In the Official Gazette (Part I) no. 722 of 04 August 2023 was published the Government Decision (HG) no. 653/2023 amending and supplementing Title VII “Value Added Tax” of the Methodological Norms for the implementation of Law no. 227/2015 on the Tax Code, approved by Government Decision no. 1/2016.
- Amendments relating to the application of Law 88/2023 (in force from 11.06.2023), which provides for VAT exemption (with right of deduction) for:
a) Construction or rehabilitation or modernization services of public hospitals or hospitals managed by non-profit entities, registered in the Register held by the tax authority;
b) Supply of medical equipment, appliances, devices and consumables to public hospitals or hospitals run by non-profit entities registered with the tax authorities;
c) Supply of prostheses and prosthesis accessories;
d) Supply of orthopaedic products.
– The provisions of the rules concerning the VAT rate of 9% for the supply of prostheses and accessories of prostheses and for the supply of orthopaedic products (letter c and letter d) are repealed, these operations becoming exempt.
– The justification of the tax exemption provided for in point a), for which the beneficiary is the hospital unit of the public state network or, as the case may be, the central or local public institution/authority, which ensures its financing, according to the law, is made with the documentation on the basis of which these services are provided, such as the contracts concluded with the beneficiary.
- The tax exemption provided for in point b) applies directly, through invoicing without VAT, to supplies of medical equipment, appliances, devices, articles, accessories and protective equipment, materials and consumables for healthcare use, as well as for the adaptation, repair, rental and leasing of such goods, made to hospital units in the public state network, on the basis of a declaration on their own responsibility by the legal representative of the hospital unit that the goods in question are normally intended for use in the field of health care or for use by disabled persons, essential goods for the compensation and overcoming of disabilities.
- In the case of supplies of medical equipment, appliances, devices, articles, accessories and protective equipment, materials and consumables for medical use, as well as for the adaptation, repair, rental and leasing of such goods, invoiced to a central or local public institution/authority, the tax exemption applies directly, by invoicing without VAT, on the basis of an affidavit from the legal representative of the central or local public institution/authority concerned stating that the goods/services purchased are intended for a hospital unit in the public state network for which it provides financing and the above declaration from the legal representative of the hospital unit in the public state network receiving the financing
– In the case of the importation of goods referred to in point b), the VAT exemption shall apply to transactions carried out directly by the hospital unit in the public state network or by the central or local public institution/authority providing its financing, on the basis of the declarations referred to above, as appropriate, which shall be submitted to the competent customs authority at the time of importation.
- In the case of intra-Community acquisition of goods referred to in point b), the VAT exemption applies to transactions carried out directly by the hospital unit in the public state network or by the central or local public institution/authority providing its financing, on the basis of the above-mentioned declarations, as appropriate, which are kept in the beneficiary’s records in order to justify the VAT exemption.
Important aspects:
According to the new provisions, the provisions relating to the declaration on own responsibility do not apply to the supply of prostheses and their accessories, with the exception of dental prostheses (exempt from tax without the right to deduct), nor to the supply of orthopaedic products, which are exempt regardless of to whom they are supplied.
A medical prosthesis is a medical device intended for exclusive personal use which enhances, restores or replaces areas of soft or hard tissue and functions of the human authority . This device can be internal, external or both internal and external. A prosthesis accessory is an item that is specifically designed by the manufacturer to be used in conjunction with the medical prosthesis.
Orthopaedic products are prostheses used for the augmentation, restoration or replacement of soft or hard tissues and functions of the osteoarticular system, orthoses used for the modification of the structural and functional characteristics of the neuromuscular and skeletal system, as well as orthopaedic footwear made on the recommendation of a medical specialist, orthopaedic walking aids and devices, such as wheelchairs and/or similar invalid vehicles, parts and/or accessories of wheelchairs or similar invalid vehicles.
In the case of imports of prostheses and orthopaedic products, the VAT exemption is applied by the customs authorities at the time of importation, regardless of the recipient of the import.
In the case of intra-Community acquisition of prostheses and orthopaedic products, the VAT exemption is applied by any person making the intra-Community acquisition of goods in Romania.
According to Article II of the GOVERNMENT DECISION 653/2023, the VAT exemption for supplies of goods and/or services referred to in point I, letter a-d, made to the hospital unit of the public state network or, as the case may be, to the central or local public institution/authority that provides its financing, according to the law, in the period between the date of entry into force of Law no. 88/2023 (11 JUNE 2023) and the date of entry into force of this decision (4 AUGUST 2023), shall apply if the suppliers/providers prove the destination of the goods/services by any evidence and means of proof provided for by law, including, but not limited to, contracts and affidavits provided for in GOVERNMENT DECISION 653/2023.
- Other amendments/completions to the Methodological Rules – HORECA sector:
- The reduced VAT rate of 9% applies to: beverages, edible vinegar and vinegar substitutes obtained from acetic acid, falling under NC codes 2201, 2202 and 2209 00, except those falling under NC codes 2202 10 00 and 2202 99.
- Redefinition of accommodation in the hotel sector or in sectors with similar functions, i.e. in the framework of intermediaries in such activities, for which the reduced VAT rate (9%) applies.
- In the case of restaurant services, alcoholic beverages, as well as non-alcoholic beverages falling under NC codes 2202 10 00 and 2202 99, served in a restaurant or offered in the case of catering services, are subject to the standard rate of VAT, without being considered as a separate supply of goods, the offering of beverages being part of the restaurant or catering services.
- For the application of the reduced rate of 5% to supplies of dwellings, the threshold value of 600,000 lei includes the value of the dwelling, including the value of the undivided shares of the common parts of the building and of the annexes and, where applicable, of the land on which the dwelling is built, but excludes certain easement rights connected with the dwelling.
Legal basis:
– Decision 653/2023 amending and supplementing Title VII ”Value Added Tax” of the Methodological Norms for the application of Law no. 227/2015 on the Tax Code, approved by Government Decision no.1/2016;
– Law 88/2023 amending and supplementing Law No 227/2015 on the Fiscal Code