VAT for Donated Innovative Drug Needed No More
2015/2/8 E药经理人

     On February 5, China's Ministry of Finance (MOF) and State Administration of Taxation (SAT) jointly released the notice on the VAT (Value-added tax) policies for the subsequent free use of innovative new drugs. According to the new policy, the drug manufacturers need not to pay VAT for the donated innovative drugs.

     The notice regulates that the donated drugs are exempted to pay the VAT if meet the following requirements: 1) provided by the manufacturers, 2) the aim is to get the all sales and other payments, 3) the drugs are innovative new drugs, 4) the drugs are used for subsequent therapy.

     The notice also clarified the definition of the innovative new drugs, which are approved by the CFDA (China Food and Drug Administration) , have not been on sale in China and other countries before the CFDA approval, and whose API (Active Pharmaceutical Ingredient) and formulations are made by synthesis or semi-synthesis.

     Furthermore, the notice made it clear about which documents that the manufacturers must keep for the inspection.

     China government wishes to encourage the research, development and use of the innovative new drug through this tax reduction policy.

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