Contents
Judgment of the Court (Seventh Chamber)6 October 2021note(Reference for a preliminary ruling — Value added tax (VAT) — Directive 2006/112/EC — Article 90(1) — Reduction of the taxable amount where the price was reduced after the supply took place — Payment made by a pharmaceutical company to the State health insurance agency — Article 273 — Administrative obligations imposed by national legislation for the exercise of the right to reduction — Principles of fiscal neutrality and proportionality)In Case C‑717/19,REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Törvényszék (formerly Fővárosi Bíróság) (Budapest High Court, Hungary), made by decision of 16 September 2019, received at the Court on 27 September 2019, in the proceedingsBoehringer Ingelheim RCV GmbH & Co. KG Magyarországi FióktelepevNemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága,THE COURT (Seventh Chamber),composed of A. Kumin, President of the Chamber, P.G. Xuereb (Rapporteur) and I. Ziemele, Judges,Advocate General: G. Hogan,Registrar: A. Calot Escobar,having regard to the written procedure,after considering the observations submitted on behalf of:– Boehringer Ingelheim RCV GmbH & Co. KG Magyarországi Fióktelepe, by Sz. Vámosi-Nagy, ügyvéd,– the Hungarian Government, by M.Z. Fehér Miklós and G. Koós, acting as Agents,– the European Commission, by J. Jokubauskaitė and L. Havas, acting as Agents,having decided, after hearing the Advocate General, to proceed to judgment without an Opinion,gives the following
Judgment
1This request for a preliminary ruling concerns the interpretation of Article 90(1) and Article 273 of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1; ‘the VAT Directive’).
2The request has been made in proceedings between Boehringer Ingelheim RCV GmbH & Co. KG Magyarországi Fióktelepe (‘Boehringer Ingelheim’) and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and Customs Authority, Hungary) (‘the Appeals Directorate’) regarding the decision by which it refused to grant Boehringer Ingelheim the right to deduct from the taxable amount the payments made to the Nemzeti Egészségbiztosítási Alapkezelő (National Health Insurance Fund, Hungary) (‘the State health insurance agency’ or ‘NEAK’).
Legal context
European Union law
3Under Article 73 of the VAT Directive:‘In respect of the supply of goods or services, other than as referred to in Articles 74 to 77, the taxable amount shall include everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.’
4Article 90 of that directive provides:1. In the case of cancellation, refusal or 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 which shall be determined by the Member States.2. In the case of total or partial non-payment, Member States may derogate from paragraph 1.’
5Article 273 of that directive provides:‘Member States may impose other obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, subject to the requirement of equal treatment as between domestic transactions and transactions carried out between Member States by taxable persons and provided that such obligations do not, in trade between Member States, give rise to formalities connected with the crossing of frontiers.The option under the first paragraph may not be relied upon in order to impose additional invoicing obligations over and above those laid down in Chapter 3.’
Hungarian law
6Paragraph 65 of the általános forgalmi adóról szóló 2007. évi CXXVII. törvény (Law CXXVII of 2007 on value added tax) (Magyar Közlöny 2007/155. (XI.16.); ‘the Law on VAT’) provides:‘In respect of the supply of goods or services, unless otherwise specified in the present law, the taxable amount shall consist of the consideration, expressed in monetary terms, obtained or to be obtained by the supplier from the purchaser of the goods, the recipient of the services or a third party, including any form of subsidy directly linked to the price of the supply of goods or services.’
7Paragraph 77 of that law provides:1. In respect of the supply of goods or services or the intra-Community acquisition of goods, amendment or termination of the contract – including cases where the contract is invalid or there is no contract – shall be grounds for a subsequent reduction in the taxable amount corresponding to the amount of any payment on account or consideration that has been or is to be refunded.…4.If, after having supplied the goods or services, the taxable person refunds a sum of money for promotional purposes in accordance with the conditions set out in his commercial policy, to a person (irrespective of whether that person is a taxable or a non-taxable person) who did not purchase directly from the taxable person the goods or services giving rise to the entitlement to the refund, the taxable person making the refund may subsequently reduce the taxable amount in respect of the supply of goods or services for which the refund is given (transaction giving entitlement to a reduction in the taxable amount), provided that:(a) the supply of goods or services that was made directly to the person entitled to the refund (transaction giving entitlement to a refund) is a taxable transaction carried out within national territory, and(b) the amount to be refunded is less than the sum arrived at by multiplying the number of the transactions giving entitlement to a refund by the lower unit price, including tax, of the goods or services supplied under the promotional campaign in question, with respect to all transactions giving entitlement to a reduction in the taxable amount.5. For the purposes of applying subparagraph 4, the amount refunded shall be deemed to include the amount of the tax.’
