High-dose vitamins can be a drug for tax purposes

BFH: Full sales tax on medicinal manufacturer self-promotion

A high-dose vitamin and nutrient mixture can be considered a medicine and therefore subject to full sales tax of 19 percent. This is the case, if the drug according to the package is acute or at least preventively help against certain diseases, as the Federal Finance Court (BFH) in Munich in a decision on Wednesday, January 16, 2019, ruled verdict (Az .: VII R 9 / 17). Thereafter, it is not necessary that a specific mechanism of action be described or actual efficacy demonstrated.

Specifically, it is about capsules with a nutrient mixture of high-dose vitamins and trace elements. The package leaflet is a "dietary supplement for special purposes, supplemented balanced adult diet for the dietary treatment of age-related macular degeneration".

The manufacturer says that the capsules are a "food preparation" and therefore subject to food as the reduced VAT rate of seven percent. In contrast, the tax office considers the capsules as drugs, which are subject to the VAT rate of 19 percent.

In the first instance, the Niedersächsisches Finanzgericht (FG) in Hanover was right in favor of the manufacturer. Because this has no "mechanism of action" described as it is based on a drug.

But this is not necessary, now clarified the BFH. The FG had misunderstood an earlier BFH decision here. Also, the tax office does not have to check the accuracy of the manufacturer's information or even prove the effectiveness of the drug in order to classify it as a medicine.

The decisive factor is whether the manufacturer himself attributes to the packaging, the label or the leaflet "therapeutic preparations or prophylactic properties to his preparations there in relation to certain diseases". He then had to be held on to it.

In the dispute, the manufacturer specifically named the age-related macular degeneration. This goes clearly beyond the usual information on dietary supplements such as "for healthy eyesight," according to the ruling of 18 September 2018, now published in writing.

However, according to the BFH, the package leaflet here is in a certain contradiction to the information on the packaging used by the Finanzgericht. Therefore, the FG Hannover should re-examine the case. mwo / fle