Ministry discussing VAT-free vaccines with Brussels
The government in a statement said that it was currently under discussions with the European Commission to define the list of medicines that would be exempted from Value Added Tax (VAT) under the terms of the extension of the derogation on food and medicines agreed a few weeks ago.
The government is charging a reduced 5% VAT rate on medical vaccines like those against meningitis and cervical cancer, despite an exemption on VAT on medicines granted to Malta before EU accession.
Both vaccines are not provided for free by the national health service.
Malta had requested the Commission to exempt vaccines from VAT in the pre-accession negotiations, while those selling them would be refunded the VAT incurred in their importation. But the request was not accepted.
The European Commission had confirmed that “in view of the fact that the government managed to negotiate the right not to impose VAT on food and medicine, Malta “has the right, even in the case of vaccinations, not to apply any VAT, to apply a reduced VAT rate and even to apply the normal VAT rate, that is, 18%,” the Finance Ministry said in response to a statement by Labour leader Joseph Muscat that Malta would still be applying a full VAT rate to vaccines despite the derogation negotiated on food and medicine.
Moreover, Cyprus did not have the right to apply a zero VAT rate on food and medicine indefinitely as Malta obtained last month, the Finance Ministry concluded.
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