VAT rates change continually in the European Union and the rest of the world (e.g. this year’s VAT changes: Lebanon increase to 11%, Liechtenstein and Switzerland cut to 7.7%, Saudi Arabia introduction of 5%, etc.).
It is crucial to apply for the correct VAT rate (standard, reduced, super reduced rate, possible exemption), in order to comply with the local rules and regulations, benefit from possible optimizations (cash flow, input VAT deduction, correct pricing etc.) and minimize the risk of reputational damage.
For example in some countries like Ireland, your medtech products might be exempt from VAT with the possibility of respective cash flow optimizations approaches.
The further question that has to be addressed in that regard is:
On which basis do you define which VAT rate / possible exemption does apply?
Here the Customs Tariff number is key. The definition of the correct Customs Tariff number leads to the correct VAT rate application of your products. Please take into consideration the differences in the regions, e.g. 4 digit global harmonization but differences in the Sub headings – e.g. 1 digit in Switzerland / 2 digits in the European Union.
I highly recommend to review the application of the VAT rates of your products and the respective implementation in the master data of your ERP system on a regular basis – especially in the course of a possible ERP change (S/4HANA) and/or a new supply chain implementation.
Choose a holistic approach in order to assess and possibly optimise the health of your value chain (tax, legal, regulatory, operational, digital etc.). Use “scientific” out of the box thinking, innovation and an efficient delivery model as the tools to success.
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Are you a pharmaceutical company selling drugs outlined in the list of special drugs and therapies (“Spezialitätenliste”) in Switzerland? If yes, you could benefit from the following information in connection with Swiss VAT.
In December the United States enacted the most comprehensive tax reform in more than 30 years. For the Pharmaceutical and Life Sciences sector, the changes won’t just impact US based businesses but companies based outside the US who trade there.
Join PwC’s tax and industry specialists in a live webinar from New York.
Our specialists will be available to take questions following the presentation.
15 May 2018 | 14:00 BST (London) / 15:00 CEST (Paris) / 9:00AM EST (New York)
Presenter: Kathy Michael, PwC’s US Pharmaceutical & Life Sciences Tax Sector Leader
Access instructions: Click here to register and access the webinar. If you cannot view the webinar on your PC, you may dial in to the audio-only phone line: +1 651 291 3245 / Passcode: 448492 #
If you have any questions please don’t hesitate to contact me.
Please find some details by clicking on the title. The article linked describes import regulations for drugs into Switzerland. The most relevant take-away is:
A permission for trading medicines abroad (i.e. outside Switzerland) is not sufficient for the conclusion of manufacturing agreements.
With only such a permission, a Swiss company is not entitled to import medicines into Switzerland. The Swiss legislation on therapeutic products does not foresee any sufficient Good manufacturing practice (“GMP”) requirements for the qualified person that are required to monitor and qualify the production of medicines.
Does the new medical drug ordinance have an impact on your supply chain (commercial, VAT, Customs, regulatory license, regulatory permission, ERP etc.)?
We understand how hard you work in the pharmaceutical and life science industries to improve our health.
You are constantly creating new products through innovative ideas and exciting research and development but when it comes to clinical trials and the sales phase, suddenly there’s even more to think about.