“As opposed to its original format, the current clawback tax seems to apply to VAT collected on medicine sales as well, which breaches the Tax Code. (…) In addition, the manner in which the current format defines the taxation base and intervals creates confusion when applied to compensated medicine delivered before October 1, 2011, but paid after October 1, 2011, under the new regulation,” said Alex Milcev, partner within Ernst&Young Romania.
He explained that, in theory, these delieveries would fall under both clawback formats, which would cause double taxation.
Through the clawback mechanism, the state taxes medicine producers for any increase in consumption above a budget approved in the beginning of the year. Thus, the government stops discounting budget overshoots with free and compensated medicine, which occur every year and impose budget corrections.
The tax is in fact a percentage applied to all companies selling medicine included on the free and compensated lists. Starting from the difference between the spent budget and the planned one, the government will calculate a quarterly percentage applied to the sales generated by compensated medicine.
All companies pay this tax, regardless of their sales.