8Under Paragraph 78(3) and (4) of that law:3.In order for Paragraph 77(4) to apply, the taxable person providing the refund must have:(a) a copy of the invoice made out to the person entitled to the refund which provides proof of the transaction giving entitlement to the refund and which demonstrates unequivocally that the transaction in question is a taxable transaction carried out within national territory, and(b) proof of the bank transfer or cash payment which demonstrates unequivocally that the taxable person has refunded the sum specified in its commercial policy to the person entitled to receive it.4.The proof of payment referred to in paragraph 3(b) shall contain the following information:(a) The name, address and – in the case of a taxable person – tax identification number of the person entitled to the refund.(b) Information on the right to a deduction in respect of the transaction in question, based on the declaration by the person entitled to the refund.’
9Paragraph 195 of the adózás rendjéről szóló 2017. évi CL. törvény (Law CL of 2017 on general taxation procedures) provides:‘Where a taxpayer has submitted a corrected return claiming only that the legal provision on which the liability to tax is based is unconstitutional or contrary to a legal act of the European Union that is of general application and directly applicable, or that a municipal decree is contrary to another legal provision, the tax authorities shall take a decision on the corrected return within 15 days of the filing date thereof, without carrying out any checks, provided that, at the time of filing the corrected return, the Constitutional Court, the Kúria (Supreme Court, Hungary) or the Court of Justice of the European Union has not yet given a ruling on that issue, or the corrected return does not comply with the terms of the published ruling.’
10Paragraph 17(4) of the biztonságos és gazdaságos gyógyszer- és gyógyászati segédeszköz-ellátás, valamint a gyógyszerforgalmazás általános szabályairól szóló 2006. évi XCVIII. törvény (Law XCVIII of 2006 on general provisions concerning the reliable and economically viable supply of medicinal products and medical supplies and on the marketing of medicinal products; ‘the Gyftv’) states:‘Advertising is not permitted for medicinal products and preparations that are available only on prescription from a pharmacy or that have been approved for social security funding, or for medical supplies funded by the social security system.’
11Paragraph 26(2), (5) and (6) of the Gyftv provides:2. In order to adhere to the budgetary framework, the [State] health insurance agency may enter into the funding volume agreements referred to in subparagraph 5 below in respect of medicinal products which already receive funding or have recently been approved for funding or in respect of certain categories or types of such products, and in respect of medicinal products funded on grounds of fairness.…5.The payment obligation stipulated in the funding volume agreements may be determined:(a) in proportion to the price subsidy paid per subsidised unit sold;(b) on the basis of the difference between the total subsidy paid for one or more products during the period referred to in the agreement and the maximum amount fixed in the agreement;…(e) it may also be determined in accordance with the dosage instructions for the medicinal product in question, based on the difference between the prescribed dose and the reference dose fixed in the agreement in accordance with cost-effectiveness considerations.6. The provisions in subparagraph 5 may also be applied concurrently in respect of a preparation.’
12Under Paragraph 28(1) of the Gyftv:‘For the purposes of funding medicinal products that have been approved for social security funding, the [State health] insurance agency may use the following subsidising methods:…(c) Funding volume agreements.…’
13Paragraph 30/A of the kötelező egészségbiztosítás ellátásairól 1997. évi LXXXIII. törvény (Law LXXXIII of 1997 on the services provided by the compulsory health insurance system) provided:‘The [State] health insurance agency may enter into agreements with the marketing authorisation holders referred to in Paragraph 36(1) of [the Gyftv], with operators who market medical supplies, and with health service providers, in respect of the prices, quantities and quality requirements for any products and health services that may be marketed at subsidised prices, or in respect of any other matters the parties consider essential.’
