Keywords
Summary

Keywords

Tax provisions - Harmonisation of laws - Turnover taxes - Common system of value added tax - Option for Member States to apply a reduced rate on a temporary basis - Application of a reduced rate of 2.1% only to medicinal products reimbursable under the social security system and of 5.5% to other medicinal products - Whether permissible - Compliance with the conditions laid down in Article 28(2)(a) of the Sixth Directive

(Council Directives 67/228, Art. 17, final indent, and 77/388, Arts 12(3)(a) and 28(2)(a))

Summary

$$By introducing and maintaining in force legislation on value added tax under which medicinal products reimbursable under the social security system are taxed at the reduced rate of 2.1% whereas other medicinal products are taxed at the reduced rate of 5.5%, a Member State has not failed to fulfil its obligations under Article 12 of Sixth Directive 77/388 on the harmonisation of the laws of the Member States relating to turnover taxes.

The rate of value added tax of 2.1%, which is below the minimum rate of 5% laid down in Article 12(3)(a) of the Sixth Directive, is justified under Article 28(2)(a) of that directive in so far as that rate existed on 1 January 1991, is in accordance with Community law, in so far as it is consistent with the principle of fiscal neutrality inherent in the common system of value added tax, given that reimbursable and non-reimbursable medicinal products are not similar products in competition with each other, and meets the criteria set out in the final indent of Article 17 of the Second Directive inasmuch as the application of the reduced rate to reimbursable medicinal products clearly constitutes a social reason, as it necessarily reduces the charges borne by the social security system and also benefits final consumers, whose health expenses are thereby reduced.

( see paras 21, 25, 32-33 )