Novo Nordisk A/S v Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (C-248/23)

Contents

Judgment of the Court (First Chamber)12 September 2024^note(Reference for a preliminary ruling — Common system of value added tax (VAT) — Directive 2006/112/EC — Article 90(1) — Reduction of the taxable amount consequent on a price reduction after the supply takes place — Contributions paid by a pharmaceutical company to the national health insurance agency — National tax legislation excluding contributions paid by a pharmaceutical company to the public health insurance agency pursuant to an ex lege obligation from the benefit of the reduction of the taxable amount)In Case C‑248/23,REQUEST for a preliminary ruling under Article 267 TFEU from the Fővárosi Törvényszék (Budapest High Court, Hungary), made by decision of 30 March 2023, received at the Court on 18 April 2023, in the proceedingsNovo Nordisk A/SvNemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága,THE COURT (First Chamber),composed of A. Arabadjiev, President of the Chamber, T. von Danwitz, P.G. Xuereb (Rapporteur), A. Kumin and I. Ziemele, Judges,Advocate General: T. Ćapeta,Registrar: I. Illéssy, Administrator,having regard to the written procedure and further to the hearing on 19 March 2024,after considering the observations submitted on behalf of:– Novo Nordisk A/S, by T. Bodrogi-Szabó, Z. Hegymegi-Barakonyi and G. Riszter, ügyvédek,– the Hungarian Government, by M.Z. Fehér and K. Szíjjártó, acting as Agents,– the European Commission, by V. Bottka and J. Jokubauskaitė, acting as Agents,after hearing the Opinion of the Advocate General at the sitting on 6 June 2024,gives the following

Judgment

1This request for a preliminary ruling concerns the interpretation of Article 90(1) 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 Novo Nordisk A/S and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and Customs Administration, Hungary; ‘the Appeals Directorate’), regarding the decision by which it refused to permit Novo Nordisk to deduct ex lege payments made to the Nemzeti Egészségbiztosítási Alapkezelő (National Health Insurance Fund Management Agency, Hungary; ‘the NEAK’) from the taxable amount for value added tax (VAT) purposes.

Legal context

European Union law

3Article 73 of the VAT Directive provides:‘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 78 of that directive reads as follows:‘The taxable amount shall include the following factors:(a) taxes, duties, levies and charges, excluding the VAT itself;(b) incidental expenses, such as commission, packing, transport and insurance costs, charged by the supplier to the customer.For the purposes of point (b) of the first paragraph, Member States may regard expenses covered by a separate agreement as incidental expenses.’

5Chapter 5 of Title VII of that directive, entitled ‘Miscellaneous provisions’, contains Article 90 thereof, which 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.’

6Article 401 of that directive states:‘Without prejudice to other provisions of Community law, this Directive shall not prevent a Member State from maintaining or introducing taxes on insurance contracts, taxes on betting and gambling, excise duties, stamp duties or, more generally, any taxes, duties or charges which cannot be characterised as turnover taxes, provided that the collecting of those taxes, duties or charges does not give rise, in trade between Member States, to formalities connected with the crossing of frontiers.’

Hungarian law

7Paragraph 65 of the az általános forgalmi adóról szóló 2007. évi CXXVII. törvény (Law No CXXVII of 2007 on value added tax) (Magyar Közlöny 2007/155. (XI.16.)) provides:‘In respect of the supply of goods or services, the taxable amount, unless otherwise specified in the present law, shall consist of the consideration, expressed in money 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 type of subsidies directly linked to the price of the supply of goods or services.’