14Paragraph 11(1) of the törzskönyvezett gyógyszerek és a különleges táplálkozási igényt kielégítő tápszerek társadalombiztosítási támogatásba való befogadásának szempontjairól és a befogadás vagy a támogatás megváltoztatásáról [szóló] 32/2004. (IV. 26.) ESzCsM rendelet (Regulatory Decree No 32/2004 of the Ministry of Social Affairs, Health and family on the criteria for the acceptance for social security subsidisation of registered medicinal products and preparations for specific nutritional uses and on changes to acceptance or subsidisation) provides:‘In the case of the funding volume agreements referred to in Paragraph 26 of the Gyftv, the volume of funding shall be determined having regard to the recommendation made by a professional healthcare association as to the number of patients who may be treated, taking into account the prevalence or incidence of the illness in question.’
The dispute in the main proceedings and the questions referred for a preliminary ruling
15Boehringer Ingelheim is the Hungarian subsidiary of a pharmaceutical company. Its main activity consists in the sale of subsidised medicinal products to wholesalers, which sell them to the pharmacies that then sell them to the patients.
16In Hungary, the retail sale of medicinal products is, with the exception of hospitals, carried out through pharmacies. Pharmacies source from wholesale distributors and wholesalers source from pharmaceutical distribution companies, such as Boehringer Ingelheim.
17The medicinal products may be subsidised by NEAK, which applies a ‘purchase price subsidy’ scheme. Under that scheme, for outpatient care, NEAK subsidises the purchase price of medicinal products that are issued on prescription and funded by the social security system. Payment of the price of the subsidised medicinal product is then shared between NEAK and the patient. The patient pays the pharmacy an amount, known as the ‘subsidised price’, which is the difference between the price of the medicinal product and the subsidy paid by NEAK. NEAK subsequently reimburses the amount of the subsidy to the pharmacy. The price of the medicinal products received by the pharmacy, which is the taxable amount for VAT, thus comprises two parts: the subsidy paid by NEAK and the ‘subsidised price’ paid by the patient. The pharmacy is therefore required to pay VAT on both the amount paid by the patient and the sum paid by NEAK.
18NEAK decides whether to include a medicinal product on the list of subsidised medicinal products following a complex examination that takes into account various factors including health policy, pharmaceutical aspects and cost-effectiveness, and then determines the amount of the subsidy depending on the price set by the distributor, namely Boehringer Ingelheim in the case in the main proceedings.
19In order for the medicinal products it distributes on the Hungarian market to be marketed at subsidised prices, Boehringer Ingelheim and NEAK entered into ‘funding volume agreements’ for the period from 1 October 2013 to 31 December 2017. Under the agreements, Boehringer Ingelheim undertook to make payments to NEAK of an amount fixed in the agreement to reflect sales of those medicinal products marketed by Boehringer Ingelheim, by deducting part of the revenue obtained from the sale of the products. More specifically, the amount of the payment obligations was expressed in the form of a percentage of the gross funding from NEAK for each packaged unit (each box) sold with funding (calculation per box); under certain agreements, it was set at 100% where the funding provided by NEAK for certain products exceeded a maximum amount (calculation based on annual maximum amounts).
20There is no legal requirement to enter into the agreements, but by doing so Boehringer Ingelheim ensures that the medicinal products it markets will be subsidised by NEAK. The agreements also allow NEAK to ensure ongoing access to treatment with new and state-of-the-art medicinal products that are subsidised, while at the same time maintaining a balanced budget.
21No invoice was issued by NEAK for the payments made by Boehringer Ingelheim. However, there is documentary evidence that makes it possible to verify, a posteriori, that the payments made by Boehringer Ingelheim to NEAK under the agreements were in fact made.
