Comments on C-717/19 (Boehringer Ingelheim): Optional discount to health insurer leads to VAT refund

In the pharmaceutical industry, pharmaceutical companies and health insurers often make agreements about the price of medicines. These agreements often consist of a discount to be paid to the health insurer afterwards. In the Netherlands there has been a discussion with the tax authorities for a number of years. This discussion concerns the question of whether these discounts (preference policy) may be deducted from the compensation received by the pharmaceutical company for the supply of medicines. See our previously published article. The Court of Justice recently ruled in the long-awaited Boehringer Ingelheim case that a discount agreement with a public health insurer based on an optional price-volume agreement reduces the pharmaceutical’s compensation. The pharmaceutical company is therefore entitled to a refund of VAT. As a pharmaceutical company or health insurer, are you involved in the provision of medicines for which discounts are granted (in retrospect) on the basis of such an agreement? Then this case can turn out to be beneficial for your situation.

Source BDO

See also

• ECJ C-717/19 (Boehringer Ingelheim) – Judgment – Reduction of the taxable amount even if not established on a commercial policy
• ECJ Cases – Focus on ”Discounts” (Art. 90)

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