Pharma on the VAT radar

There is an interesting development in Romania concerning an unnamed pharma multinational. The Romanian tax authorities allege that the company has illegally underpaid VAT on drugs that were provided for free – as samples – to doctors and hospitals.

“In this way the collection of VAT was avoided drugs given for free as donations towards hospitals, shelters, foundations or as samples for doctors, which were actually designed to generate orders for pharma distributors”

It is difficult to get to the bottom of the matter reading the attached article – apparently it has something to do with a much broader bribery investigation.

It looks to me however as a common way of doing business in the pharma industry and in others as well.

www.business-review.eu/news/anaf-blames-...manias-budget-116238

Mark Houtzager