Opinion of the Advocate General — ECLI:EU:C:2024:464
Date: 2024-06-06
Language of the case: Hungarian
Procedure: Reference for a preliminary ruling
Origin: Hungary

Translation C-248/23 – 1 
Case C-248/23 
Request for a preliminary ruling 
Date lodged: 
18 April 2023 
Referring court: 
Fővárosi Törvényszék (Hungary) 
Date of the decision to refer: 
30 March 2023 
Applicant: 
Novo Nordisk AS 
Defendant: 
Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága 
  
Fővárosi Törvényszék (Budapest High Court, Hungary) 
[…] 
In the administrative-law tax proceedings brought as a result of the action lodged 
by Novo Nordisk AS ([…] Bagsvaerd, Denmark) […], the applicant, against the 
Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of 
the National Tax and Customs Authority) ([…] Budapest, Hungary) […], the 
defendant, the Budapest High Court has issued the following 
ORDER: 
Pursuant to Article 267 of the Treaty on the Functioning of the European Union, 
the referring court […] refers the following question to the Court of Justice of the 
European Union for a preliminary ruling: 
Must Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on 
the common system of value added tax be interpreted as precluding the 
national legislation at issue in the main proceedings, under which a 
pharmaceutical company which makes payments ex lege to the State health 
insurance agency based on the revenue obtained from publicly funded 
EN 
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pharmaceutical products is not entitled subsequently to reduce the taxable 
amount, by reason of the fact that the payments are made ex lege, that 
payments made under a funding volume agreement and investments made by 
the company in research and development in the health sector may be 
deducted from the base amount for the payment obligation, and that the 
amount payable is collected by the State tax authority, which immediately 
transfers it to the State health insurance agency? 
[…] [Matters of national procedural law] 
GROUNDS 
I. Facts 
1 In Hungary, the retail sale of medicinal products is carried out through 
pharmacies, except in hospitals. Pharmacies are supplied by wholesale distributors 
and those distributors are, in turn, supplied by distributors of pharmaceutical 
products. 
2 Medicinal products may be subsidised by the Nemzeti Egészségbiztosítási 
Alapkezelő (National Health Insurance Fund Management Agency, Hungary; ‘the 
NEAK’) through the ‘purchase price subsidy’ scheme. Under that scheme, the 
NEAK subsidises the purchase price of medicinal products which are sold on 
prescription and funded by the social security system in the context of outpatient 
care. Payment of the price of the subsidised medicinal product is then shared 
between the NEAK and the patient. The patient pays the pharmacy an amount, 
known as the ‘subsidised price’, which is the difference between the price of the 
medicinal product and the subsidy paid by the NEAK. The NEAK subsequently 
reimburses the amount of the subsidy to the pharmacy. The price of the medicinal 
products received by the pharmacy, which is the taxable amount for value added 
tax (‘VAT’), thus comprises two parts: the subsidy paid by the NEAK and the 
‘subsidised price’ paid by the patient. The pharmacy is therefore required to pay 
VAT on both the amount paid by the patient and the sum paid by the NEAK. 
3 Following a review in which various factors are taken into account, the NEAK 
decides whether to include a medicinal product on the list of subsidised medicinal 
products and then determines the amount of the subsidy depending on the price set 
by the distributor. 
4 Novo Nordisk AS is a company registered in Denmark which manufactures and 
markets medicinal products. In the course of its business, it sells the medicinal 
products it manufactures in Hungary. 
5 Novo Nordisk AS, together with Novo Nordisk Hungária Kft., belongs to a group 
of companies which, in its own name and on behalf of Novo Nordisk AS, entered 
into agreements with the NEAK on the portfolio of subsidised projects and on 
funding volume. Under the funding volume agreements (as regards the project 
NOVO NORDISK 
 
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portfolio and the packaging price), Novo Nordisk AS made payments to the 
NEAK to reflect sales of the medicinal products subsidised by the social security 
system (‘the payment obligation under the funding volume agreements’) and, to 
that end, used a portion of the revenue obtained from the sale of those medicinal 
products. 