22On 13 November 2018, Boehringer Ingelheim submitted to the Hungarian tax authority a corrected VAT return for the tax period running from 1 October 2013 to 31 December 2017, in accordance with Paragraph 195 of Law CL of 2017 on general taxation procedures. In this corrected return, Boehringer Ingelheim reduced the amount of VAT it was required to pay for the tax period in question by 354687000 Hungarian forint (HUF) (approximately EUR 1 million), citing the payments made to NEAK under the funding volume agreements.
23The Hungarian tax authority of first instance rejected the corrected return submitted by Boehringer Ingelheim and did not therefore allow the subsequent reduction of the taxable amount.
24Boehringer Ingelheim brought an administrative appeal against that decision before the Appeals Directorate which upheld the first instance decision.
25The Appeals Directorate considered that the payments made by Boehringer Ingelheim to NEAK did not satisfy the conditions for the reduction of the taxable amount provided for in Paragraph 77(4) of the Law on VAT. According to the Appeals Directorate, first, the payments made by Boehringer Ingelheim cannot be classed as a subsequent refund ‘for promotional purposes’, given that the advertising of medicinal products included on the list of products subsidised by social security is prohibited under Paragraph 17(4) of the Gyftv. Second, those payments were not made by Boehringer Ingelheim ‘in accordance with the conditions set out in [its] commercial policy’, as the amount of the payments made under the agreements was not determined by the pharmaceutical company but by a professional healthcare association in accordance with a ministerial regulatory decree.
26In addition, the Appeals Directorate noted that Paragraph 77 of the Law on VAT contained all the grounds for a reduction in the taxable amount listed in Article 90(1) of the VAT Directive, and therefore it cannot be concluded that there is any infringement of EU law, because in transposing the directive into national law there is no requirement for the wording of the provisions in national law to be exactly the same as those in the directive. The VAT Directive simply established certain regulatory objectives, leaving the national legislature free to decide how to achieve them. The Appeals Directorate also argued that the judgment of the Court of Justice of 20 December 2017 in Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), by which it interpreted Article 90(1) of the VAT Directive, was based on different facts and therefore did not apply in the present case.
27Boehringer Ingelheim lodged an appeal against the decision of the Hungarian tax authority before the referring court. It claims, in essence, that, under Article 90(1) of the VAT Directive, the amount of the payment made to NEAK, which is deducted from its revenue, allows for the reduction in the taxable amount giving entitlement to a refund of VAT.
28In the first place, the referring court is uncertain, in the context of the dispute in the main proceedings, as to the applicability of the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), by which the Court took the view that the discounts granted by a pharmaceutical company to German private health insurance companies resulted in a reduction of the taxable amount of VAT in favour of that pharmaceutical company, when it supplies medicinal products via wholesalers to pharmacies which supply persons covered by private health insurance that reimburses the purchase price of the medicinal products to the persons it insures.
29In that regard, the referring court notes that the Hungarian subsidy scheme is similar to the German subsidy scheme for private health insurance, with the difference that, in Hungary, the payments made to NEAK, as the State health insurance agency, are not based on a mandatory law but on a civil law agreement which the parties enter into voluntarily. However, once signed, the consequence of the agreement is the same as the legislation at issue in the case giving rise to the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), namely that Boehringer Ingelheim could dispose only of a sum corresponding to the price of the sale of those medicinal products to pharmacies, reduced by that discount.
30The referring court considers, on the basis of paragraphs 41 to 43 of the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), that, in the present case, NEAK should be deemed to be the final consumer of the supply made by Boehringer Ingelheim, such that the amount payable to the tax authorities may not exceed the amount paid by the final consumer. Accordingly, since part of the price of the products was not received by the taxable person, namely Boehringer Ingelheim, because of the contribution paid by Boehringer Ingelheim to NEAK, the price of those products has been reduced after the supply took place in accordance with the provisions of Article 90(1) of the VAT Directive. In those circumstances, Boehringer Ingelheim was not able freely to dispose of the full amount of the price received on the sale of its products to pharmacies or to wholesalers.
31However, the referring court notes that the Court has not yet addressed the question of whether it is possible to make a subsequent reduction in the taxable amount where the grant of the discount is not mandatory under a provision of national law but is instead voluntary, as in the dispute in the main proceedings.