8Paragraph 36 of the a biztonságos és gazdaságos gyógyszer- és gyógyászati segédeszköz-ellátás, valamint a gyógyszerforgalmazás általános szabályairól szóló 2006. évi XCVIII. törvény (Law No XCVIII of 2006 laying down general provisions on the reliable and economically viable supply of medicinal products and medical equipment and on the marketing of medicinal products) (Magyar Közlöny 2006/146. (XI.29)) (‘the Gyftv’) states, in its subparagraph 1:‘The holder of the marketing authorisation for a medicinal product or, where the holder does not carry on any distribution activities in Hungary, the distributor – appointed by agreement concluded between them and approved by the State tax authority – and the person who has submitted an application for a social security subsidy for a preparation and, if that person does not distribute the preparation, the distributor thereof …, shall be subject, as regards medicinal products and preparations … sold in pharmacies and benefiting from any kind of public funding, with the exception of the medicinal products referred to in Paragraph 38(1) and the preparations referred to in the legislation on infant formula and follow-on formula, to the obligation to pay 20% of a part of the social security subsidy, based on the sales data according to medical prescriptions for the reference month, in proportion to the production price or the import price … The holder of the marketing authorisation for the medicinal product shall be subject, as regards the preparations referred to in the legislation on infant formula and follow-on formula sold in pharmacies and benefiting from any kind of public funding, to the obligation to pay 10% of a part of the social security subsidy, based on the sales data according to medical prescriptions for the reference month, in proportion to the production price (production price/consumer price). The amount of the payment obligation shall be calculated for each product and for each type of subsidy. …’

9Paragraph 37 of the Gyftv is worded as follows:(1) The National Health Insurance Fund Management Agency shall forward to the person liable for payment or shall publish on its website, no later than the tenth day of the second calendar month following the reference month, the subsidy and sales data needed to discharge the payment obligations laid down in Paragraph 36(1) and (2).(2) In accordance with the payment obligations laid down in Paragraph 36(1) and (2), the holder of the marketing authorisation for the medicinal product or of the wholesale distribution authorisation for the medicinal product shall, no later than the twentieth day of the third calendar month following the reference month, file a return with the State tax authority using the form made available by that authority and, at the same time, shall make payment into the account opened for that specific purpose by the State tax authority with the Treasury.’

10Paragraph 40 of the Gyftv states:‘The State tax authority(a) immediately after collecting the amounts received pursuant to Paragraph 36(1), (2), (4) and (4a),(b) [abrogated]shall transfer them to the account of the National Health Insurance Fund opened with the Treasury, laid down in a special provision.’

11Paragraph 40/A of the Gyftv provides:(1) In addition to the payment obligation laid down in Paragraph 36(1), and provided that there is no product benefiting from public funding placed on the market under another brand name by another holder of a marketing authorisation, but whose active substance and method of administration correspond to those of the product concerned, the holder of the marketing authorisation for a medicinal product or, where the holder does not carry on any distribution activities in the country, the distributor appointed by agreement concluded between them and approved by the State tax authority … shall be subject, as regards medicinal products sold in pharmacies and benefiting from any kind of public funding for at least 6 years, the price of which, taken as the basis for that funding, exceeds 1000 [Hungarian forint (HUF)] [approximately EUR 2.63], to the obligation to pay 10% of a part of the social security subsidy, based on the sales data according to medical prescriptions for the reference month, in proportion to the production price or the import price … The payment obligation shall be calculated for each product and for each type of subsidy.…(5) The State tax authority shall inform the health insurance agency of the approval of the agreement concluded between the holder of the marketing authorisation and the distributor, referred to in subparagraph 1, within 8 days of the date of approval.(6) The National Health Insurance Fund Management Agency shall forward to the person liable for payment or shall publish on its website, no later than the tenth day of the second calendar month following the reference month, the subsidy and sales data needed to discharge the payment obligation laid down in subparagraph 1.(7) In accordance with the payment obligation laid down in subparagraph 1, the holder of the marketing authorisation for the medicinal product shall, no later than the twentieth day of the third calendar month following the reference month, file a return with the State tax authority using the form made available by that authority and, at the same time, shall make payment into the account opened for that specific purpose by the State tax authority with the Treasury.(8) The National Health Insurance Fund Management Agency shall provide, at the same time as the data forwarding service referred to in subparagraph 6, an electronic data forwarding service for the benefit of the State tax authority concerning the data needed to monitor the persons liable for payment.(9) The State tax authority shall transfer the amount received pursuant to subparagraph 1 to the account of the National Health Insurance Fund opened with the Treasury, as indicated in special rules, and shall carry out that transfer immediately after payment is made.’

