Fiscal priorities for medical devices and equipment will be maintained. The delay in regulation has created a risk that from 2022 all medical products – from the simplest thermometers to fans – will start charging 20% VAT and, as a result, the price will rise. On November 18, the State Duma approved in its third reading a bill that would remove this legal gap.
Under the current law, the right to confirm the VAT exemption of manufacturers with a certificate of registration of a Russian medical product will expire in 2021. Changes to the Tax Code will remove this restriction. “Tax priorities remain”, – assured the representative of the Ministry of Finance.
The Ministry of Health feared an increase in the cost of purchasing medical equipment, an increase in the financial burden on the entire healthcare system and, as a result, the failure of the Health Project. He warned that if the law does not change immediately, from January 1, 2022, medical products will be subject to a 20% VAT.
VAT is included in the price of goods and the risk is crucial for industry players, says a representative of the Bioform science center: “Companies also use medical devices from other manufacturers in their production, with a 10% VAT and a 20% VAT difference.”
“The will of the legislature is aimed at preserving the benefits at all costs,” said Vladimir Zaitsev, head of Russia’s Siemens tax service. “But the speed of making changes is very low,” says Taxadvisor partner Dmitry Kostalgin. – As a result, the business suffers, which did not understand how to plan transactions for 2022 and what to do with the contracts already made. Some companies were already preparing for price issues. “
There are VAT exemptions for medical devices and equipment. Government-listed goods are exempt from VAT. The rest are paid at a reduced rate of 10% instead of 20%. To reaffirm your right to benefit, you must give your confirmation to the tax authorities – a certificate of registration issued in accordance with Russian regulations or Eurasian Economic Union (EEA) regulations, said Anton Grebenchuk, Director of Tax and Legal Advice. Russia and CIS KPMG.
In the process of integrating the countries into the Basque Country, it was decided to unify the approach and change it to a common format of registration certificates to facilitate administration. Initially, local certificates from different countries were expected to be replaced by Eurasian standard documents. But by the end of 2021 they didn’t have time to present them, Zaitsev explained. The problem is purely technical in nature.
114 working days
Registration is subject to EEA regulations. During this time, a study is carried out to confirm the safety and quality of the goods.
According to the current wording of the law, from 2022, companies with a Russian registration certificate will technically not be able to apply the VAT exemption or 10% rate on government-listed medical devices and equipment. If the certificate is received in accordance with Basque regulations, there are no restrictions, Grebenchu explained.
In order to solve the problem once and for all, it is necessary to make changes at the level of the BAC. A representative of the government’s press service told Vedomosti that the Eurasian Economic Commission (EEA) is preparing to sign the Protocol to the Amendments to the Uniform Principles and Rules for the Circulation of Medical Devices. The EVE plans to extend the sale of medical devices with a national certificate of registration until the end of its validity, but until 31 December 2026.
The industry is worried about whether they will be able to make changes at the UAE level by the end of the year, said Vitaly Razuvaev, director of legal issues at the League of Participants in the Circulation of Medical Devices.
The protocol is expected to be signed in the first fortnight of December, the EEA representative assured. In this case, the validity of the certificates previously issued will only be valid. He will stop issuing new certificates in accordance with national regulations, he stressed.
Re-registration may be delayed
From 2022 onwards, all new medical devices that were not previously registered in the territory of the Member States of the Basque Country will only have to be registered in accordance with the new uniform rules of the Union. It takes 114 working days to register in accordance with EEA regulations. During this time, a study is carried out to confirm the safety and quality of the goods. Companies should also clarify information on the issues of expert organizations.
During the four years of registration, according to the regulations of the BAC, only seven medical products were certified, which is inferred from the public register. Four of them are Russians, two are Belarusians and one is from the United States. About 80 applications are being processed, 11 of which have been completed, the EEA representative said.
In Russia, according to state regulations, more than 31,000 certificates have been issued. Several medical devices (up to hundreds) can be registered in one document, which is much higher than the actual number of medical devices registered under national regulations, said Sergey Vanin, executive director of IMEDA – the International Association of Medical Manufacturers. Equipment.
It’s harder to register under the new rules, especially when it comes to tertiary medical devices – a high-risk class – said a representative of the Bioform Scientific Center: and money ”.
“If companies have a massive demand for new certifications, technical problems cannot be ruled out; regulators may not be able to cope with the heavy workload,” KPMG’s Grebenchuk said.
IMEDA’s Vanin predicts that serious problems with the release of new types of medical products, especially high-tech ones, into the common market of the Basque Country: “This could also have a negative impact on the availability of modern high-tech medical products. especially in the aftermath of a pandemic. ” To register in accordance with the rules of the BAC, the experience of the five countries must be confirmed. None of the certificates issued under Union rules have been extended to five countries, he said.
Until the end of 2021, manufacturers have the right to register goods in accordance with the national regulations of their countries. “Now the vast majority of manufacturers are trying to seize that opportunity. In the fourth quarter of 2021, the number of applications for registration under the national rules increased, “said the EEA representative.