New rules has been brought on pharmaceutical companies regarding VAT and Paybacks which has been already undergone since 1st January 2018, mostly instructing for the inclusion of VATs in different forms of Paybacks.
According to the new rule any paybacks made earlier for community budget and hospital budget before the rule came into action, the VAT can be recovered by the deadline for the filling of the VAT return for 2018. In order to recover VAT on pay-backs, pharmaceutical companies have to issue a specific accounting document to be kept according to Art. 39 of the Italian VAT Law, indicating the paid amounts as determined by the Italian Pharma Agency (AIFA). Pharmaceutical companies can now recover VAT included in so-called ”pay-back” amounts paid to the Italian Government by deducting that amount from subsequent payments.
This budget law clarifies a variety of issues regarding the VAT on paybacks. If any VAT have been recovered unduly in the past, a corresponding adjustment must now be made in the VAT ledger, according to the new rule. This will bring in an equivalent extraordinary cost that would be deducted for direct tax purposes in the tax year from 1st January 2018 onward.
