62023CC0248
OPINION OF ADVOCATE GENERAL
ĆAPETA
delivered on 6 June 2024 (
1
)
Case C‑248/23
Novo Nordisk AS
v
Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága
(Request for a preliminary ruling from the Fővárosi Törvényszék (Budapest High Court, Hungary))
(Reference for a preliminary ruling – Taxation – Value added tax (VAT) – Directive 2006/112/EC – Article 90(1) – Reduction of the taxable amount – National tax legislation excluding from the benefit of the reduction of the taxable amount contributions paid by a pharmaceutical undertaking to the public sickness insurance body pursuant to a statutory obligation – Price reduction)
I. Introduction
1.
‘Oh, save me, save me, save me from this squeeze’. (
2
)
2.
Indeed, this case is about taxes, more precisely, about the value added tax (VAT). It is pending before the Fővárosi Törvényszék (Budapest High Court, Hungary), which asked the Court to interpret Article 90(1) of the VAT Directive, (
3
) which allows for the reduction of the taxable amount if the price is reduced after the supply takes place.
3.
The dispute arose between Novo Nordisk AS (‘Novo Nordisk’), a pharmaceutical company that supplies medical products to the Hungarian market and the Nemzeti Adó- és Vámhivatal Fellebbviteli Igazgatósága (Appeals Directorate of the National Tax and Customs Administration, Hungary; ‘the Appeals Directorate’), which refused Novo Nordisk’s request for a subsequent reduction of the amount of VAT paid for the supply of subsidised medicinal products.
4.
The Court is required to interpret whether certain payments imposed by Hungarian law and calculated on the basis of the price of subsidised medicinal products should be treated as a price reduction or as a tax. If it is a price reduction, the taxable amount should be reduced on the basis of Article 90(1) of the VAT Directive. If that payment is to be characterised as a tax, however, Novo Nordisk is not entitled to a reduction of the taxable amount for VAT purposes.
II. The background to the dispute in the main proceedings, the question referred and the procedure before the Court
5.
In Hungary, the retail sale of medicinal products is carried out through pharmacies. Pharmacies are supplied by wholesale distributors and those distributors are, in turn, supplied by distributors of pharmaceutical products.
6.
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 that are sold on prescription and funded by the social security system in the context of outpatient care. The price of the subsidised medicinal product is then shared between the NEAK and the patient. The patient pays the pharmacy an amount –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 to the pharmacy the amount of the subsidy paid. The price of the medicinal products received by the pharmacy, which is the taxable amount for VAT purposes, 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.
7.
Novo Nordisk, the applicant in the main proceedings, is a company registered in Denmark that manufactures and markets medicinal products in Hungary.
8.
Novo Nordisk, together with Novo Nordisk Hungária Kft., belongs to a group of companies that, in its own name and on behalf of Novo Nordisk, entered into agreements with the NEAK on the portfolio of subsidised products and on price volume (‘the price volume agreements’). In accordance with these agreements, Novo Nordisk undertook the obligation to pay to the NEAK a sum which depends on the volume of sales of medicinal products subsidised by the social security system (‘the payment obligation under the price volume agreements’) and, to that end, used a portion of the revenue obtained from the sale of those medicinal products.
9.
In addition to the price volume agreements, pursuant to Paragraph 36(1) and Paragraph 40/A(1) of 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; ‘the Law on the marketing of medicinal products’), Novo Nordisk is obliged to make additional payments of 20% and 10% ‘of a part of the social security subsidy’ for medicinal products benefiting from any kind of public funding sold by it through pharmacies (‘the ex lege payment obligation’).
10.
In the order for reference, the referring court explains that in discharging the ex lege payment obligation after the sale of the products, Novo Nordisk 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 that is to be paid on that ground thus depend on the quantity of subsidised medicinal products sold and the amount of the social security subsidy. More precisely, according to Paragraph 36(1) of the Law on the marketing of medicinal products, the amount to be paid concerning the ex lege payment obligation is ‘based on the sales data according to medical prescriptions for the reference month, in proportion to the production price’.
11.
On 16 July 2021, Novo Nordisk filed a corrected tax return with the first-tier tax authority of the Appeals Directorate for the tax period covering January 2016, in accordance with Paragraph 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’). In its corrected tax return, Novo Nordisk reduced the amount of VAT payable for the tax period by 7832000 forint (HUF) (approximately 20_353.47 euros), citing the payments it had made under both the price volume agreements entered into with the NEAK and the payments it made under Paragraph 36(1) and Paragraph 40/A(1) of the Law on the marketing of medicinal products.
