Inconsistent VAT Rates for IVD Discussed at Roundtable

On February 18, 2025, the Subcommittee on Drug Policy, Medical Equipment, and Medical Devices hosted a roundtable discussion on VAT rates for IVD. The meeting brought together representatives of suppliers from the CZEDMA association and government authorities, including the Ministry of Health (MZ), the State Institute for Drug Control (SÚKL), the Ministry of Finance (MF), the General Financial Directorate (GFŘ), and the Customs Administration. Porta Medica Legal introduced the issue, moderated the discussion, and provided a closing summary.

Although more than a year has passed since the VAT Act amendment, which was meant to clarify conditions for applying the reduced VAT rate, IVD suppliers continue to face challenges due to inconsistent VAT application for nearly identical IVDs. This creates a significant disadvantage for some suppliers in public procurement, where the total price, including VAT, is often a key evaluation criterion. Suppliers encounter two main application issues. The first relates to the interpretation of “single-use devices” and the absence of a requirement to indicate this on the labeling of legacy IVD devices. The second issue concerns the definition of “pharmaceutical products.” Due to inconsistent interpretations, equivalent IVDs are classified differently by customs authorities. The situation is complicated by the fact that for customs purposes the latest version of the customs tariff nomenclature is used, while for VAT purposes the old version from 1 January 2018 is fixed at the level of the law.

This inconsistency in interpretation was the key driver behind the roundtable discussion. While it was beyond the scope of the event to provide an immediate solution to all the pressing issues faced by IVD suppliers, the meeting was seen as beneficial overall. It was evident that all participants recognized the seriousness of the situation and the need for solutions. The discussion among stakeholders deepened, and some progress was made. The roundtable shed more light on the interpretation of single-use devices, and SÚKL’s commitment to assisting customs authorities and the GFŘ in disputed cases was a positive development. This step could help reduce uncertainty among suppliers and resolve some existing ambiguities. Additionally, SÚKL pledged to define certain IVD groups inherently designed for single use, such as self-tests.

We believe this initiative will contribute to gradually standardizing practice, ensuring that equivalent IVDs are not subject to different VAT rates. It is crucial to continue discussions to establish an effective and unified approach among all stakeholders.

Author: Veronika Moravová