6 In addition to that contractual obligation, pursuant to Articles 36(1) and 40/A(1) 
of the biztonságos és gazdaságos gyógyszer- és gyógyászatisegédeszköz-ellátás, 
valamint a gyógyszerforgalmazás általános szabályairól szóló 2006. évi XCVIII. 
törvény (Law No XCVIII of 2006 laying down general provisions on the reliable 
and economically viable supply of medicinal products and medical equipment and 
on the marketing of medicinal products; ‘the Law on the marketing of medicinal 
products’), Novo Nordisk AS made payments of 20% and 10% in relation to the 
social security subsidy for medicinal products benefitting from any kind of public 
funding sold by that company through pharmacies (‘the ex lege payment 
obligation’). 
7 In discharging the ex lege payment obligation after the sale of the products, Novo 
Nordisk AS waives part of the consideration it receives from the wholesaler, that 
is to say, part of its turnover. Whether or not the ex lege payment obligation 
applies and the overall amount payable thereunder depends on the quantity of 
medicinal products sold and the amount of the social security subsidy. 
8 In essence, under the ex lege payment obligation, Novo Nordisk AS reimburses 
the NEAK, which funds the medicinal products, a fixed percentage set in advance 
in respect of each medicinal product with a subsidised purchase price. 
9 The ex lege payment obligation is discharged by means of a payment, pursuant to 
a tax return, into the account of the State tax authority, which immediately 
transfers the amount paid to the account of the National Health Insurance Fund. 
10 On 16 July 2021, Novo Nordisk AS, in its capacity as distributor of 
pharmaceutical products, filed a corrected VAT return with the first-tier tax 
authority of the defendant for the tax period covering January 2016, in accordance 
with Article 195 of the az adózás rendjéről szóló 2017. évi CL. törvény (Law No 
CL of 2017 on general taxation procedures; ‘the Law on general taxation 
procedures’). By means of the corrected tax return, the applicant reduced the 
amount of VAT payable for that tax period by HUF 7 832 000, citing the 
payments it had made under both the funding volume agreements […] entered into 
with the NEAK, as State health insurance agency, and Articles 36(1) and 40/A(1) 
of the Law on the marketing of medicinal products. 
11 The first-tier tax authority rejected the applicant’s corrected tax return and refused 
the subsequent reduction in the taxable amount. As a result of the administrative 
action brought by the applicant before the defendant, the latter allowed the 
reduction in the taxable amount as regards the sums paid pursuant to the payment 
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obligation under the funding volume agreements, referring in that respect to the 
judgment of the Court of Justice of the European Union in Case C-717/19. 
12 However, the defendant refused the reduction in the taxable amount as regards the 
ex lege payment obligation. It stated that this is a statutory payment obligation 
which is not a price reduction but a special tax. In the defendant’s view, the law 
frames the payment obligation not as a price reduction but as a tax. That payment 
obligation stems not from the funding volume agreements but directly from 
statutory provisions. It is not a price reduction because it is not given by the 
distributor of pharmaceutical products to the final consumer and because the 
payments are primarily mechanisms to achieve budgetary and health objectives. 
Legal literature also regards those payments as special taxes. Ex lege payment 
obligations are governed by the az adóigazgatási rendtartásról szóló 2017. évi 
CLI. törvény (Law No CLI of 2017 on tax administration) […] and by the Law on 
general taxation procedures. The sums paid in that respect must be credited to the 
tax authority and, under Article 6(2)(a) of the Law on general taxation procedures, 
they are treated as taxes. According to the tax authority, that payment obligation is 
a tax on medicinal products, a levy payable under a mandatory statutory provision 
which cannot be regarded as a price reduction. 
II.1. Hungarian law 
Az adózás rendjéről szóló 2017. évi CL. törvény (Law No CL of 2017 on general 
taxation procedures) (new Law on general taxation procedures) 
Article 195 Where a taxpayer has filed a corrected return claiming only that the 
legal provision on which the liability to tax is based is unconstitutional or contrary 
to a legal act of the European Union that is of general application and directly 
applicable, or that a municipal decree is contrary to another legal provision, the 
tax authorities shall give a decision on the corrected return within 15 days of the 
filing date thereof, without carrying out any checks, provided that, at the time of 
filing the corrected return, the Constitutional Court, the Kúria [(Supreme Court, 
Hungary)] or the Court of Justice of the European Union has not yet given a ruling 
on that issue or the corrected return does not comply with the terms of the 
published ruling. 