The dispute in the main proceedings and the question referred for a preliminary ruling

12Novo Nordisk is a company registered in Denmark that manufactures and markets medicinal products. As part of its activities, that company sells its medicinal products in Hungary.

13The retail sale of medicinal products in that Member State is carried out, with the exception of hospitals, through pharmacies. Pharmacies are supplied by wholesale distributors, and wholesalers by distributors of pharmaceutical products, such as Novo Nordisk.

14Some medicinal products may be subsidised by the NEAK, by means of a ‘purchase price subsidy’ scheme. Under that scheme, the NEAK subsidises the purchase price of medicinal products that are sold on prescription and funded by the social security system in the context of outpatient care (‘the social security subsidy’). Payment of the price of the subsidised medicinal product is shared between the NEAK and the patient. The latter pays the pharmacy an amount, known as ‘the subsidised price’, which corresponds to the difference between the price of the medicinal product and the amount of the social security subsidy. The NEAK subsequently reimburses the amount of that subsidy to the pharmacy. The price of the medicinal products received by pharmacies, which is the taxable amount for VAT purposes, thus comprises two parts: first, the social security subsidy and, second, 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 the NEAK.

15First, Novo Nordisk belongs to a group of companies that, in its own name and on behalf of Novo Nordisk, entered into a subsidy agreement with the NEAK on a portfolio of medicinal products and agreements on subsidised price volumes (‘the price volume agreements’). In accordance with the price volume agreements, Novo Nordisk undertook to make a payment to the NEAK – of an amount fixed in those agreements by reference to the volume of subsidised medicinal products distributed by it – to be deducted from the revenue obtained from the sale of those medicinal products.

16Secondly, pursuant to Paragraph 36(1) and Paragraph 40/A(1) of the Gyftv, Novo Nordisk, as a distributor of medicinal products, is subject to an ex lege obligation to make payments corresponding to 20% and 10%, respectively, of a portion of the social security subsidies relating to all medicinal products that are sold in pharmacies and benefit from public funding and that were sold by it (‘the ex lege obligation’).

17The amounts due under that obligation are paid into the account of the tax authority, which immediately transfers them to the account of the health insurance fund managed by the NEAK.

18By fulfilling that obligation, Novo Nordisk forgoes a proportion of the consideration obtained from the wholesalers after the sale of the medicinal products, thereby reducing its turnover by a predetermined percentage set by national legislation. Whether or not the ex lege obligation applies and, where appropriate, the overall amount payable thereunder depend on the volume of medicinal products sold and the amount of the social security subsidy.

19As a distributor of medicinal products, Novo Nordisk filed a corrected VAT return with the first-tier tax authority for January 2016, including a reduction in the taxable amount for the period concerned. The amount of that reduction corresponded to the payments made by Novo Nordisk in accordance with the price volume agreements and the ex lege obligation.

20The first-tier tax authority rejected that corrected tax return and refused the subsequent reduction in the taxable amount.

21The Appeals Directorate, which heard Novo Nordisk’s complaint against that decision, considered, based on the judgment of 6 October 2021, Boehringer Ingelheim (C‑717/19, EU:C:2021:818), that Novo Nordisk was allowed to deduct from the taxable amount the amounts which it had paid pursuant to the price volume agreements.

22However, the Appeals Directorate refused to deduct from that taxable amount the payments made by Novo Nordisk under the ex lege obligation (‘the disputed payments’). The Appeals Directorate considered that those payments, which were made pursuant to a statutory obligation, do not constitute a price reduction deductible from the taxable amount for VAT purposes. It stated that payments made under Paragraph 36(1) and Paragraph 40/A(1) of the Gyftv should be considered to be a tax, since, first, they are not intended for the final consumer but rather for the tax authority, and, second, they are primarily a means to achieve budgetary and health objectives.

23Novo Nordisk brought an appeal against the decision of the Appeals Directorate before the Fővárosi Törvényszék (Budapest High Court, Hungary), which is the referring court.

