Tax Alert 6/2025: Medical Devices Remain Eligible for Preferential Treatment – Extension of the 8% VAT Rate with No End Date

Please be informed that, as of 1 April 2025, the Act of 24 January 2025 amending the Value Added Tax Act, the Excise Duty Act, and certain other laws came into effect. The amendment introduces significant changes to the VAT treatment of medical device supplies. These new regulations are particularly important for businesses in the healthcare sector, especially manufacturers, distributors, and healthcare providers.

Legal framework prior to the amendment

Under the previous regulations, the supply of medical devices placed on the market pursuant to the repealed Act of 20 May 2010 on Medical Devices (replaced by the Act of 7 April 2022) was subject to the reduced VAT rate of 8%; however, only temporarily, i.e. until 27 May 2025.

After that, supplies of the such devices were to be subject to VAT at the standard rate, in accordance with the original wording of Article 120 of the Regulation (EU) 2017/745 and Article 110 of the Regulation (EU) 2017/746, which provided for a time limitation on the placing of these devices on the market and putting them into service.

Amendments introduced by Regulation (EU) 2023/607

On 20 March 2023, Regulation (EU) 2023/607 of the European Parliament and of the Council came into effect, amending Regulations (EU) 2017/745 and 2017/746 regarding the rules for making medical devices available on the market and putting into service those already placed on the market under previous legislation.

As a result of these changes, the time limit for placing medical devices on the market under the previous regulatory framework has been removed. Such devices may remain on the market until they no longer meet the applicable medical device requirements, for example due to physical wear or damage.

In light of these changes, the amendment to the VAT Act no longer sets a specific end date for when supplies of these devices can benefit from the reduced 8% VAT rate.

In practice, this means that supplies of the medical devices in question will continue to be subject to the 8% VAT rate, regardless of the date on which they were placed on the market, until they are physically worn out or lose their status as medical devices.

At the same time, please note that the preferential VAT treatment of medical devices is directly linked to EU law, namely Article 120(4) of Regulation (EU) 2017/745 and Article 110(4) of Regulation (EU) 2017/746. Accordingly, before applying the reduced VAT rate, it is now necessary to verify in each case whether a product qualifies as a medical device and falls within the scope of the regulations granting eligibility for preferential treatment. In case of doubt, it may be advisable to apply to the Head of the National Revenue Information (KIS) for a Binding Rate Information (WIS) regarding the applicable VAT rate.