Judgment;Summary — ECLI:EU:C:2021:195
Date: 2021-03-11
Language of the case: German
Court formation: Seventh Chamber
Subject matter: Taxation;Value added tax
Procedure: Reference for a preliminary ruling
Origin: Germany

Summary of the request for a preliminary ruling pursuant to Article 98(1) of 
the Rules of Procedure of the Court of Justice 
Date lodged: 
31 October 2019 
Referring court: 
Bundesfinanzhof (Germany) 
Date of the decision to refer: 
6 June 2019 
Applicant and appellant in the appeal on a point of law: 
Company Z 
Defendant and respondent in the appeal on a point of law: 
Tax Office Y 
  
Subject matter of the main proceedings 
VAT — Directive 2006/112 — Discount granted by a pharmacy in the 
Netherlands to persons insured under a statutory health insurance scheme in 
Germany in the context of their supplies of medicinal products to German health 
insurance funds — Reduction in the taxable amount as a result of the discount 
Subject matter and legal basis of the reference 
Interpretation of EU law, Article 267 TFEU 
Questions referred 
1. Based on the judgment of the Court of Justice of the European Union of 
24 October 1996, Elida Gibbs Ltd., C-317/94 (EU:C:1996:400), is a 
pharmacy which supplies medicinal products to a statutory health insurance 
fund entitled to reduce the taxable amount as a result of a discount granted to 
the persons insured under a health insurance scheme? 
EN 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-802/19 
 
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2. In the event that this is answered in the affirmative: Is it contrary to the 
principles of neutrality and equal treatment in the internal market if a 
pharmacy in the national territory is able to reduce the taxable amount, but a 
pharmacy which supplies the statutory health insurance fund by means of an 
intra-Community, tax-exempt supply from another Member State is not able 
to do so? 
Provisions of EU law cited 
Council Directive 2006/112/EC of 28 November 2006 on the common system of 
value added tax, in particular Articles 2(1), 13(1), 20, 90 and 138 
Brief summary of the facts and procedure 
1 In the year at issue (2013), the applicant supplied, from the Netherlands, 
prescription-only medicinal products to Germany, to persons insured under the 
statutory health insurance scheme, on the one hand, and to persons insured under 
private health insurance schemes, on the other hand. In both cases, it made 
payments (‘discounts’), referred to as compensation for participation, in exchange 
for answers to questions about the respective illnesses. 
2 The applicant charged the statutory health insurance funds for the supplies to 
persons insured under a statutory health insurance scheme, and those supplies are 
the sole subject of the present dispute. The statutory health insurance funds paid 
on the basis of social security legislation. Since 1 October 2013, the applicant 
assumed, in relation to those supplies, that the place of supply was in the 
Netherlands, that it could benefit from tax exemption for intra-Community 
supplies there and that the statutory health insurance funds would be liable to pay 
tax on intra-Community acquisitions in the national territory. It also assumed that 
the discounts paid by it had reduced the taxable amount for VAT. 
3 The tax office did not share the applicant’s view and issued a tax assessment 
notice, against which the applicant filed an objection and brought an action, 
without success. The applicant challenges the dismissal of its action by way of its 
appeal on a point of law, in which it asserts, in particular, that it is entitled to a tax 
adjustment on account of a reduction in remuneration in accordance with the 
judgment of the Court of Justice of 24 October 1996, Elida Gibbs (C-317/94, 
EU:C:1996:400). 
COMPANY Z 
 