24Relying on the case-law arising from the judgments of 24 October 1996, Elida Gibbs (C‑317/94, EU:C:1996:400), and of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006), the referring court considers, first of all, that the NEAK must be considered to be the final consumer of the medicinal products supplied by Novo Nordisk. The fact that the direct beneficiary of those supplies is not the NEAK, which subsequently reimburses the amount of the subsidy to the pharmacy, but the insured persons themselves who pay the subsidised price to the pharmacy is not such as to break the direct link between those supplies and the consideration received, with the result that the amount collected by the tax authority cannot exceed that paid by the final consumer.

25Next, that court observes that the explanatory notes to the draft law establishing the ex lege obligation describes the disputed payments as a discount.

26Lastly, that court states that the ex lege obligation amounts to a price reduction within the meaning of Article 90(1) of the VAT Directive, since, in the circumstances of the case in the main proceedings, Novo Nordisk did not receive the full consideration for the products it sold.

27The referring court notes, however, that the Court has not yet ruled on the question whether the fact that the disputed payments are made pursuant to an ex lege obligation precludes their classification as a price reduction, within the meaning of Article 90(1) of the VAT Directive.

28In those circumstances, the Fővárosi Törvényszék (Budapest High Court) decided to stay the proceedings and to refer the following question to the Court of Justice for a preliminary ruling:‘Must Article 90(1) of [the VAT Directive] be interpreted as precluding the national legislation at issue in the main proceedings, under which a pharmaceutical company which makes [ex lege payments] to the State health insurance agency based on the revenue obtained from publicly funded pharmaceutical products is not entitled subsequently to reduce the taxable amount [for VAT purposes], by reason of the fact that the payments are made ex lege, [while] payments made under a [price] volume agreement and investments made by the company in research and development in the health sector may be deducted from the base amount for the payment obligation, and [where] the amount payable is collected by the State tax authority, which immediately transfers it to the State health insurance agency?’

Consideration of the question referred

29By its question, the referring court asks, in essence, whether Article 90(1) of the VAT Directive precludes national legislation under which a pharmaceutical company, which is required to pay a portion of its revenue obtained from its sales of publicly funded pharmaceutical products to the State health insurance agency, is not entitled to a subsequent reduction in the taxable amount for those payments, by reason of the fact that those payments are made ex lege, while its taxable amount can be reduced by deducting payments made under a price volume agreement and expenses incurred by the company in research and development in the health sector, and where the amounts due are collected by the tax authority, which immediately transfers them to the State health insurance agency.

30In accordance with Article 90(1) of the VAT Directive, in the case of cancellation, refusal or total or partial non-payment, or where the price is reduced after the supply takes place, 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 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 41 and the case-law cited).

31As regards the context to which that provision relates, it is important to note that Article 73 of the VAT Directive provides that 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 those supplies.

32In that regard, it should be borne in mind 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 (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 39 and the case-law cited).

33In the present case, it is apparent from the order for reference that Novo Nordisk markets, on the Hungarian market, medicinal products subsided by the NEAK through wholesalers to pharmacies which sell them to persons covered by the State health insurance, subject to payment by those persons of the difference between the price of the medicinal product and the amount of the social security subsidy paid directly by the NEAK to pharmacies. By virtue of the ex lege obligation, Novo Nordisk pays to the NEAK, through the tax authority, amounts corresponding to 20% and 10%, respectively, of a portion of the social security subsidies relating to all medicinal products, distributed in pharmacies and benefiting from public funding, sold by Novo Nordisk. Those amounts are retained from the revenue from the sale of those medicinal products. Even if the formal recipient of the disputed payments is the tax authority, that authority is required to transfer immediately the amounts paid to the NEAK.

34In that context, both the tax authority and the Hungarian Government consider that the terms under which the disputed payments were made by Novo Nordisk justify their classification as a tax, within the meaning of point (a) of the first paragraph of Article 78 of the VAT Directive, and, consequently, that those payments must be included in the taxable amount for the supply of the medicinal products.