12.
The first-tier tax authority rejected Novo Nordisk’s corrected tax return and refused the reduction in the taxable amount. Following Novo Nordisk’s complaint, in which the judgment in Boehringer Hungary (
4
) was invoked, the Appeals Directorate allowed the reduction in the taxable amount as regards the sums paid pursuant to the payment obligation under the price volume agreements.
13.
However, the Appeals Directorate refused the reduction in the taxable amount regarding the ex lege payment obligation. It stated that the statutory payment obligation is not a price reduction, but a special tax. In its view, the ex lege payment obligation stems not from the price volume agreements, but directly from statutory provisions. It is, therefore, 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. As mentioned above, ex lege payment obligations are governed by the Law on general taxation procedures; the sums paid in that respect must be credited to the tax authority and, under Paragraph 6(2)(a) of that law, are treated as taxes. The defendant in the main proceedings therefore maintains that the ex lege payment obligation is a tax payable under a mandatory statutory provision which cannot be regarded as a price reduction.
14.
In those circumstances, the Fővárosi Törvényszék (Budapest High Court) decided to stay the proceedings and refer the following question to the Court of Justice for a preliminary ruling:
‘Must Article 90(1) of [the VAT Directive] 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 pharmaceutical products is not entitled subsequently to reduce the taxable amount, by reasons 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?’
15.
Written observations were submitted to the Court by Novo Nordisk, the Hungarian Government and the European Commission.
16.
A hearing was held on 19 March 2024 at which Novo Nordisk, the Hungarian Government and the Commission presented oral argument.
III. Legal framework
European Union law
17.
Article 90(1) of the VAT Directive reads:
‘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.’
Hungarian law
18.
Paragraph 36(1) of the Law on the marketing of medicinal products reads:
‘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 of this Chapter, together, “medicinal products”) sold in pharmacies and benefiting from any kind of public funding, with the exception of the medicinal products referred to in Paragraph 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 benefiting 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.’
19.
According to Paragraph 40 of that law, the State tax authority:
‘(a) shall transfer the amount received pursuant to Paragraph 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.’
20.
Paragraph 40/A of that law provides:
‘1.   In addition to the payment obligation laid down in Paragraph 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 Paragraph, together, “the holder of the marketing authorisation for the medicinal product”), shall be subject, as regards medicinal products sold in pharmacies and benefiting from any kind of public funding for at least six years, the price of which, taken as the basis for that funding, exceeds HUF 1000, 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 subparagraph 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 subparagraph 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 subparagraph 1.
7.   In accordance with the payment obligation laid down in subparagraph 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 subparagraph 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 subparagraph 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.’
IV. Analysis
21.
The present case requires an interpretation of the VAT Directive which will enable the referring court to decide whether the ex lege payment required by national law is a price reduction allowing the reduction of the taxable amount.
22.
If a taxable person, for whatever reason, reduces the price of a good or service it supplies, such a reduction is deductible from the taxable amount on the basis of which the VAT is calculated. Price reductions can be offered at the moment of supply, in which case Article 79 of the VAT Directive is applicable. However, prices can also be reduced after the supply takes place. In that case, Article 90(1) of the VAT Directive provides for the reduction of the taxable amount. The applicability of that provision is at issue in the present case.
23.
Those provisions are an expression of a fundamental principle of the VAT Directive, according to which the taxable amount is the consideration actually received, and the corollary of which is that the tax authorities may not collect an amount of VAT exceeding the tax which the taxable person received. (
5
)
24.
Under the Law on the marketing of medicinal products, Novo Nordisk was obliged to pay the NEAK an amount that was directly connected to the quantity and price of the products supplied, the payment and the performance of which occurred after the supply of those products.
25.
Is such a payment a price reduction, in which case the taxable amount should be reduced for the amount of that payment on the basis of Article 90(1) of the VAT Directive, or is such a payment a discharge of the obligation to pay a special tax, in which case it does not affect the taxable amount?
26.
To my mind, there are different elements in the present case which can favour both conclusions. The existing case-law, particularly the judgments in Boehringer Germany (
6
) and in Boehringer Hungary, provide some elements, but cannot provide a final answer for the present case.
27.
I will proceed as follows. First, I will explain why the ex lege payment at issue may be considered a price reduction (A). Second, I will explain why, even though the payment at issue possesses most of the elements of a special tax, it may not be considered as such in the present case (B). I will therefore propose to the Court to find, in the present case, that the ex lege payment at issue should be considered as a price reduction (C).
