New clarifications have been provided by the Revenue Agency regarding the additional remuneration for the reimbursement of medicines provided within the National Health System (NHS), as introduced by the 2023 Budget Law. According to the clarifications, the non-repayable contributions for pharmacies, which were provided for in the Budget Law 2023, are excluded from the application of VAT.
The Revenue Agency’s clarifications align the non-repayable contribution for pharmacies with the same measure that was planned on an experimental basis for 2021 and 2022. These clarifications can be found in the legal advice number 2 of 15 September 2023.
An association representing over 18,000 private pharmacies affiliated with the NHS contacted the financial administration to seek clarification on this new development. The question raised was whether the additional remuneration for the reimbursement of drugs supplied under the NHS can be considered as a non-repayable contribution that is excluded from the scope of VAT.
The Revenue Agency responded affirmatively, stating that the sums due can be excluded from the scope of VAT. This clarification is in line with the previous experimental measure, which also recognized the non-relevance of the additional remuneration for pharmacies in terms of VAT.
The Revenue Agency justifies this response by highlighting the continuity of the measure to safeguard the proximity network of pharmacies, which was previously supported in the same way. Furthermore, the agency emphasizes certain relevant aspects in order to establish the exclusion of the contribution recognized for pharmacies from the application of VAT.
The agency explains that the sums disbursed are not commensurate with the price of the drugs, as they are recognized based on the individual packages sold, regardless of the price. Additionally, the disbursement of the sums is contingent upon predefined conditions and does not modify the public price of the drug.
The only new element in legal advice number 2 of 15 September 2023, compared to the previous legislation on additional remuneration, is the presence of a maximum spending limit. Therefore, the Revenue Agency confirms that the contribution paid is not relevant for VAT purposes, in line with their previous answers during the experimental period.
For more details, readers can refer to the full text of legal advice number 2 of 15 September 2023 provided by the Revenue Agency.