Dutch Supreme Court rules that sunscreens and toothpastes may classify as medicines and benefit from reduced VAT

Frits Gerritzen

On 11 November 2016, the Dutch Supreme Court ruled that toothpaste and sunscreen may be regarded as medicines within the meaning of Article 1, paragraph 1 of the Dutch Act on Medicines (Geneesmiddelenwet). According to this Article, products are classified as a “medicine” either because of their therapeutic effect or on the basis of their presentation as such. This presentation criterion is met if the manufacturer presents or recommends the product as having therapeutic or prophylactic effects (generally in labels, information leaflets, or even through oral presentation) or if the product is perceived by the average consumer as having such effects because of the way the product is presented. The court ruled that when such therapeutic and prophylactic effects are mentioned on the packaging or is perceived as such by the average consumer because of the presentation, both sunscreen and toothpaste qualify as medicines and must benefit from the reduced VAT rate (of 6%). The court notes that the presentation criterion leading to a product qualifying as medicine must be interpreted broadly, which could open up possibilities for other products with healthcare purposes to classify as such and benefit from the reduced VAT rate.

A prior version of this post was originally published by the same authors in Practical Law – Life Sciences, November 2016 Issue (Thomson Reuters).

This post was originally co-authored by Elsie Troll.

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