Az általános forgalmi adóról szóló 2007. évi CXXVII. törvény (Law No CXXVII 
of 2007 on value added tax) 
Article 65 In respect of the supply of goods or services, the taxable amount, 
unless otherwise specified in the present law, shall consist of the consideration, 
expressed in money terms, obtained or to be obtained by the supplier from the 
purchaser of the goods, the recipient of the services or a third party, including any 
subsidies directly linked to the price of the supply of goods or services. 
NOVO NORDISK 
 
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Article 77 1. In respect of the supply of goods or services or the intra-
Community acquisition of goods, amendment or termination of the contract ― 
including cases where the contract is invalid or there is no contract ― shall be 
grounds for a subsequent reduction in the taxable amount corresponding to the 
amount of any payment on account or consideration that has been or is to be 
refunded in whole or in part. 
[…] 
4. If, after he or she has supplied the goods or services, the taxable person, in 
accordance with the conditions set out in his or her commercial policy, refunds a 
sum of money for promotional purposes to a person (irrespective of whether or 
not that person is a taxable person) who did not purchase the goods or services 
giving rise to the entitlement to the refund directly from that taxable person, the 
taxable person making the refund may subsequently reduce the taxable amount in 
respect of the supply of goods or services for which the refund is given 
(transaction giving entitlement to a reduction in the taxable amount), provided 
that: 
(a) the supply of goods or services that was made directly to the person entitled 
to the refund (transaction giving entitlement to a refund) is a taxable transaction 
carried out within national territory; and 
(b) the amount to be refunded is less than the sum arrived at by multiplying the 
number of the transactions giving entitlement to a refund by the lower unit price, 
including tax, of the goods or services supplied under the promotional campaign 
in question, with respect to all transactions giving entitlement to a reduction in the 
taxable amount. 
5. For the purposes of applying paragraph 4, the amount refunded shall be 
deemed to include the amount of the tax. 
A biztonságos és gazdaságos gyógyszer- és gyógyászatisegédeszköz-ellátás, 
valamint a gyógyszerforgalmazás általános szabályairól szóló 2006. évi XCVIII. 
törvény (Law No XCVIII of 2006 laying down general provisions on the reliable 
and economically viable supply of medicinal products and medical equipment 
and on the marketing of medicinal products) (Law on the marketing of 
medicinal products) 
Article 36 1. The holder of the marketing authorisation for a medicinal 
product or, where the holder does not carry on any distribution activities in 
Hungary, the distributor appointed by agreement concluded between them and 
approved by the State tax authority, and the person who has submitted an 
application for a social security subsidy for a preparation and, if that person does 
not distribute the preparation, the distributor (for the purposes of this Chapter, 
together, ‘the holder of the marketing authorisation for the medicinal product’), 
shall be subject, as regards medicinal products and preparations (for the purposes 
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of this Chapter, together, ‘medicinal products’) sold in pharmacies and benefitting 
from any kind of public funding, with the exception of the medicinal products 
referred to in Article 38(1) and the preparations referred to in the legislation on 
infant formula and follow-on formula, to the obligation to pay 20% of a part of the 
social security subsidy, based on the sales data according to medical prescriptions 
for the reference month, in proportion to the production price or the import price 
(together, ‘the production price’) (production price/consumer price). The holder of 
the marketing authorisation for the medicinal product shall be subject, as regards 
the preparations referred to in the legislation on infant formula and follow-on 
formula sold in pharmacies and benefitting from any kind of public funding, to the 
obligation to pay 10% of a part of the social security subsidy, based on the sales 
data according to medical prescriptions for the reference month, in proportion to 
the production price (production price/consumer price). The payment obligation 
shall be calculated for each product and for each type of subsidy. ‘Social security 
subsidy’ means the gross subsidy, including value added tax. ‘Consumer price’ 
means the gross consumer price. ‘Production price’ means the net production 
price, excluding value added tax. 
