VAT Exemption for Pharmaceutical Marketing Services (Supreme Administrative Court Decision)

• The Supreme Administrative Court in the Czech Republic ruled that pharmaceutical marketing services and distribution services are separate supplies for VAT purposes.
• Only the distribution services are subject to VAT.
• The taxpayer distributed pharmaceuticals and provided marketing services to a foreign group company.
• The taxpayer treated the marketing services as a separate supply of services not subject to VAT.
• The tax authority argued that the marketing services were ancillary to the distribution of pharmaceuticals and should be included in the VAT base.
• The court distinguished between the recipient of the marketing services and the recipient of the marketing information.
• The court concluded that the taxpayer did not supply any marketing services to its customers, only marketing information.
• Payment for the taxpayer’s marketing services is not subject to VAT.

Source: kpmg.com

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.

---

---