes of price adjustments

With the response to question n. 529 of 6 August 2021, the Inland Revenue expressed its opinion on the VAT treatment of the price adjustments of the goods determined on the basis of the profits achieved by the parties.

In particular, in the case covered by the aforementioned ruling, the Applicant (hereinafter “Alfa”) and “Beta”, companies operating in the pharmaceutical sector, had entered into a contract under which:

• “Alfa” was responsible for the production and development of an active ingredient; And
• “Beta” was responsible for the purchase of the active ingredient from “Alfa”, its transformation into a finished product and the subsequent marketing phase.

Source PwC

References to ECJ Cases

• ECJ Cases C-249/12 (Tulică) & C-250/12 (Plavoşin) – Price is considered is assumed to include VAT in case not mentioned in the agreement
• ECJ Case – C-549/11 – Orfey Balgaria EOOD – Liability before services are provided when all details are known and services are accurately described
• ECJ Cases – C-621/10 & C-129/11 (Balkan and Sea Properties and Provadinvest) – Opting for normal value is not allowed in cases that are not listed in Art. 80 of the VAT Directive

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