A.
The ex lege payment at issue as a price reduction
28.
It follows from Boehringer Germany that a price reduction need not be voluntary, but can result from an obligation grounded in legislation, in order to be characterised as a price reduction in the sense of Article 90(1) of the VAT Directive. (
7
)
29.
Boehringer Germany concerned the discount on the price of medicinal products that a pharmaceutical company was required to grant, on the basis of law, to a private health insurance company which reimbursed the patient. The main reason why the Court found that discount to be a price reduction within the meaning of Article 90(1) of the VAT Directive was that, as a result of the German legislation at issue, a pharmaceutical company could only dispose of a sum corresponding to the price of the sale of those products to pharmacies, reduced by that discount. (
8
)
30.
The fact that the insured person, and not the insurance company, was a direct beneficiary of the supply did not break the direct link between the supply of services made and the consideration received. In fact, according to the Court, the private health insurance company at issue was to be regarded as being the final consumer of a supply made by a pharmaceutical company and, therefore, the amount payable to the tax authority could not exceed that paid by the insurance company as the final consumer. (
9
) The consideration that the company actually received and which represented the taxable amount was therefore reduced by the discount imposed by law. (
10
)
31.
In the present case, as described by the referring court, under the ex lege payment obligation, Novo Nordisk 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.
32.
Even if the NEAK is not a direct beneficiary of the supply of the medicinal product, it may nevertheless be characterised as a final consumer in the same sense as the insurance company was a final consumer in Boehringer Germany. The NEAK, namely, pays part of the price of the supplied medical products.
33.
Given that the amount owed by Novo Nordisk under the Hungarian law to the NEAK is calculated on the basis of the price of the supplied prescription medicinal products, and that the reimbursement is made to the same institution which is also a final consumer, such reimbursement represents the price reduction of the supplied medicinal products granted after the supply took place within the meaning of Article 90(1) of the VAT Directive.
34.
Consequently, an ex lege payment obligation such as the one in the main proceedings, may constitute a price reduction so that, for the purpose of VAT, the ‘taxable amount’ of that company may be reduced as a result of the price reduction resulting from such ex lege payment.
B.
The ex lege payment at issue as a tax
35.
If, however, the ex lege payment at issue is not a reimbursement of the part of the price paid by the NEAK as a final consumer, but rather a payment to the NEAK, as a public health insurance fund, of a special tax imposed by law, Article 90(1) of the VAT Directive would not apply. In such a scenario, there would be no reason for the reduction of the taxable amount, as payment of that tax would not decrease the amount of consideration received by Novo Nordisk for its supplies of the subsidised medicinal products.
36.
In Boehringer Germany, the discount which had to be granted by the pharmaceutical company was for the benefit of the private insurance company that had no public role. It was therefore clear in Boehringer Germany that the ex lege payment in that case directly reduced the consideration received for the products supplied.
37.
On the contrary, the NEAK, according to the Hungarian Government, is an institution of public power with responsibilities not only for the subsidising of medicinal products, but also with other responsibilities in the organisation of public health. In the present case, therefore, the payment which is subsequent to the moment when the supply takes place might also be considered as contributing to the portion of the State budget for which the NEAK is responsible, and which may be used not only for alleviating the patients’ burden when buying medicinal products, but can also be used for other public purposes of organising the public health system. For that reason, to my mind, the findings in Boehringer Germany cannot automatically be applied in the present case.
38.
In Boehringer Hungary, the Court had the opportunity to decide about the payments made by a pharmaceutical company to the NEAK that were also calculated on the basis of the price and volume of the supplied subsidised medicinal products. The Court considered such payments a price reduction. Nevertheless, the payments in that case were based on the contractual relationship between the NEAK and a pharmaceutical company and not on law, so that they could not be treated as taxes. It was also clear that those payments were agreed upon precisely for the purpose to reduce the price of medicinal products to be paid by the NEAK. For that reason, the Court’s findings in that case that Article 90(1) of the VAT Directive was applicable cannot be automatically applied to the present case, in which the payment is based on law and goes towards the general State budget, from which it is automatically transmitted/transferred to a portion of that budget managed by the NEAK.
39.
The question that therefore arises is whether the ex lege payment obligation at issue could be understood as a tax.
40.
The Hungarian Government considers that the ex lege payments in question are special taxes which do not have the character of turnover taxes within the meaning of Article 401 of the VAT Directive (1), and that such special taxes do not reduce the taxable amount (2). (
11
)
1. A tax within the meaning of Article 401 of the VAT Directive
41.
