We remind you that in the Official Gazette (Part I) no.716 of 15 July 2022 was published the Government Ordinance (OG) no.16/2022 for amending and supplementing the Law no.227/2015 on the Fiscal Code, repealing some normative acts and other financial-fiscal measures.
Thus, we present you the main news on VAT, in force from 1 January 2023:
VAT rate 9% – changes:
- From 01.01.2023, alcoholic beverages and non-alcoholic beverages (containing added sugar) falling under NC codes 2202 10 00 and 2202 99 are excluded from the 9% VAT rate.
Non-alcoholic beverages falling within NC codes 2202 10 00 and 2202 99:
- 22021000 – Waters, including mineral waters and aerated waters, containing sugar or
other sweetening matter or flavoured;
- 22029911 – Soya beverages with a protein content of 2,8 % or more by weight;
- 22029915 – Soya drinks containing less than 2,8 % protein by weight; drinks based on
nuts of Chapter 08, cereals of Chapter 10 or seeds of Chapter 12;
- 22029919 – Other,;
- 22029991 – Less than 0,2 % by weight;
- 22029995 – Of 0,2 % or more but less than 2 %;
- 22029999 – Of 2 % or more by weight;
Non-alcoholic beverages containing added sugar or other sweetening matter or flavour (Article 291(2)(e) of the Fiscal Code).
The reduced rate of 9% is applied to the tax base for the following supplies of services and/or goods:
“(e) the supply of the following goods: foodstuffs, including beverages, with the exception of alcoholic beverages, intended for human and animal consumption, live animals and poultry of domestic species, seeds, plants and ingredients used in the preparation of foodstuffs, products used to supplement or replace foodstuffs. The methodological rules shall determine the NC codes for these goods;”
Important!
The VAT rate of 5% remains unchanged for individuals who have concluded legal acts between living persons concerning the advance payment for the purchase of housing with a reduced VAT rate of 5%, prior to 1 January 2023 (Article III of OUG 16/2022).
In Article 291, after paragraph (32) three new paragraphs are inserted, paragraphs (33) – (35), with the following content:
“(33) The provisions of paragraph (2)(l) shall apply until 31 December 2031 inclusive.
(35) The “Register of acquisitions of dwellings with a reduced VAT rate of 5%, starting on 1 January 2023” shall be organised in electronic format, based on the information contained in the legal acts between living persons concerning the transfer of ownership of the dwellings referred to in paragraph (3)(c)(3), authenticated as from 1 January 2023. The procedure for the organization of the “Register of the purchases of dwellings with a reduced VAT rate of 5%, starting from 1 January 2023″ shall be established by order of the President of the National Agency for Tax Administration, in consultation with the National Union of Public Notaries of Romania. Public notaries have the obligation:
a) to verify the fulfilment of the condition concerning the purchase of a single dwelling whose value does not exceed the amount of 600. 000 lei, excluding VAT, at the reduced VAT rate of 5%, by consulting the “Register of purchases of dwellings at the reduced VAT rate of 5%, starting from 1 January 2023”, before authenticating legal acts between living persons concerning the transfer of ownership or advance payment for the purchase of such a dwelling and, if it finds that this condition is not met, to authenticate them only if the supply is made at the standard VAT rate;
b) to complete the “Register of purchases of dwellings with a reduced VAT rate of 5%, starting from 1 January 2023” on the date of authentication of legal acts between living persons concerning the transfer of ownership of the dwellings referred to in paragraph 3(c)(3);
c) to include in legal acts between living persons relating to the transfer of ownership or the advance payment for the purchase of a dwelling referred to in paragraph 3(c)(3) particulars of compliance with the obligations referred to in point (a) and, where applicable, point (b);
d) to include in legal acts between living persons relating to the transfer of ownership or payment on account of housing referred to in paragraph 3(c)(3) the VAT rate applied, whether VAT is applied to the price or included in the price.”
– Also from the same date, a 9% VAT rate will be applied (instead of 5%) for accommodation in the hotel, restaurant and catering sector.
– Chemical fertilizers and chemical pesticides of the type normally used in agriculture will also be taxed at a rate of 9%, to be regulated by joint MF/MADR order (the provision is valid until 31 December 2031).
VAT rate 5% – changes:
The 5% rate applies to the supply of dwellings with a useful surface of maximum 120 sqm, excluding household annexes, whose value, including the land on which they are built, does not exceed 600.000 lei, excluding value added tax, purchased by individuals individually or jointly with another individual/other individuals. The useful surface of the dwelling is the one defined by the Law no.114/1996, republished, with subsequent amendments and additions.
We mention that household annexes are those defined by Law no.50/1991, republished, with subsequent amendments and additions. The reduced rate applies only in the case of dwellings which at the time of delivery can be inhabited as such. Any natural person may purchase, starting from 1 January 2023, individually or jointly with another natural person/other natural persons, a single dwelling whose value does not exceed 600,000 lei, excluding VAT, at the reduced rate of 5%;
Clarification:
Until 31.12.2022, the number of dwellings with a value of less than 450.000 lei, which can be purchased by an individual with a 5% VAT rate is unlimited, the limit to one dwelling being imposed only for the purchase with a 5% VAT rate of dwellings with a value between 450.000 lei and 700.000 lei.
By derogation from the above provisions, in 2023, the reduced VAT rate of 5% shall also apply to:
a) the supply of dwellings with a useful surface area not exceeding 120 square meters, excluding household annexes, whose value, including the land on which they are built, does not exceed the amount of 450,000 lei, excluding value added tax, purchased by individuals, if they have concluded by 1 January 2023 legal acts between living persons concerning the advance payment for the purchase of such dwellings;
b) the supply of dwellings having a useful surface of not more than 120 sq.m, excluding household annexes, whose value, including the land on which they are built, exceeds the amount of 600,000 lei, but does not exceed the amount of 700,000 lei, excluding value added tax, purchased by natural persons individually or jointly with another natural person/other natural persons, if they have concluded before 1 January 2023 legal acts between living persons having as object advance payment for the purchase of such a dwelling.
c) The VAT rate of 5% for firewood in the form of logs, billets, twigs, branches or similar forms falling within NC codes 4401 11 00 and 4401 12 00 supplied to natural and legal persons will apply until 31 December 2029.
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in MO no. 688 of 10.09.2015), with subsequent amendments and additions;
– OG 16/2022 for the amendment and completion of Law no. 227/2015 regarding the Fiscal Code, the repeal of some normative acts and other financial-fiscal measures;
– Methodological norms for the application of the Fiscal Code (approved by HG no. 1/2016).