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Tuesday, 28 April 2020

Is there a reduced VAT rate applicable for the supply of medical devices and PPE such as facemasks and hydroalcoholic gels?

Stijn Vastmans

Stijn Vastmans

Gert Vranckx

Gert Vranckx


:: Update 07/05/2020 ::

In the context of the COVID-19 crisis, there is a great need for medicines and medical devices, such as facemasks, respirators, etc. An important question here is which VAT rate applies to the purchase of these goods. The application of a reduced rate is of importance for hospitals and healthcare institutions, as these generally have no or only a limited right to deduct VAT.

In particular, the VAT legislation provides for a reduced VAT rate of 6% with respect to a number of medical products. It is important to note that this list is exhaustive and cannot be extended by way of analogical reasoning. There has been an extensive number of case studies on this.

The 6% VAT rate applies in particular to the following goods:

  • Medicines as referred to in the Act on medicines of 1964; 
  • Medical devices, such as cotton wool, gauze, bandages and similar articles (plasters, etc.) that additionally contain a medicine;
  • Other equipment and accessories of a medical nature, such as orthopaedic appliances, dentures, hearing devices, walking frames, wheelchairs and similar trolleys for disabled and sick people,…

This list should be interpreted in a restrictive manner. It should be checked on a case-by-case basis whether a particular product qualifies under this list. Products that do not (clearly) qualify under this list are subject to 21% VAT. This is particularly the case for the supply of disposable gloves, facemasks and hydroalcoholic gels.

However, in the context of the COVID-19 crisis, the Council of Ministers decided that the supply, the intra-Community acquisition and the import of the following protective equipment are temporarily subject to the reduced VAT rate of 6% :

  • Facemasks envisaged by codes NC 4818 90 10 00, 4818 90 90 00, 6307 90 98 10, 6307 90 98 91, 6307 90 98 99 and 9020 00 00 10; and
  • Hydroalcoholic gels.

This temporary extension of the reduced rate applies from the 4th of May 2020 up to and including the 31st of December 2020.

The application of this reduced rate applies irrespective of the capacity of the seller (wholesaler, pharmacies, retail trade, online trade) or the capacity of the buyer (medical staff, care institutions, private persons and any other natural or legal person).

Finally, as a result of Decision 2020/491 of the European Commission, a customs and VAT exemption is provided for the import of goods that are used in the fight against COVID-19 (such as facemasks and hydroalcoholic gels). This exemption only applies to importations made by government agencies or agencies that are recognized by the government.

If you have any questions on this subject, please contact the authors of this article.

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