35In that regard, the Court has already clarified that, in order for taxes, duties, levies and charges to be included in the taxable amount for VAT, even though they do not represent any added value and do not constitute the financial consideration for the supply of goods or services, they must have a direct link with that supply, and the question whether the chargeable event for the tax, duty, levy or charge concerned coincides with that for VAT is a decisive factor for the purposes of establishing the existence of such a direct link (see, to that effect, judgments of 20 May 2010, Commission v Poland, C‑228/09, EU:C:2010:295, paragraph 30, and of 11 June 2015, Lisboagás GDL, C‑256/14, EU:C:2015:387, paragraph 29 and the case-law cited).

36First of all, it is apparent, subject to verification by the referring court, that the disputed payments do not represent any added value.

37Next, it must be stated that, since the portion of the sale price of the subsidised medicinal products which is paid by Novo Nordisk, through the tax authority, to the NEAK is fixed in advance and is mandatory, it cannot be regarded as part of the financial consideration for the supply of those medicinal products actually received by Novo Nordisk (see, to that effect, judgment of 19 July 2012, International Bingo Technology, C‑377/11, EU:C:2012:503, paragraph 28).

38Lastly, it is apparent from the order for reference, first, that the event giving rise to the ex lege obligation on the taxable person, as provided for in Paragraph 36(1) and Paragraph 40/A(1) of the Gyftv, is the sale of the medicinal products and, second, that the overall amount due under that obligation is determined according to the volume of medicinal products sold and the amount of the social security subsidy.

39As for the option, afforded by the national legislation to pharmaceutical companies, to deduct from the amount of the disputed payments the contributions paid under the price volume agreements relating to the reference period, exclusive of VAT, as well as the expenses allocated to research and development, if the exercise of that option is, where appropriate, likely to reduce the amount of those payments, it has no effect on the fact that, in the light of the considerations set out in paragraphs 36 to 38 of the present judgment, those payments may be classified as a tax, within the meaning of point (a) of the first paragraph of Article 78 of the VAT Directive.

40First, the NEAK is the final beneficiary of the payments made under both the ex lege obligation and the price volume agreements.

41Secondly, the Hungarian Government has not provided any details concerning the operating procedures of the mechanism for deducting the amount of payments arising from the ex lege obligation regarding expenses in research and development in the health sector; consequently, there is nothing to suggest that that option is relevant for considering that the disputed payments are taxes that must be included in the taxable amount for VAT purposes under point (a) of the first paragraph of Article 78 of the VAT Directive.

42In those circumstances, the chargeable event for the disputed payments may coincide with that of the VAT due for subsidised medicinal products sold. Those payments can therefore be included in the taxable amount for VAT purposes under point (a) of the first paragraph of Article 78 of the VAT Directive.

43As regards the question whether the amounts paid by pharmaceutical companies to social security agencies consequent on the sale of subsidised medicinal products may, nevertheless, fall within Article 90(1) of the VAT Directive, it should be borne in mind, first, that the Court has already held that a discount granted, under national law, by a pharmaceutical company to a private health insurance company results, for the purposes of Article 90(1) of the VAT Directive, in a reduction of the taxable amount in favour of that pharmaceutical company, where it supplies medicinal products via wholesalers to pharmacies which make supplies to persons covered by private health insurance that reimburses the purchase price of the medicinal products to persons it insures (judgment of 20 December 2017, Boehringer Ingelheim Pharma, C‑462/16, EU:C:2017:1006, paragraph 46).

44In that regard, the Hungarian Government’s argument that, in the case which gave rise to that judgment, the private nature of the health insurance company constituted a fundamental difference, whereas, in the present case, the disputed payments are tax revenue in nature, is irrelevant. As is apparent from paragraph 33 of the present judgment, the actual beneficiary of the disputed payments is not the tax authority but the NEAK, which uses them to subsidise the purchase price of the medicinal products, in the same way as in that case.

45Secondly, the Court has held that Article 90(1) of the VAT Directive precludes 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 latter 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 that those payments were not made for promotional purposes (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 55).

46The terms under which, in the present case, the disputed payments were made under the ex lege obligation cannot call into question the classification of those payments as a price reduction within the meaning of Article 90(1) of the VAT Directive.