Article 37 1. The health insurance agency responsible for managing the 
National Health Insurance Fund shall forward to the person liable for payment or 
shall publish on its website, no later than the tenth day of the second calendar 
month following the reference month, the subsidy and sales data needed to 
discharge the payment obligations laid down in Article 36(1) and (2). 
2. In accordance with the payment obligations laid down in Article 36(1) and 
(2), the holder of the marketing authorisation for the medicinal product and the 
holder of the wholesale distribution authorisation for the medicinal product shall, 
no later than the twentieth day of the third calendar month following the reference 
month, file a return with the State tax authority using the form made available by 
that authority and, at the same time, shall make payment into the account opened 
for that specific purpose by the tax authority with the Treasury. 
Article 40 The State tax authority: 
(a) shall transfer the amount received pursuant to Article 36(1), (2), (4) and (4a) 
to the account of the National Health Insurance Fund opened with the Treasury, as 
indicated in special rules; 
(b) shall carry out that transfer immediately after payment is made. 
Article 40/A 1. In addition to the payment obligation laid down in 
Article 36(1), the holder of the marketing authorisation for a medicinal product or, 
where the holder does not carry on any distribution activities in Hungary, the 
distributor appointed by agreement concluded between them and approved by the 
State tax authority (for the purposes of this article, together, ‘the holder of the 
marketing authorisation for the medicinal product’), shall be subject, as regards 
medicinal products sold in pharmacies and benefitting from any kind of public 
NOVO NORDISK 
 
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funding for at least six years, the price of which, taken as the basis for that 
funding, exceeds HUF 1 000, to the obligation to pay 10% of a part of the social 
security subsidy, based on the sales data according to medical prescriptions for the 
reference month, in proportion to the production price or the import price 
(together, ‘the production price’) (production price/consumer price), provided that 
there is no other product which is also publicly funded and whose active 
pharmaceutical ingredient and route of administration are identical to those of the 
product in question, but which is sold under a different trade mark by a different 
marketing authorisation holder. The payment obligation shall be calculated for 
each product and for each type of subsidy. 
4. The payment obligation laid down in paragraph 1 shall be governed by the 
Law on tax administration and the Law on general taxation procedures, subject to 
the differences established in this law. 
5. The State tax authority shall inform the health insurance agency of the 
approval of the agreement between the holder of the marketing authorisation and 
the distributor, referred to in paragraph 1, within eight days of the date of 
approval. 
6. The health insurance agency responsible for managing the National Health 
Insurance Fund shall forward to the person liable for payment or shall publish on 
its website, no later than the tenth day of the second calendar month following the 
reference month, the subsidy and sales data needed to discharge the payment 
obligation laid down in paragraph 1. 
7. In accordance with the payment obligation laid down in paragraph 1, the 
holder of the marketing authorisation for the medicinal product shall, no later than 
the twentieth day of the third calendar month following the reference month, file a 
return with the State tax authority using the form made available by that authority 
and, at the same time, shall make payment into the account opened for that 
specific purpose by the tax authority with the Treasury. 
8. The health insurance agency responsible for managing the National Health 
Insurance Fund shall provide, at the same time as the data forwarding service 
referred to in paragraph 6, an electronic data forwarding service for the benefit of 
the State tax authority concerning the data needed to monitor the persons liable for 
payment. 
9. The State tax authority shall transfer the amount received pursuant to 
paragraph 1 to the account of the National Health Insurance Fund opened with the 
Treasury, as indicated in special rules, and shall carry out that transfer 
immediately after payment is made. 
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II.2. European Union law 
Council Directive 2006/112/EC on the common system of value added tax (‘the 
VAT Directive’) 
Article 73 
In respect of the supply of goods or services, other than as referred to in 
Articles 74 to 77, the taxable amount shall include everything which constitutes 
consideration obtained or to be obtained by the supplier, in return for the supply, 
from the customer or a third party, including subsidies directly linked to the price 
of the supply. 