32Furthermore, the referring court observes that the Hungarian legislation deprives all pharmaceutical companies that have entered into funding volume agreements similar to those at issue in the main proceedings of the possibility of subsequently reducing the taxable amount for VAT, with regard to the amount paid to NEAK. Under Article 90(1) of the VAT Directive, the taxable amount is to be reduced by the appropriate amount under conditions to be determined by the Member States. However, the Court has not yet clarified the limit that must not be exceeded in order for those conditions to remain a restriction that is proportionate to the regulatory objective of EU law.
33In the second place, the referring court points out that in order to be able subsequently to reduce the taxable amount for VAT, the Hungarian legislation requires a copy of the invoice made out to the person entitled to the refund as proof of the transaction giving entitlement to the said refund and which clearly demonstrates that the transaction in question is a taxable transaction carried out within the national territory, together with proof of a credit transfer or cash payment.
34The referring court notes that, in the present case, NEAK did not issue Boehringer Ingelheim with an invoice; all that Boehringer Ingelheim has is the request for payment NEAK sent to it and a bank receipt providing proof of the transfer of the corresponding amount. It points out, however, that, according to the method stipulated in the agreement, NEAK calculates the contribution, stated in the request for payment, on the basis of information on the volume of medicinal products sold during the relevant period. Therefore, although there is no invoice, the transaction is duly documented, since details of the agreements and of the volume of medicinal products sold are publicly available, and the accounting for subsidies is based on official public registers. The referring court also observes that NEAK is a State health insurance agency, and therefore it can be presumed that the details it includes in the claim for payment are correct.
35The referring court considers that, although Article 273 of the VAT Directive allows Member States to impose other obligations to ensure the correct collection of VAT and to prevent tax evasion, such obligations must be proportionate to the objective pursued. In the case in the main proceedings, the possibility of tax evasion has not been raised and has not been invoked by the Hungarian tax authority, while the correct collection of VAT could be ensured, even though there is no invoice, due to the availability of other documentary evidence making it possible to verify subsequently the funding volume agreements and the payments made.
36However, the Court has not yet ruled on what the formal requirements are and what documents are necessary in order to enable a subsequent reduction in the taxable amount.
37In those circumstances the Fővárosi Törvényszék (formerly Fővárosi Közigazgatási és Munkaügyi Bíróság) (Budapest High Court, Hungary) decided to stay the proceedings and to refer the following questions to the Court of Justice for a preliminary ruling:(1) Should Article 90(1) of [the VAT Directive] be interpreted as precluding a provision of national law, such as that at issue in the main proceedings, under which a pharmaceutical company which, pursuant to an agreement it is not obliged to enter into, makes payments to the State health insurance agency based on the revenue obtained from pharmaceutical products and which, therefore, does not retain the full amount of the consideration for those products is not entitled subsequently to reduce the taxable amount, solely because the payment method is not set out in advance in its commercial policy and the payments are not principally for promotional purposes?(2) If the answer to the first question is in the affirmative, should Article 273 of [the VAT Directive] be interpreted as precluding a provision of national law, such as that at issue in the main proceedings, under which, in order to be able subsequently to reduce the taxable amount, an invoice made out to the person entitled to the refund providing proof of the transaction giving entitlement to that refund is required, even though the transaction that enables the subsequent reduction in the taxable amount is duly documented and can subsequently be verified, is based in part on truthful, publicly available information, and enables the tax to be collected correctly?’
Consideration of the questions referred
The first question
38By its first question, the referring court asks, in essence, whether Article 90(1) of the VAT Directive must be interpreted as precluding a national law that provides that a pharmaceutical company may not deduct from its taxable amount for VAT the portion of its revenue obtained from the sale of medicinal products subsidised by the State health insurance agency which it reimburses to that organisation under a contract concluded between the State health insurance agency and that company, because the amounts paid in that regard were not determined on the basis of terms set out in advance in that company’s commercial policy and because those payments were not made for promotional purposes.
