According to a draft Order of the Ministry of Finance (MoF), recently published in the Decision-Making Transparency, amendments and additions are proposed to the OMF no. 3044/2024, on the procedure for VAT refunds related to the purchase of goods or services by non-profit entities and wholly-owned companies. These amendments aim at aligning with the VAT exemptions provided for by the Tax Code, pursuant to Article 294 para. (5), lett. a) – b¹).
VAT exemption for non-profit entities
By Law No 88/2023, Article 294 of the Tax Code was amended, introducing VAT exemption with the right of deduction for certain supplies of goods and services to:
Non-profit entities registered in the Public Register organized by ANAF, if the purchases are intended for their own hospital units or in the state public network.
Subsequently, by OUG no. 31/2024, this VAT exemption was also extended to purchases made by companies wholly owned by non-profit entities, provided that the destination of the purchases is the same.
VAT refund procedure
The procedure applicable to these entities and companies was approved by OMF no. 3044/2024. However, subsequent amendments were introduced by:
Law No. 204/2024, which introduced:
New conditions for the application of VAT exemption for companies owned by non-profit entities.
Possibility of VAT refunds also for transactions for which VAT became chargeable before the law entered into force.
Conditions of eligibility for tax refund.
Law no. 313/2024, which extended the beneficiaries of the VAT refund procedure to non-profit entities registered in the Public Register organized by ANAF, for transactions carried out before the entry into force of Law no. 204/2024. In addition, the eligibility conditions have been adjusted.
Impact of the amendments
These amendments ensure equitable tax treatment between non-profit entities and the companies owned by them, eliminating differences in VAT refunds. In addition, the new regulations facilitate VAT recovery for past operations, providing clarity on eligibility conditions and extending tax benefits.
It is essential that the entities concerned constantly monitor the regulations and ensure that they meet all the legal conditions to qualify for VAT refunds under the new provisions.