Article 401 of the VAT Directive provides that ‘without prejudice to other provisions of [EU] law, this Directive shall not prevent a Member State from maintaining or introducing … any taxes, duties or charges which cannot be characterised as turnover taxes, provided that the collecting of those taxes, duties or charges does not give rise, in trade between Member States, to formalities connected with the crossing of frontiers.’
42.
Thus, Article 401 of the VAT Directive does not preclude the maintenance or introduction of a tax, provided that it does not display one of the essential characteristics of VAT.
43.
It is apparent from the case-law that there are four such characteristics: VAT applies generally to transactions relating to goods or services; it is proportional to the price charged by the taxable person in return for the goods and services which he or she has supplied; it is charged at each stage of the production and distribution process, including that of retail sale, irrespective of the number of transactions which have previously taken place; the amounts paid during the preceding stages of the process are deducted from the VAT payable by a taxable person, with the result that the tax applies, at any given stage, only to the value added at that stage and the final burden of the tax rests ultimately on the consumer. (
12
)
44.
Even if the payment at issue is calculated on the basis of the company’s turnover, there is no doubt that the sums due under the legislation at issue in the main proceedings are not collected at each stage of the production and distribution process, but are paid only once by the pharmaceutical companies to the NEAK via the tax authorities.
45.
Therefore, an ex lege payment obligation such as that in the main proceedings indeed does not fall within the concept of a tax having the character of turnover taxes within the meaning of Article 401 of the VAT Directive.
46.
The ex lege payment obligation introduced by Hungarian law is therefore not a tax which the VAT Directive prohibits Member States from introducing. However, that still does not answer whether that ex lege payment obligation can be qualified as a tax.
2. The ex lege payment obligation as a tax remaining in the taxable amount
47.
According to settled case-law, the nature of a tax, duty or charge must be determined by the Court, under EU law, according to the objective characteristics by which it is levied, irrespective of its classification under national law. (
13
)
48.
According to Article 78(1)(a) of the VAT Directive, the taxable amount for VAT includes taxes. The Court has explained that to fall within the scope of that provision, the chargeable event for the likely tax at issue needs to coincide with that for VAT and has to qualify as a tax, those criteria being cumulative. (
14
)
49.
In the present case, the first criterion has been met: it is undisputed that the delivery of the medicinal products is the chargeable event for the ex lege payment and for the VAT.
50.
However, as the Commission has pointed out, the case-law relating to Article 78 of the VAT Directive does not provide guidance on what qualifies an ex lege payment as a tax. The Commission proposes that the following should be taken into consideration (
15
): whether the payment is compulsory and results from the law, (
16
) whether it has a predetermined tax base and tax rate, the identification of the beneficiary of the payment, as well as what was the intention of the national legislator and the objectives of the tax itself.
51.
In the present case, it is clear that the payment at issue is based in law and that it is compulsory. However, even if that characteristic allows that the payment at issue is characterised as a tax, as I explained in point 28 of this Opinion, it does not prevent it from being characterised as a price reduction. In other words, not every payment based in law is a tax, but to be a tax, a payment has to be based in law and compulsory.
52.
The ex lege payment obligation also has a predetermined tax base and rate. It could thus be characterised as a tax. However, that base is also linked to the price of supplied medicinal products, so that the characterisation of that payment as a price reduction cannot be excluded either.
53.
The identification of the beneficiary of the payment was proposed as another criterion relevant for determining whether a payment is a tax. In that respect, the payment at issue is made to the central budget, which is an element in favour of seeing it as a tax. However, it is also undisputed that it is immediately and automatically transferred to the part of the budget managed by the NEAK. That, in itself, should not deprive it of a fiscal nature. However, it can also be an indication that it is a payment which reduces the price payable by the NEAK as a final consumer of medicinal products.
54.
The enumerated characteristics of the ex lege payment at issue allow for its characterisation as a tax, but are not conclusive, as they also can lead to the conclusion that that payment is a price reduction.
55.
The Hungarian Government offered two additional arguments in favour of the characterisation of the ex
lege payment at issue as a tax. First, it referred to the Court’s case-law in which it considered that for the purposes of a payment to be considered a ‘tax’, it is important not only to establish that there is an obligation to pay an amount, but also that, in the event of non-compliance with that obligation, the person liable for payment is prosecuted by the competent State authorities. (
17
) In that regard, at the hearing, the Hungarian Government indicated that pharmaceutical producers which would fail to fulfil their ex lege obligation to pay could be prosecuted like any other taxable person. (
18
)
56.
