The Ministry of Finance, General Administration of Customs, State Taxation Administration, and National Medical Products Administration have jointly released the third batch list of anti-tumor drugs and rare disease drugs eligible for a value-added tax (VAT) discount. Starting from December 1, 2022, a total of 46 anti-tumor drugs and 19 rare disease drugs will now enjoy a 3% VAT rate.
Policy Background
The favorable VAT policy was first implemented in April 2018 when the four bureaus released the first batch of 103 anti-tumor drugs eligible for a 3% VAT rate starting from May 1 of that year. General VAT taxpayers who produce, sell, wholesale, and retail anti-cancer drugs can choose to pay VAT at a rate of 3% using the simple method, which will remain unchanged for 36 months. In February 2019, 21 rare disease drugs and 4 rare disease active pharmaceutical ingredients (APIs) were added to the list. To date, a total of 187 anti-tumor drugs and 54 rare disease drugs have been included in the lists (including drugs that have been listed more than once).
Specific Drugs Included
Notably, melphalan, a cancer drug, and pirfenidone, a rare disease drug, were both included in the first list. The VAT discount policies for the first batch of anti-cancer drugs and the first batch of rare disease drugs took effect on May 1, 2018, and March 1, 2019, respectively. Bosentan, a rare disease drug on the second list effective from October 1, 2020, was also included in the first list previously.-Fineline Info & Tech