39It should be noted, as a preliminary point, that the basic principle of the VAT system is that VAT is intended to tax only the final consumer and to be completely neutral as regards the taxable persons involved in the production and distribution process prior to the stage of final taxation, regardless of the number of transactions involved (see, to that effect, judgment of 3 May 2012, Lebara, C‑520/10, EU:C:2012:264, paragraph 25).
40Under Article 73 of the VAT Directive, the taxable amount is to include, in respect of the supply of goods or services, everything which constitutes consideration obtained or to be obtained by the supplier, in return for the supply, from the customer or a third party, including subsidies directly linked to the price of the supply.
41It is apparent from Article 90(1) of the VAT Directive, which relates to cases of cancellation, refusal or total or partial non-payment or where the price is reduced after the supply takes place, that the Member States are required to reduce the taxable amount and, consequently, the amount of VAT payable by the taxable person whenever, after a transaction has been concluded, part or all of the consideration has not been received by the taxable person. That provision embodies one of the fundamental principles of the VAT Directive, according to which the taxable amount is the consideration actually received and the corollary of which is that the tax authorities may not collect an amount of VAT exceeding the tax which the taxable person received (judgment of 15 October 2020, E. (VAT – Reduction of the taxable amount), C‑335/19, EU:C:2020:829, paragraph 21 and the case-law cited).
42The Court held, in paragraph 46 of the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), that Article 90(1) of the VAT Directive must be interpreted as meaning that the discount granted, under national law, by a pharmaceutical company to a private health insurance company results, for the purposes of that article, in a reduction of the taxable amount in favour of that pharmaceutical company, where it supplies medicinal products via wholesalers to pharmacies which supply persons covered by private health insurance that reimburses the purchase price of the medicinal products to persons it insures.
43In the present case, Boehringer Ingelheim supplies, on the Hungarian market, medicinal products subsided by the State health insurance agency via wholesalers to pharmacies which sell them to persons covered by that health insurance. The insured persons pay the difference between the price of the product and the amount of the subsidy paid directly by the State health insurance agency to the pharmacies. Pursuant to private-law agreements entered into with the State health insurance agency, Boehringer Ingelheim pays contributions to that agency, in respect of the subsided medicinal product the company supplies, of an amount fixed in those agreements, from the revenue obtained from the sale of those products.
44As the referring court noted, by entering into the agreements, Boehringer Ingelheim waives part of the consideration it receives from the wholesaler for the medicinal product. It would not therefore be in conformity with the VAT Directive for the taxable amount used to calculate the VAT chargeable to the pharmaceutical company, as a taxable person, to exceed the sum finally received by that company. If that were the case, the principle of neutrality of VAT vis-à-vis taxable persons, of whom the pharmaceutical company is one, would not be complied with (judgment of 20 December 2017, Boehringer Ingelheim Pharma, C‑462/16, EU:C:2017:1006, paragraph 35).
45It should be added that the fact that, in the case in the main proceedings, the direct beneficiary of the supplies of the medicinal products in question was not the State health insurance agency which subsequently reimbursed the amount of the subsidy to the pharmacy but the insured persons themselves who paid the subsidised price to the pharmacy, is not such as to break the direct link between the supply of services made and the consideration received (see, to that effect, judgment of 20 December 2017, Boehringer Ingelheim Pharma, C‑462/16, EU:C:2017:1006, paragraph 40).
46In so far as the pharmacy must pay VAT on the amount paid by the patient and on the amount paid to it by the State health insurance agency for the subsidised medicinal products, the State health insurance agency must be regarded as being the final consumer of a supply made by a pharmaceutical company, which is a taxable person for the purposes of VAT, such that the amount payable to the tax authority may not exceed that paid by the final consumer (see, to that effect, judgment of 20 December 2017, Boehringer Ingelheim Pharma, C‑462/16, EU:C:2017:1006, paragraph 41).
47Given that part of the consideration obtained from the sale of the medicinal products by the pharmaceutical company has not been received by the latter because of the contribution it pays to the State health insurance agency, which refunds part of the price of those medicinal products to the pharmacy, it must be found that there has been a reduction in the price of the medicinal products after the supply took place within the meaning of Article 90(1) of the VAT Directive.