Second, the Hungarian Government explained that the research and development expenditure may be used to reduce the basis of assessment of the amount payable as ex lege payment at issue. The taxpayer would be entitled to claim this reduction, without the administration enjoying any discretion in this respect, and any taxable person could benefit from it under identical conditions. Such a reduction of the taxable base would not be possible, according to the referring court, if the ex lege payment at issue were not a tax.
57.
Even if those two arguments speak in favour of qualifying the payment at issue as a tax, they are not sufficient. The payment obligation at issue fails, to my mind, to fulfil the last (but not least) feature a tax must possess.
58.
The last characteristic proposed by the Commission for a payment to be characterised as a tax is that of the intention of the State. If a State intended to collect taxes, a payment obligation could be understood to be a tax.
59.
However, it is often difficult to ascertain the intention of the legislature. The Hungarian Government indeed claimed before the Court that their intention was to introduce a tax. To my mind that is not sufficient, because it is also necessary that such legislative intention is understood by the taxable persons.
60.
I am therefore of the opinion that a more appropriate criterion would be the foreseeability by a taxable person of the intention of a legislature that an ex lege payment is imposed as a tax. (
19
)
61.
In that respect, and subject to verification by the referring court, it seems that the Hungarian legislation has not clearly revealed the possibly intended fiscal nature of the ex lege payment at issue.
62.
To the contrary, as noticed by the Commission, the relevant provisions of Hungarian law do not mention the fiscal nature of the payment at issue. They do not call the payment at issue a tax, but rather refer to it as ‘an obligation to pay’.
63.
Furthermore, as Novo Nordisk and the Commission point out, the explanatory memorandum to the legal provisions relevant to the present case seem to characterise the ex lege payment as a discount, rather than a tax. According to the Commission, that explanatory memorandum provides that ‘social security is the largest purchaser of medicines, so the beneficiary of the rebate on sales of subsidised medicines must be the insurer’.
64.
Questioned on this point at the oral hearing, the Hungarian Government admitted that the use of those terms was unfortunate.
65.
In that regard, it should be recalled that the principle of legal certainty, which is one of the general principles of EU law, requires that rules of law be clear, precise and predictable in their effects, especially where they may have negative consequences for individuals and undertakings, so that persons may ascertain unequivocally what their rights and obligations are and may take steps accordingly. (
20
)
66.
As Advocate General Sharpton argued, it is indeed crucial that a tax should be defined in legally binding rules accessible to taxable persons in advance in a manner that is sufficiently clear, precise and exhaustive so as to allow the taxable person in question to foresee and determine the amount of tax due at a given point in time on the basis of the texts and data available or accessible to him or her. (
21
)
67.
The ex lege payment obligation at issue in the present case does not fulfil those requirements of clarity and foreseeability, which means that a taxable person could not have known in advance that the payment at issue is owed as a tax and not as price reduction.
C.
Proposal
68.
In my view, the Hungarian law at issue is not such as to make a clear, precise and foreseeable rule which enables Novo Nordisk as a taxable person to understand that the ex lege payment obligation is a tax and could not be treated as a price reduction. At the same time, the requirements set by the case-law for that payment to be characterised as a price reduction are fulfilled.
69.
I therefore propose that the Court conclude that in the circumstances of the present case, the ex lege payment obligation does not fulfil all the legal requirements of the concept of a tax, and is to be qualified as an ex lege price reduction, within the meaning of Article 90(1) of the VAT Directive.
70.
That, however, does not prevent a Member State to enact, in a more explicit manner, a fiscal measure which would fulfil a similar objective of financing the public health policy.
V. Conclusion
71.
In light of the foregoing, I propose that the Court of Justice answer the question referred by the Fővárosi Törvényszék (Budapest High Court, Hungary) as follows
Article 90(1) of Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax must be interpreted
as precluding a national legislation, under which a pharmaceutical undertaking which, by law, is obliged to pay to a State health insurance body a proportion of its turnover deriving from its sales of pharmaceutical products financed by public funds, is not entitled to an ex post reduction in the taxable amount in respect of those payments if the national legislation at issue does not state in a clear, precise and foreseeable manner that the payment at issue is owed as a tax.
(
1
)	Original language: English.
(
2
)	The Kinks, Sunny Afternoon, 1966, Pye Records.
(
3
)	Council Directive 2006/112/EC of 28 November 2006 on the common system of value added tax (OJ 2006 L 347, p. 1), as amended by Council Directive 2009/162/EU of 22 December 2009 (OJ 2010 L 10, p. 14) (‘the VAT Directive’).