Article 90 
1. In the case of cancellation, refusal or total or partial non-payment, or where 
the price is reduced after the supply takes place, the taxable amount shall be 
reduced accordingly under conditions which shall be determined by the Member 
States. 
2. In the case of total or partial non-payment, Member States may derogate 
from paragraph 1. 
Article 273 
Member States may impose other obligations which they deem necessary to 
ensure the correct collection of VAT and to prevent evasion, subject to the 
requirement of equal treatment as between domestic transactions and transactions 
carried out between Member States by taxable persons and provided that such 
obligations do not, in trade between Member States, give rise to formalities 
connected with the crossing of frontiers. 
The option under the first paragraph may not be relied upon in order to impose 
additional invoicing obligations over and above those laid down in Chapter 3. 
III. Grounds for the request for a preliminary ruling 
13 In its judgment of 20 December 2017 in Case C-462/16 (Boehringer Ingelheim 
Pharma), the Court held that Article 90(1) of the VAT Directive must be 
interpreted as meaning that the discount granted, under national law, by a 
pharmaceutical company to a private health insurance company results, for the 
purposes of that article, in a reduction of the taxable amount in favour of that 
pharmaceutical company, where it supplies medicinal products via wholesalers to 
pharmacies which make supplies to persons covered by private health insurance 
that reimburses the purchase price of the medicinal products to persons it insures. 
NOVO NORDISK 
 
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14 In its judgment in Case C-717/19 (Boehringer Ingelheim), the Court held that that 
provision precludes a national law that provides that a pharmaceutical company 
may not reduce its taxable amount for VAT by the portion of its revenue obtained 
from the sale of medicinal products subsidised by the State health insurance 
agency which it reimburses to that organisation under a contract entered into by 
the State health insurance agency and that company, because the amounts paid in 
that regard were not set out in advance by that company in its commercial policy 
and because those payments were not made for promotional purposes. 
15 Distributors of pharmaceutical products help fund the Hungarian medicinal 
product subsidy system in two ways. First, they make payments to the NEAK, as 
the State health insurance agency, under civil law contracts entered into by the 
parties voluntarily. The applicant is not obliged to conclude such contracts with 
the NEAK, but, if it does not do so for a given pharmaceutical product, that 
product will not receive public funding. The Court ruled on those payments in its 
judgment in Case C-717/19. 
16 Second, under Articles 36(1) and 40/A(1) of the Law on the marketing of 
medicinal products, distributors of pharmaceutical products are subject, as regards 
publicly funded medicinal products, to an additional payment obligation of 10% 
and 20% in proportion to the production price. That payment obligation is 
characterised by the fact that, although the State tax authority collects the 
payments and oversees discharge of the obligation, it immediately transfers the 
sums collected to the NEAK. It is also characterised by the fact that payments 
made to the NEAK under a funding volume agreement have an impact on the 
quantum of the ex lege payment obligation and, in addition, deductions from that 
payment obligation may be made in respect of other items. Discounts aside, the 
consequence of actually discharging the payment obligation is that the taxable 
person who distributes pharmaceutical products does not receive a portion of the 
consideration. The preamble to the bill which initially introduced the ex lege 
payment obligation stated that ‘it is usual commercial practice for a purchaser to 
obtain a discount based on the purchase volume. Since the largest purchaser of 
medicinal products is the social security system, the insurance agency must be the 
beneficiary of the reduction related to sales of the subsidised medicinal products, 
which must also be laid down by law’. 