48That interpretation is not called into question by the fact, noted by the referring court, that contrary to the facts at issue in the case giving rise to the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), there is no legal requirement for Boehringer Ingelheim to make payments to the State health insurance agency, rather the payments are made under the agreements entered into by Ingelheim Boehringer and the State health insurance agency.
49It is not apparent from either the wording of Article 90(1) of the VAT Directive or the judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), that Article 90(1) of the VAT Directive should be interpreted as meaning that its scope is limited to price reductions resulting from legal obligations.
50Moreover, that interpretation is not invalidated by the argument put forward by the Hungarian Government that, in essence, there can be no ‘price reduction’ as referred to in Article 90(1) of the VAT Directive, since there is no direct link between the consideration received by Boehringer Ingelheim and the contribution paid by the latter to the State health insurance agency. In that regard, the Hungarian Government is of the view that contributions based on maximum amounts cannot be considered to be ‘price reductions’, as referred to in that provision, since they do not relate to the consideration for the medicinal products supplied, but, in respect of a fixed period, to the maximum amount of the subsidy granted by the State health insurance agency and are public in nature.
51In that regard, it should be noted that, in accordance with the case-law cited in paragraph 41 above, it matters only that the taxable person has not received all or part of the consideration for the medicinal products. In the present case, Boehringer Ingelheim was not able to dispose of the full amount of the price received on the sale of the products, but only part of the final amount paid by wholesalers to which it sold its products, after deduction of the amounts paid to the State health insurance agency.
52Furthermore, where the price is reduced after the supply has taken place, Article 90(1) of the VAT Directive provides that the taxable amount is to be reduced accordingly under conditions to be determined by the Member States.
53While that provision grants the Member States a certain degree of discretion when adopting the measures to determine the amount of the reduction, the Member States have, however, an obligation to allow the reduction of the taxable amount in the cases referred to by that provision (see, to that effect, judgment of 11 June 2020, SCT, C‑146/19, EU:C:2020:464, paragraph 50 and the case-law cited).
54However, it is apparent from the order for reference that the conditions for the subsequent reduction of the taxable amount provided for by national legislation, in accordance with which the payments, giving entitlement to such a reduction, must be determined on the basis of terms set out in advance by the pharmaceutical company in its commercial policy and made for promotional purposes, deprive all pharmaceutical companies that have entered into funding volume agreements with the State health insurance agency of the possibility of subsequently reducing their taxable amount for VAT, in terms of the contributions paid to that agency, even though there has in fact been a reduction in the price after the supply took place for the purposes of Article 90(1) of the VAT Directive. Those conditions cannot therefore be regarded as falling within the discretion enjoyed by Member States under that article.
55In the light of the foregoing considerations, the answer to the first question is that Article 90(1) of the VAT Directive must be interpreted as precluding a national law that provides that a pharmaceutical company may not deduct from its taxable amount for VAT the proportion of its revenue obtained from the sale of medicinal products subsidised by the State health insurance agency, which it reimburses to that organisation under a contract concluded between the State health insurance agency and that company, because the amounts paid in that regard were not determined in accordance with terms set out in advance in that company’s commercial policy and because those payments were not made for promotional purposes.
The second question
56By its second question, the referring court asks, in essence, whether Article 90(1) and Article 273 of the VAT Directive must be interpreted as precluding a national law under which the subsequent reduction of the taxable amount for VAT is subject to the condition that the taxable person entitled to the refund has an invoice in the relevant name providing proof of the transaction giving entitlement to that refund, even where such an invoice has not been issued and where proof of that transaction may be determined by other means.
57As stated in paragraph 52 above, where the price is reduced after the supply has taken place, Article 90(1) of the VAT Directive provides that the taxable amount is to be reduced accordingly under conditions to be determined by the Member States.
58Pursuant to Article 273 of the VAT Directive, Member States may impose the obligations which they deem necessary to ensure the correct collection of VAT and to prevent evasion, provided, inter alia, that that option is not relied on in order to impose additional invoicing obligations over and above those laid down in Chapter 3 of that directive.
