In today’s increasingly complex legal landscape, the necessity for a multifaceted legal practice is paramount. One exemplary case of such a practice is our law firm that epitomizes the value of close cooperation between attorneys specialized in various industries and branches of law, e.g. medical law and tax law. This collaborative approach is particularly beneficial for clients in specialized fields, such as healthcare, where legal intricacies often intertwine with industry-specific regulations.
Consider a scenario involving a hospital or medical centre approached by a clinical trial company. The central issue at hand relates to whether the services provided under their agreement should be subject to value added tax (VAT) and if these services would generate income recognizable for VAT registration purposes. This situation exemplifies the complexities that can arise in the intersection of healthcare and tax law—an area where the expertise of multiple legal specialists can prove invaluable.
To navigate this issue effectively, it is crucial to understand the legal conditions surrounding VAT registration. Ilieva, Voutcheva & Co. attorneys specializing in healthcare work alongside their colleagues focused on tax law to provide a comprehensive analysis. The conclusion reached in this case indicates that there is no tax risk necessitating VAT registration if certain conditions are met:
Obtain Permission from the IAL: The hospital must first secure permission from the Institutional Authority for Laboratory (IAL) to conduct the clinical trials. This step is essential to ensure that the trials are being conducted legally and ethically.
Demonstrate Therapeutic Necessity: It must be proven that the trials serve the prevention, diagnosis, and treatment of diseases for which therapeutic options are limited or non-existent, thereby providing substantial therapeutic and public health benefits. Importantly, if there are other viable therapies available, even if less effective, the trials may not qualify for the tax exemption under the VAT Act. The responsibility of substantiating these claims falls on the principal investigator or researcher, who must gather adequate evidence to benefit from the VAT exemption on the service supplied.
Furthermore, it is critical to recognize that while clinical trials may involve medical services, the activities related to collecting, monitoring, processing, and analyzing data necessary for marketing authorization do not qualify as medical services under the exemption. This provision emphasizes the need for specialized knowledge in both healthcare regulations and tax laws, reinforcing the importance of a multifaceted legal team within Ilieva, Voutcheva & Co.
The collaborative approach employed by the firm exemplifies the added value that can be delivered to clients like hospitals and medical centers. By effectively intertwining expertise from various legal specializations—including healthcare, tax, and regulatory law—attorneys can address complex challenges more holistically. This not only leads to more accurate legal guidance but also ensures that clients can make informed decisions with an understanding of the risks and benefits involved.
