Changes in VAT rate on supply of medical devices
The amendment to the VAT Act in effect from 1 January 2022 narrows the scope of medical devices subject to the reduced VAT rate. If you buy or sell medical devices, we recommend you check whether this amendment also applies to your goods.
The change in the application of the VAT rate on the supply of medical devices derives from an amendment to the Public Health Insurance Act.
From 1 January 2022, the first reduced VAT rate (15%) shall apply only to medical devices that:
- are for the exclusive personal use of the sick, for the treatment of illness, or to alleviate its consequences
- fall under customs nomenclature code 01-96
- belong to Schedule 4 to the Public Health Insurance Act or to Table 1 of Section C of Schedule 3 to the Public Health Insurance Act
- are not non-categorised medical devices, cellulose cotton wool, or plasters other than non-hypoallergenic plasters.
The first reduced rate can also be applied when meeting the specific characteristics given in Schedule 3 to the VAT Act in relation to a specific code of the combined customs nomenclature (a change of wording especially for medical devices falling under codes 01-96 intended for a specific patient, codes 90, 48, 64, 66, 84, 85, 87, 90 and 91).
The reduced VAT rate shall also apply to accessories for medical devices listed in Schedule 3 to the VAT Act.
If you are not sure which rate to apply, ask the tax authorities for a binding assessment.
Finally, we draw attention to the repairs (and now also modifications) of medical devices subject to the first reduced VAT rate: these have been moved from Schedule 2 to Section 47 of the VAT Act. Therefore, if the supply of a product is now subject to the standard VAT rate, the repair or modification of the related item will also be subject to the standard VAT rate (and vice versa).
The transitory provisions for the application of the act are standard, i.e., tax liabilities arising before the effective date of the amendment (according to the date of the taxable supply) shall be governed by the wording of the act effective before the effective date of this amendment. The new wording of the act shall apply to goods supplied after 1 January 2022.