Conceição Gamito authored the article “VAT and Portugal’s pharmaceutical industry: from landmark litigation to new recovery opportunities”, published by the International Tax Review, in which she analyses the practical consequences of recent VAT case law for Portugal’s pharmaceutical industry.
In the article, Conceição Gamito examines the long-running dispute over the VAT treatment of credit notes issued under the agreements between the Portuguese State and APIFARMA. The industry’s position was repeatedly upheld by the Portuguese tax arbitration tribunals and reinforced by the Supreme Administrative Court, which confirmed that these credit notes reduced the amount received by companies for medicines supplied to National Health Service entities, allowing the corresponding VAT to be adjusted.
As the author explains,“The real battleground has shifted: from establishing the principle to securing its financial consequences.” Against this background, the focus has now shifted to recovering VAT and interest from the Portuguese Tax Authority, reviewing adjustments that were never claimed and assessing any outstanding guarantee costs.
The analysis also highlights potential opportunities associated with other contribution mechanisms, rebates and risk-sharing arrangements. Although the case law concerning APIFARMA credit notes does not mean that every contribution gives rise to a VAT adjustment, it supports a substance-over-form analysis, particularly as regards whether the payment is directly linked to identified supplies and effectively reduces the consideration received by the supplier.
The article therefore highlights the importance of combining EU VAT analysis, procedural strategy and rigorous evidence. In the words of Conceição Gamito,“For businesses, the practical lesson is that an early, accurate assessment of the evidential and VAT position can materially shorten the path from dispute to recovery, and help identify related opportunities before they give rise to further litigation.”
Read the full article here.
