- Favorable Ruling for Roche: The Romanian High Court ruled in favor of Roche, granting a €12 million VAT refund along with a 45% interest repayment and inflation compensation, setting a significant precedent for pharmaceutical companies seeking to recover overpaid taxes on clawback payments under price-volume agreements.
- Legal Strategy Utilized: EY Romania successfully employed a unique provision in the Romanian tax code, allowing Roche to request a tax refund without adjusting previous VAT returns, thereby avoiding the risks associated with late-payment interest charges, despite a lengthy six-year litigation process.
- Broader Impact on the Pharmaceutical Sector: The ruling is expected to encourage at least 15 other pharmaceutical firms to pursue similar retrospective VAT claims, reflecting a shift in the willingness of companies to challenge tax authorities and potentially leading to more legal disputes in the EU’s evolving VAT landscape for the industry.
Source International Tax Review
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