Netherlands | Narrowing scope of 6% VAT rate on medicine

The Dutch Tax Authorities are  looking to narrow the scope of medicines which are subject to the 6% reduced VAT rate.

The qualification as “medicine” in respect of the VAT treatment to apply depends on whether a product is presented to consumers as “medicine”.

In this context, products like toothpastes that contain sodium fluoride as well as sunscreens with UVA and UVB filters have previously been ruled by the Dutch Supreme Court to be “medicine” for the purpose of the 6% reduced VAT rate.  As a result, it is likely the Dutch VAT rules will be redrawn to limit the scope of products which can apply the reduced rate of VAT.