According to Article 291 of Law No. 227/2015 on the Fiscal Code, the delivery of pellets is subject to a differentiated VAT treatment, depending on the raw material used in their production and their final intended use.
- Wooden pellets – Reduced VAT rate of 11%
Pellets made from wood species (such as beech, oak, spruce) are classified under CN codes 4401 31 00 and 4401 32 00. For this category, a reduced VAT rate of 11% applies, pursuant to Article 291(2)(i) and (j) of the Fiscal Code, provided that:
- They are used exclusively as heating fuel;
- The buyer provides a self-declaration confirming this purpose;
- The rule applies to both individuals and legal entities, including schools, hospitals, and social institutions, as long as the pellets are used for heating.
In the absence of the required declaration confirming their heating use, the standard VAT rate of 21% applies.
- Agricultural biomass pellets – Standard VAT rate of 21%
Pellets obtained from straw, cereal residues, corn stalks, or other agricultural biomass materials do not qualify for the reduced 11% VAT rate. The Fiscal Code expressly limits the reduced rate to wooden pellets and related by-products.
Therefore, the sale of pellets made from straw or other non-woody biomass is subject to the standard VAT rate of 21%.
- Summary of applicable VAT treatment:
Type of Pellets | VAT Rate | Application Conditions |
Wooden pellets (beech, oak, spruce etc.) | 11% | Exclusive use as heating fuel, confirmed by buyer’s self-declaration |
Agricultural biomass pellets (straw, corn stalks, etc.) | 21% | Standard rate – not eligible for reduced VAT regime |
Conclusion:
The current fiscal policy encourages the use of wooden pellets as renewable energy sources through a reduced VAT rate, while maintaining the standard rate for agricultural biomass pellets. Correct VAT application depends strictly on the material composition and the declared purpose of use.