Germany MOF Clarifies Taxation of Therapeutic Medicines

The German Ministry of Finance Dec. 13 issued Letter No. 2022/1203355, clarifying a European Court of Justice (ECJ) judgment concerning a VAT exemption concerning ready-to-use medicines considered therapeutic treatment. The letter clarifies: 1) the ECJ ruling that services naturally provided in the context of hospital and medical treatment, and in achieving therapeutic goals, are indispensable, “closely related sales” under an EU VAT directive; 2) that the dispensing of ready-to-use medicines can represent a dependent ancillary service to the therapeutic treatment service that is VAT-exempt, including the delivery of medicines that are indispensable for the treatment; 3) that to qualify for ...