47First, the Court has already clarified that the scope of Article 90(1) of the VAT Directive covers price reductions resulting both from agreements concluded between a pharmaceutical company and a State health insurance agency and from ex lege obligations such as those at issue in the main proceedings (see, to that effect, judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraphs 48 and 49).

48Furthermore, the parties to the proceedings confirmed at the hearing that the purpose of the payments made under the ex lege obligation is identical to that of those made on the basis of the price volume agreements concluded between the social security agency and the pharmaceutical companies, namely to subsidise the purchase price of medicinal products sold on prescription and funded by the social security system in the context of outpatient care.

49Secondly, the fact that, in the dispute in the main proceedings, the direct beneficiary of the supply of the medicinal products at issue was not the State health insurance agency, which subsequently reimburses 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 (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 45 and the case-law cited).

50In 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, that 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 (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 46).

51In that regard, as regards the determination of the final consumer, the argument put forward by the Hungarian Government that the amounts due under the ex lege obligation are collected by the tax authority is not relevant. As recalled in paragraph 44 of the present judgment, the latter transfers those amounts immediately to the NEAK, which grants a subsidy covering the purchase price of medicinal products sold on prescription and funded by social security in the context of outpatient care.

52The mechanism of that immediate transfer supports the classification of the disputed payments as a price reduction within the meaning of Article 90(1) of the VAT Directive.

53Contrary to what the Hungarian Government maintains, Article 401 of that directive does not preclude that interpretation, in the light of the context of that article. The fact that Member States may maintain or introduce certain taxes, duties or charges under the conditions laid down in that article does not, in any way, prevent such taxes, duties or charges from being taken into account, pursuant to point (a) of the first paragraph of Article 78 of that directive, for the purposes of determining the taxable amount for VAT, as a price reduction, within the meaning of Article 90(1) of that directive.

54Furthermore, it is apparent from the order for reference that, by the disputed payments, Novo Nordisk is waiving a proportion of the consideration paid by the wholesaler.

55It would not be consistent with the principle of fiscal neutrality recalled in paragraph 32 of the present judgment for the taxable amount on which the VAT, for which the pharmaceutical company is liable, as a taxable person, is calculated to be higher than the amount which it ultimately received. If this were the case, that principle would not be complied with (see, to that effect, judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:T:2021:818, paragraph 44 and the case-law cited).

56Thus, since a portion 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 (judgment of 6 October 2021, Boehringer Ingelheim, C‑717/19, EU:C:2021:818, paragraph 47).

57The pharmaceutical company was not able to freely dispose of the full amount of the price received on the sale of its products to wholesalers (see, by analogy, judgment of 20 December 2017, Boehringer Ingelheim Pharma, C‑462/16, EU:C:2017:1006, paragraph 43 and the case-law cited).

58In the light of the foregoing considerations, the answer to the question referred is that Article 90(1) of the VAT Directive must be interpreted as precluding national legislation under which a pharmaceutical company, which is under an obligation to pay to the State health insurance agency a portion of its revenue obtained from its sales of publicly funded pharmaceutical products, is not entitled to a subsequent reduction in the taxable amount under those payments by reason of the fact that those payments are made ex lege, while its taxable amount can be reduced by deducting payments made under a price volume agreement and expenses incurred by the company in research and development in the health sector, and where the amounts due are collected by the tax authority, which immediately transfers them to the State health insurance agency.

Costs

59Since these proceedings are, for the parties to the main proceedings, a step in the action pending before the referring 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 (First Chamber) hereby rules: Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added taxmust be interpreted as precluding national legislation under which a pharmaceutical company, which is under an obligation to pay to the State health insurance agency a portion of its revenue obtained from its sales of publicly funded pharmaceutical products, is not entitled to a subsequent reduction in the taxable amount under those payments by reason of the fact that those payments are made ex lege, while its taxable amount can be reduced by deducting payments made under a price volume agreement and expenses incurred by the company in research and development in the health sector, and where the amounts due are collected by the tax authority, which immediately transfers them to the State health insurance agency.