3 
Brief summary of the basis for the reference 
First question referred 
4 When answering the first question, it should be noted that the present case 
involves a chain of two supplies, only the first of which falls within the scope of 
the tax. 
5 The applicant provided the first supply to statutory health insurance funds. This 
constituted intra-Community supplies, which, by reason of the dispatch of goods 
from the Netherlands to Germany, were exempt from tax for the applicant 
pursuant to Article 138 of Directive 2006/112 and the implementing provision 
adopted in the Netherlands in that regard. It is true that, pursuant to Article 13(1) 
of Directive 2006/112, statutory health insurance funds are not to be regarded as 
taxable persons. Being legal persons under national law, however, the supplies 
were nevertheless exempt from tax in the Netherlands on the basis of Article 138 
of Directive 2006/112. In accordance with this, the statutory health insurance 
funds were obliged to pay tax on the acquisition as a legal person pursuant to 
Article 2(1)(b)(i) in conjunction with Article 20 of Directive 2006/112, whereby 
they did not have a right of deduction as they did not have the status of a taxable 
person. 
6 The supply by the applicant to the statutory health insurance funds was followed 
by a second supply by the statutory health insurance funds to the persons insured 
with them under a health insurance scheme. The legal relationship on which this 
supply is based arises from German social security law. This is because, by 
supplying medicinal products prescribed by a doctor, the statutory health 
insurance funds discharge their obligation, vis-à-vis insured persons, to provide 
healthcare. 
7 This second supply does not fall within the scope of the tax under Article 2(1)(a) 
of Directive 2006/112. Firstly, it was carried out free of charge, since the persons 
insured under statutory health insurance schemes did not pay consideration for the 
individual supplies of medicinal products. The compulsory health insurance 
contributions paid by them and their employers constitute consideration for the 
insurance relationship as such, but not consideration for the services provided 
under it. Secondly, the supplies by statutory health insurance funds were not 
supplies by taxable persons pursuant to Article 13 of Directive 2006/112. 
8 The fact that the applicant dispatched the goods directly to the insured persons 
does not preclude the existence of two supplies (applicant to statutory health 
insurance fund, and statutory health insurance fund to persons insured under a 
health insurance scheme), as already ruled by the Court of Justice on several 
occasions (see, for example, judgment of 6 April 2006, EMAG Handel Eder, 
C-245/04, EU:C:2006:232). 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-802/19 
 
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9 The present dispute concerns the question whether, as a result of the discount that 
it granted to the purchaser of the second supply, the applicant is able to claim a 
reduction in the taxable amount for the first supply to the statutory health 
insurance funds. It is common ground that such a discount does, in principle, lead 
to a reduction in the taxable amount. However, clarification is required as to 
whether this is also the case if the second supply does not fall within the scope of 
the tax. For the purpose of answering that question, it is not necessary to draw a 
distinction as to whether the pharmacy carries out the supply from abroad — as in 
the present case — or from within the national territory. 
10 A requirement for the reduction could be that all transactions in the chain in 
question fall within the scope of the tax. This could be supported by the fact that 
the Court of Justice justified a reduction in the taxable amount in the case of a 
discount granted to the purchaser of a subsequent supply by stating that the basic 
principle of neutrality requires that within each country similar goods should bear 
the same tax burden whatever the length of the production and distribution chain 
(Elida Gibbs judgment, EU:C:1996:400, paragraph 20, and judgment of 
20 December 2017, Boehringer Ingelheim Pharma, EU:C:2017:1006, 
paragraph 33). The referring court takes the view that the length of that production 
and distribution chain is determined by the transactions that fall within the scope 
of the tax pursuant to Article 2(1) of Directive 2006/112. 
11 In its judgment in Boehringer Ingelheim Pharma (EU:C:2017:1006), concerning 
the granting of discounts to private health insurance companies, the Court of 
Justice assumed that a chain of transactions falling within the scope of the tax 
existed where pharmacies made the last supply in the chain of transactions and 
thus ‘make supplies [of medicinal products] to persons covered by private health 
insurance’, for which remuneration was paid. The discount reduced the expenses 
of the private health insurance companies and thus the expenses of the person who 
had to bear the costs of the taxable acquisition of the medicinal products. This is 
not the situation in the present case: the granting of discounts to persons insured 
under a statutory health insurance scheme has no effect whatsoever on the 
expenses to be paid by the statutory health insurance funds. 
Second question referred 
12 The second question referred, which arises only if the first question is answered in 
the affirmative, could be answered in the negative for the simple reason that, in its 
judgment of 19 October 2016, Deutsche Parkinson Vereinigung (C-148/15, 
EU:C:2016:776), the Court of Justice removed the prohibition on discounts for the 
supply of medicinal products only in respect of pharmacies located abroad, 
meaning that it continues to apply unchanged to pharmacies within the national 
territory. Already with regard to the prohibition on the granting of discounts for 
pharmacies within the national territory, it may not be necessary to ask the 
question regarding unequal treatment between pharmacies located abroad and 
those within the national territory in terms of the VAT consequences of the 
granting of such discounts. 
COMPANY Z 
 
