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The order for the formation of VED prices was clarified to wholesale and retail organizations on general tax system


The Russian Federal Antimonopoly Service (FAS Russia) clarified the order for the vital and essential drugs’ (VED) prices assessment for VAT payers in its letter No. АК/46404/17 dated 07.07.2017 “On consideration of application letter”.

Statutory rules of VED selling do not consider that the medical drugs’ sellers apply different tax systems: general and simplified.

As a result, the wholesale organizations on general tax system charge VAT directly on retail price (over wholesale bidding), which influences on the final drugs price.

FAS Russia points in the mentioned letter that wholesale and retail organizations on general tax system have to form the VED retail price by summing up:

  • VED cost price without VAT;
  • bidding, calculated from VED cost price without VAT;
  • VAT, calculated from VED cost price without VAT and bidding.

In addition, FAS Russia reminded that calculated bidding must not be bigger than the maximum sum, adapted by the Russian executive regional authority for this price group.

FAS Russia expressed its position concerning VED prices bidding and its dependence on tax system applicable by an organization from the distribution chain on the FAS Russia website: “On clarifying of the calculation methodology of the order for the formation of VED retail price” dated 20.10.20151 and “On the order for the formation of VED retail prices by organizations on STS or UTII payers” dated 09.11.20152.

We would like to remind that FAS Russia clarifications are not statutory regulations and should be treated as recommendations of antitrust authorities. Nevertheless, we recommend following them during commercial activity, including VED prices assessment. However, in the courtroom, judges are not obliged to follow FAS Russia recommendations as good and sufficient ground for passing judgment.

_____

1http://fas.gov.ru/documents/documentdetails.html?id=1179
2http://fas.gov.ru/documents/documentdetails.html?id=1184



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