Russian Ministry of Industry and Trade takes steps to reduce drug prices

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The Ministry of Industry and Trade of Russia prepared a draft law that would allow the manufacturers of medicinal products and medical devices to minimize their payments of value added tax for imports and sales of medical products in the Russian Federation and, thereby, reduce the final price of these products for consumers.

The decree was elaborated to bring the codes of medical products, that are subject to value added tax at a tax rate of 10 percent at their sale, in accordance with the codes established by All-Russian Classification of Products by Economic Activity (OKPD 2) OK 034-2014 (KPES 2008), and applies to legal relations arising from January 1, 2017, except for the new types of medical devices and medicines.

Therefore, the adopted amendments are aimed at preserving the value added tax at a tax rate of 10 percent at the sale of medical products, as provided by the Decree of the Government of the Russian Federation No. 688 of September 15, 2008.

The list of codes of medical products under the Foreign Economic Activity Commodity Nomenclature of the Eurasian Economic Union (FEACN of EAEU), that are subject to value added tax at a tax rate of 10 percent at their import to the Russian Federation, was also substantially expanded (by 65 items). For the new codes of medical products under FEACN of EAEU, the decree applies to legal relations arising from the day of its official publication.