European Court – T-361/26 (Sandoz Hungária) – Questions – Reduction of the taxable amount: ex lege payments funding medicine subsidies

• Type of request: A request for a preliminary ruling under Article 267 TFEU, lodged on 19 May 2026 by the Fővárosi Törvényszék (Budapest High Court, Hungary), following its decision to refer of 7 May 2026.
• Parties: SANDOZ Hungária Kereskedelmi Kft., a Hungarian wholesaler of medicinal and health products, against the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and Customs Authority).
• Factual background: Hungarian law requires companies promoting medicinal products to make a fixed monthly payment per employed medical representative to the State tax authority, which immediately transfers those sums to the National Health Insurance Fund (NEAK) to fund the purchase-price subsidy on prescribed, publicly funded medicines.
• The dispute: Sandoz filed a corrected VAT return reducing its tax debt by HUF 161,031,000, arguing the payment for medical representatives is an indirect price reduction; the tax authority refused, treating it as a regulatory tax with no direct link to the products sold.
• Central legal question: Whether Article 90(1) of Directive 2006/112/EC precludes national legislation denying a subsequent reduction of the taxable amount where a pharmaceutical company pays ex lege a portion of its revenue that ultimately funds discounts to insured patients, meaning it does not receive full consideration for its supplies.

Articles of the EU VAT Directive 2006/112/EC discussed

• Article 73 — Provides that the taxable amount includes everything constituting consideration obtained (or to be obtained) by the supplier from the customer or a third party, including subsidies directly linked to the price of the supply. Relevant because the dispute concerns whether the ex lege payment effectively reduces the consideration the company actually retains from its sales, and how third-party subsidies feed into the taxable amount.
• Article 90(1) — Provides that in the case of cancellation, refusal, total or partial non-payment, or where the price is reduced after the supply takes place, the taxable amount shall be reduced accordingly under conditions determined by the Member States. This is the core provision referred: the referring court asks whether it precludes Hungarian legislation that bars a pharmaceutical company from reducing its taxable amount for the ex lege payments linked to medical representatives, even though the health insurance fund uses the entirety of those amounts to finance patient discounts.
• Article 90(2) — Allows Member States to derogate from paragraph 1 in the case of total or partial non-payment. Set out in the referral as part of the Article 90 framework governing when and how the taxable amount may be adjusted.
• Article 273 — Permits Member States to impose other obligations they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to equal treatment and without giving rise to cross-border frontier formalities or additional invoicing obligations. Relevant to the question of the limits of national regulatory measures affecting the VAT taxable amount.

Preliminary Ruling Question

Must Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax be interpreted as precluding the national legislation at issue in the main proceedings, under which a pharmaceutical company which, through the national tax authority, pays ex lege a portion of its revenue obtained from the sale of pharmaceutical products to the national health insurance as payment for employing medical representatives, and which therefore does not receive full consideration for the sale of those products, is not entitled subsequently to reduce the taxable amount, despite the fact that the national health insurance uses the entirety of the amount paid to fund the discount granted to the insured individuals on the price of the pharmaceutical company’s pharmaceutical products?

Key Takeaways

• Extends the Novo Nordisk line of case law: The referral builds directly on C-462/16 and C-717/19 (Boehringer Ingelheim) and C-248/23 (Novo Nordisk), testing whether the Article 90(1) reasoning applies to payments calculated on the number of medical representatives rather than on sales volume.
• “Full consideration” is the decisive test: The referring court considers the only relevant factor to be that the taxable person does not receive part of the consideration for its products — not whether the payment is linked to sales volume or to identifiable products.
• Practical significance for pharma and regulated sectors: A ruling for the taxpayer could allow retroactive reductions of the VAT taxable amount for mandatory, statutory levies that ultimately fund end-consumer price discounts, with implications for VAT neutrality wherever companies bear ex lege charges that erode their effective consideration.

Source Curia