59Given that Article 90(1) and Article 273 of the VAT Directive do not, outside the limits laid down therein, specify either the conditions or the obligations which the Member States may impose, those provisions give the Member States a margin of discretion, inter alia, as to the formalities to be complied with by taxable persons vis-à-vis the tax authorities in order to ensure that the taxable amount is reduced (judgment of 11 June 2020, SCT, C‑146/19, EU:C:2020:464, paragraph 35 and the case-law cited).
60However, measures that the Member States may adopt under Article 273 of the VAT Directive may not, in principle, derogate from the basis for charging VAT except within the limits strictly necessary for achieving that specific aim. They must have as little effect as possible on the objectives and principles of the VAT Directive and may not therefore be used in such a way that they would have the effect of undermining VAT neutrality, which is a fundamental principle of the common system of VAT established by the relevant EU legislation (judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 28).
61Consequently, the formalities to be complied with by taxable persons in order to exercise, vis-à-vis the tax authorities, the right to reduce the taxable amount for VAT purposes must be limited to those which make it possible to provide proof that, after the transaction has been concluded, part or all of the consideration will definitely not be received. It is for the national courts to ascertain whether that is true of the formalities required by the Member State concerned (judgment of 11 June 2020, SCT, C‑146/19, EU:C:2020:464, paragraph 37 and the case-law cited).
62In the present case, a requirement such as the one at issue in the main proceedings under which the taxable amount may be reduced, where the price is reduced after the supply has taken place, if the person entitled to the refund is in possession of an invoice in the relevant name providing proof of the transaction giving entitlement to that refund, may, in principle, contribute not only to ensuring the correct collection of VAT and preventing evasion but also to eliminating the risk of loss of tax revenue, and thus pursues the legitimate objectives set out in Article 273 of the VAT Directive (see, to that effect, judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraphs 32 and 33).
63However, in so far as possession of an invoice is, under national law, an essential condition for the reduction of the taxable amount, VAT neutrality is affected when it is impossible or excessively difficult for the person entitled to the refund to obtain such an invoice (see, to that effect, judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 38).
64It is apparent from the order for reference that Boehringer Ingelheim does not have invoices in respect of the payments it made to the State health insurance agency, since the latter issued only requests for payment.
65In such a situation, the principles of VAT neutrality and proportionality require the Member State concerned to permit the taxable person to establish by other means before the national tax authorities that the transaction giving entitlement to a reduction in the taxable amount was in fact carried out (see, to that effect, judgment of 26 January 2012, Kraft Foods Polska, C‑588/10, EU:C:2012:40, paragraph 40). This is especially so where, as in the present case, the transaction in question took place with regard to a State entity.
66In the light of the foregoing considerations, the answer to the second question is that Article 90(1) and Article 273 of the VAT Directive must be interpreted as precluding a national law under which the subsequent reduction of the taxable amount for VAT is subject to the condition that the taxable person entitled to the refund has an invoice in the relevant name providing proof of the transaction giving entitlement to that refund, even where such an invoice has not been issued and where proof of that transaction may be established by other means.
Costs
67Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the national court, the decision on costs is a matter for that court. Costs incurred in submitting observations to the Court, other than the costs of those parties, are not recoverable.
Operative part
On those grounds, the Court (Seventh Chamber) hereby rules:
1.Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted as precluding a national law that provides that a pharmaceutical company may not deduct from its taxable amount for value added tax the portion of its revenue obtained from the sale of medicinal products subsidised by the State health insurance agency, which it reimburses to that organisation under a contract concluded between the state health insurance agency and that company, because the amounts paid in that regard were not determined in accordance with terms set out in advance in that company’s commercial policy and because those payments were not made for promotional purposes.
2.Article 90(1) and Article 273 of Directive 2006/112 must be interpreted as precluding a national law under which the subsequent reduction of the taxable amount for value added tax is subject to the condition that the person entitled to the refund has an invoice in the relevant name providing proof of the transaction giving entitlement to that refund, even where such an invoice has not been issued and where proof of that transaction may be determined by other means.
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