B Law & Tax
25 July 2023

Tax advisor: Are the invoicing services provided by the pharmaceutical association to certain members of the association, who pay a fee, exempt from VAT?

The plaintiff professional association was subject to inspections that led to the imposition of VAT and IS assessments for the years 2014 to 2017 (VAT) and 2013 to 2017 (IS). The Administration considered that the invoicing services provided by the Official College of Pharmacists to the members of the college owning pharmacy offices should be subject to VAT and IS taxation. These services involved the intermediation between the members of the Association and the Health Administration in the withdrawal of prescriptions from Social Security affiliates, their digitalization into invoices and their presentation for collection and delivery to the members, who had to pay a variable fee of 0.3% of the invoicing.

The question of interest is whether the exemption regulated in article 20.1 12.º of the VAT Law applies to these services of invoicing to an administration, related to services or dispensations made by the pharmacy offices to beneficiaries of the Social Security. In addition, it must be analyzed whether these services, provided by the professional association to certain members, are exempt from VAT due to the possible consideration of “non-profit organizations” within the meaning of the VAT Directive.

The case law of the Court of Justice of the European Union (CJEU) has established that certain concepts, such as “non-profit making bodies”, are autonomous from EU law and must be interpreted according to the objectives pursued by the entity. In this case, it must be assessed whether the professional association is acting on a non-profit basis in providing the invoicing services and what are the purposes of these operations. There is no previous case law on the application of the exemption to similar services provided by professional associations in which particular interests of some members and not of all the members of the association are satisfied, and which are provided for in the articles of association.

B Law & Tax International Tax & Legal Advisors.


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