VAT and The Clinical Trial Enterprise

By April Mulroney, CPA, CA, VP of strategic account management and tax services, CFS Clinical (CFS)

As clinical trials become more global, sponsors and CROs face a myriad of financial, contracting, and compliance challenges. One of the most pressing: understanding and managing the impact of Value Added Tax (VAT).

For trials based solely in the United States, VAT is a nonissue. But when a trial extends into any of the 150 countries that assess VAT, sponsors and CROs must be prepared to navigate the complexities — and manage the costs. This article captures key insights shared by a recent panel of experts from CFS Clinical, EY, and a leading specialty pharmaceutical company.

VAT: The Basics
VAT is a transactional tax (also known as consumption tax or indirect tax) that applies to all transactions — products and services alike. In the clinical trial realm, VAT could therefore apply when a local investigator provides trial-related services.