Netherlands Supreme Court Clarifies VAT Treatment of Pharmaceutical Products

The Dutch Supreme Court (Hoge Raad der Nederlanden) Sept. 8 issued a decision in Case No. 20/04304, clarifying the VAT treatment of pharmaceutical products. The taxpayer, a manufacturer and seller of pharmaceutical products, applied the reduced VAT rate for registered medicinal products in selling its pharmaceutical products used in treating specific skin conditions. The Tax Agency issued an additional assessment at the general rate. On the taxpayer’s appeal from the Court of Appeal, the Supreme Court dismissed, holding that: 1) skin care pharmaceutical products aren’t eligible for the reduced VAT rate for registered medicinal products because the products cannot be ...