(
4
)	Judgment of 6 October 2021, Boehringer Ingelheim (C‑717/19, EU:C:2021:818, ‘Boehringer Hungary’).
(
5
)	See cases quoted in the Opinion of Advocate General Kokott in E. (VAT – Reduction of the taxable amount) (C‑335/19, EU:C:2020:424, point 30).
(
6
)	Judgment of 20 December 2017, Boehringer Ingelheim Pharma (C‑462/16, EU:C:2017:1006, ‘Boehringer Germany’).
(
7
)	See, to that effect, Boehringer Germany, paragraphs 42, 43 and 46.
(
8
)	Boehringer Germany, paragraph 35.
(
9
)	Boehringer Germany, paragraphs 40 and 41.
(
10
)	Boehringer Germany, paragraph 36.
(
11
)	In its written submissions, that government relied on Article 78(1)(a) of the VAT Directive. At the hearing, it more generally contended that the ex lege payment amounts to a tax without necessarily qualifying as such within the meaning of said provision.
(
12
)	See, to that effect, judgments of 8 June 1999, Pelzl and Others (C‑338/97, C‑344/97 and C‑390/97, EU:C:1999:285, paragraphs 20 and 21 and the case-law cited); of 3 October 2006, Banca popolare di Cremona (C‑475/03, EU:C:2006:629, paragraph 21 and the case-law cited); and of 25 February 2021, Novo Banco (C‑712/19, EU:C:2021:137, paragraph 48 and the case-law cited).
(
13
)	See, to that effect, judgments of 13 February 1996, Bautiaa and Société française maritime (C‑197/94 and C‑252/94, EU:C:1996:47, paragraph 39 and the case-law cited); of 12 December 2006, Test Claimants in the FII Group Litigation (C‑446/04, EU:C:2006:774, paragraph 107 and the case-law cited); and of 3 March 2021, Promociones Oliva Park (C‑220/19, EU:C:2021:163, paragraph 45 and the case-law cited).
(
14
)	See, to that effect, judgment of 20 May 2010, Commission v Poland (C‑228/09, EU:C:2010:295, paragraph 30 and the case-law cited).
(
15
)	The Commission relied on the judgment of 21 December 2011, Air Transport Association of America and Others (C‑366/10, EU:C:2011:864, paragraphs 143 to 147). On the appropriateness of those criteria, see Opinion of Advocate General Campos Sánchez-Bordona in IRCCS – Fondazione Santa Lucia (C‑189/15, EU:C:2016:287, footnote 35).
(
16
)	There are claims that the compulsory dimension is a central if not the most crucial characteristic of a tax: Suchy, G., ‘Some propositions on tax as a legal concept’, in Peeters, B., The Concept of Tax, EATLP, 2005, pp. 49 to 54, p. 49. There are also proposals that taxes may be conceptualised as compulsory contributions paid to the government to finance public expenditure. Barassi, M., ‘The notion of tax and the different types of taxes’, in Peeters, B., The Concept of Tax, EATLP, 2005, pp. 59 to 72, p. 72.
(
17
)	Judgment of 18 January 2017, IRCCS – Fondazione Santa Lucia (C‑189/15, EU:C:2017:17, paragraph 32 and the case-law cited).
(
18
)	That seems to corroborate that government’s written submissions, which referred to Paragraph 36(5) and Paragraph 40/A(4) of the Law on the marketing of medicinal products, which explicitly refer to Az adózás rendjéről szóló 2003. évi XCII. Törvény (Law XCII of 2003 on general taxation).
(
19
)	See, in that respect, judgment of the European Court of Human Rights of 9 November 1999, Špaček, s.r.o. v the Czech Republic (CE:ECHR:1999:1109JUD002644995, § 54 and the case-law cited). See also, Directorate-General for Research and Documentation of the Court of Justice of the European Union, Research Note, ‘Scope of the principle of the legality of taxation, particularly in relation to value added tax’ (September 2018), available at: https://curia.europa.eu/jcms/upload/docs/application/pdf/2020-11/ndr-2018-005_neutralisee_synthese_en.pdf.
(
20
)	Judgment of 16 February 2023, DGRFP Cluj (C‑519/21, EU:C:2023:106, paragraph 105 and the case-law cited).
(
21
)	Opinion of Advocate General Sharpston in Związek Gmin Zagłębia Miedziowego (C‑566/17, EU:C:2018:995, point 114).