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13 If the Court of Justice were to regard this as immaterial, it would be necessary to 
consider the meaning of Article 90 of Directive 2006/112. 
14 Two reasons militate against a reduction in the taxable amount pursuant to 
Article 90 of Directive 2006/112 in favour of the applicant. Firstly, it has not 
made any taxable transactions within the national territory in relation to the 
supplies for which a tax reduction could be considered. As the supplies made to 
the statutory health insurance funds were dispatched from the Netherlands, there is 
no taxable transaction in Germany for which the taxable amount could be reduced 
there. Secondly, the transactions conducted in the Netherlands in relation to the 
statutory health insurance funds are exempt from tax there as intra-Community 
supplies. 
15 The second question referred could nevertheless be answered in the affirmative, 
since, according to the concept on which Directive 2006/112 is based, the 
Netherlands and Germany belong to an internal market under VAT law. On that 
basis, a supply from the Netherlands to Germany should not actually be treated 
any differently from a supply within the national territory. 
16 However, in the year at issue, the process of building the internal market between 
the Member States of the European Union was still incomplete, as national 
taxation sovereignty still existed (and continues to exist). Therefore, supplies from 
one Member State to another Member State between taxable persons — or, as in 
the present case, by taxable persons to legal persons — are subject to the special 
arrangements which result in tax exemption as an intra-Community supply in the 
Member State of dispatch (here: the Netherlands) pursuant to Article 138 of 
Directive 2006/112 and in tax liability as an intra-Community acquisition pursuant 
to Article 2(1)(b) in conjunction with Article 20 of Directive 2006/112 in the 
Member State of destination (here: Germany). 
17 Taken together, these two elements constitute an intra-Community transaction 
which transfers the taxation from the Member State of dispatch to the Member 
State of destination. In this regard, the Court of Justice has already held that the 
intra-Community supply of goods and their intra-Community acquisition are ‘one 
and the same financial transaction’ (judgment of 27 September 2007, Teleos, 
C-409/04, EU:C:2007:548, paragraphs 23 and 24) and are thus part of an ‘intra-
Community transaction’ (Teleos judgment, EU:C:2007:548, paragraphs 37 and 
41), the purpose of which is to ‘transfer … the tax revenue to the Member State in 
which final consumption of the goods supplied takes place’ (Teleos judgment, 
EU:C:2007:548, paragraph 36, and judgments of 27 September 2009, Collee, 
C-146/05, EU:C:2007:549, paragraph 22, of 27 September 2007, Twoh 
International, C-184/05, EU:C:2007:550, paragraph 22, of 22 April 2010, X and 
fiscale eenheid Facet-Facet Trading, C-536/08 and C-539/08, EU:C:2010:217, 
paragraph 30, and of 7 December 2010, R., C-285/09, EU:C:2010:742, 
paragraph 37). 
SUMMARY OF THE REQUEST FOR A PRELIMINARY RULING — CASE C-802/19 
 
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18 In the light of the aforementioned rules on the internal market, the question arises 
as to whether, even though the applicant did not carry out any taxable transactions 
in Germany in respect of the supplies at issue in the present case, it should 
nevertheless not be treated as if such a transaction existed. Having regard to the 
dispatch of the supplied goods to Germany, the tax-exempt intra-Community 
supply in the Netherlands would then have to be treated as a transaction that is 
taxable in Germany. 
19 Equal treatment of transactions within the internal market and domestic 
transactions would militate in favour of this. In a true internal market, the supplies 
carried out by the applicant would have to be treated as domestic supplies, with 
the result that there would have to be a tax adjustment as a result of the reduction 
in remuneration. It would then be irrelevant that the tax for the supply by the 
applicant is not to be borne by the latter, but by the statutory health insurance 
funds within the framework of tax on acquisitions. 
20 It is not possible to obtain any clarification in this regard from the judgment of 
15 October 2002, Commission v Germany (C-427/98, EU:C:2002:581, 
paragraphs 64 and 65), since, according to the understanding of the referring 
court, it did not rule on the possibility of a reduction in remuneration in the 
Member State of destination (here: Germany).