17 The defendant contends that the ex lege payment obligation is not a price 
reduction because, first, it is not a reduction in the price which, based on the 
quantity of products previously purchased, is granted until discharge and, second, 
it is not granted to the final consumer, so that there is no direct link between the 
consideration for the sale made by the person liable for payment, the payment and 
the consideration paid by the final consumer. The ex lege payment obligation is 
binding and not reciprocal, is intended to meet budgetary projections for the 
medicinal product subsidy and has no effect on the subsidised price paid by the 
patient. The tax authority not only acts as collector of the tax, but also has 
oversight powers, and the applicant does not reimburse the NEAK, but discharges 
a payment obligation in favour of the Treasury. Chapter IV of the Law on the 
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marketing of medicinal products governs the payment obligation under the 
funding volume agreements, which is classified as a price reduction, whereas the 
ex lege payment obligation is governed by Chapter V of that law and cannot 
therefore be classified as a price reduction. The ex lege payment obligation is a 
tax, since it is possible to deduct from its base amount, first, pursuant to 
Article 38(4) of the Law on the marketing of medicinal products, payments made 
for the reference period under funding volume agreements, net of VAT, and, 
second, pursuant to Article 36(10) of that law, research and development 
investments, which would not be possible if the ex lege payment obligation was 
not a tax. In accordance with Article 78(a) of the VAT Directive, the taxable 
amount is to include taxes, and, since the payment obligation framed in mandatory 
terms in Articles 36(1) and 40/A(1) of the Law on the marketing of medicinal 
products is a special tax, it cannot be classified as a price reduction enabling the 
taxable amount to be reduced. 
18 The referring court considers that it is not possible to resolve the dispute between 
the parties on the basis of Hungarian law and the practice of the tax authority 
established by that law without looking at it in relation to EU law, the 
fundamental principles of the VAT Directive and the law to be applied by the 
national court, and without examining whether Hungarian law and the practice of 
the tax authority established by that law comply with the requirements stemming 
from the neutrality of VAT provided for by EU law, given that a pharmaceutical 
company which makes payments ex lege to the State health insurance agency 
based on the revenue obtained from publicly funded pharmaceutical products is 
not entitled subsequently to reduce the taxable amount, by reason of the fact that 
the payments are made ex lege, that payments made under a funding volume 
agreement and investments made by the company in research and development in 
the health sector may be deducted from the base amount for the payment 
obligation, and that the amount payable is collected by the State tax authority, 
which immediately transfers it to the State health insurance agency. 
19 The referring court is of the view that, in the present case, the NEAK should be 
regarded as the final consumer of the supplies of goods made by the applicant, 
since the fact that, in the main proceedings, the direct beneficiary of the supplies 
of the medicinal products in question is not the State health insurance agency 
which subsequently reimburses the amount of the subsidy to the pharmacy, but the 
insured persons themselves who pay the subsidised price to the pharmacy, does 
not break the direct link between the supply of goods made and the consideration 
received (judgment of 6 October 2021, Boehringer Ingelheim, C-717/19, 
paragraph 45), such that the amount payable to the tax authority may not exceed 
that paid by the final consumer (judgments of 24 October 1996, Elida Gibbs, 
C-317/94, paragraph 24, and of 6 October 2021, Boehringer Ingelheim, C-717/19, 
paragraph [46]). As regards the classification as a price reduction, all that matters 
is that the taxable person has not received all or part of the consideration for his or 
her goods (judgment of 6 October 2021, Boehringer Ingelheim, C-717/19, 
paragraph 51). 
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20 Under Article 90(1) of the VAT Directive, the taxable amount is to be reduced 
accordingly under conditions to be determined by the Member States. Given that, 
in the context of the factual background outlined above, there was no examination 
of a payment obligation established ex lege under which the sums due were 
payable to the tax authority but were ultimately transferred to the State health 
insurance agency, the Court has not had occasion to consider whether the ex lege 
payment obligation at issue in the present case, under which the tax authority 
collects the sums due and also oversees the filing of returns in respect of that 
obligation as well as payment, and which national legislation classifies as a tax on 
medicinal products with the sums due being transferred immediately by the tax 
authority to the NEAK, may be regarded as the grant of a discount proportionate 
to the payments made by the distributor of pharmaceutical products under a 
funding volume agreement. 
In those circumstances, the referring court seeks to ascertain whether the principle 
of fiscal neutrality is infringed by the fact that pharmaceutical companies are not 
entitled subsequently to reduce the taxable amount when having to discharge a 
payment obligation under which the direct recipient of the sums payable is the 
State tax authority but the indirect recipient of those sums is the NEAK, which 
ultimately bears the purchase price of the medicinal products, such that payment 
helps fund the medicinal product subsidy. 
IV. Other procedural issues 
[…] [Matters of national procedural law] 
Budapest, 30 March 2023. 
[…] [signatures]