We remind you that, by Law 39/2023, starting from January 2023, the supply and installation of photovoltaic panels, solar thermal panels and other efficient heating systems are operations to which a reduced VAT rate applies, if they are intended for housing or public authority buildings.
Thus, the value added tax on photovoltaic panels and heat pumps for private consumers has been reduced to 5%. It should be noted that the tax relief is not available to companies using these installations.
However, as the law containing the measure was not detailed enough to be implemented correctly in practice, the parliamentarians came up with a new law with additional clarifications, which will apply from 14 July 2023.
Therefore, in the Official Gazette (Part I) no. 633 of 11 July 2023, Law 216/2023 was published to amend and supplement Law no. 227/2015 on the Tax Code, applicable from 14 July 2023.
According to the new regulations, the following changes occur:
– the list of equipment includes heat pumps, which until now were not expressly included in this facility (they were, in theory, covered by the original intention of the parliamentarians, but the language used did not cover them concretely);
– refers to the necessary components purchased separately, which was not specified until now (the idea of “complete solutions” is dropped, which was not defined anywhere in the legislation and made it very difficult to apply the measure);
– both the supply and/or installation of components for the repair and/or extension of the systems in question and the supply of those systems as part of the supply of construction (including the supply and installation of the systems as an extra option on the supply of a construction) are included in the 5% VAT list;
– special clarifications appear for certain terms – in particular, it is separately detailed what is meant by “high efficiency”, “installation kits”, “necessary components purchased separately” and “dwellings” (in the case of dwellings, it is explained that dwellings and condominiums are covered, regardless of whether they are owned by natural or legal persons);
- high efficiency – seasonal energy efficiency class for space heating minimum B, according to Annex II of the Delegated Regulation (EU) No. 811/2013 of 18 February 2013 supplementing Directive 2010/30/EU of the European Parliament and of the Council with regard to energy labelling of space heating installations, dual function heating installations, space heating installation packages, temperature controller and solar device and space heating installation packages with dual function, temperature controller and solar device;
- installation kits – the set of parts marketed together for the purpose of providing a functional system and which may contain:
a) photovoltaic panel kit – photovoltaic panel, inverter, control module, optimizers, fixing systems, wiring and connectors, electrical panel, circuit breakers, meter box, electric meter and, in case of off-grid systems, batteries;
b) solar thermal panel kit – solar thermal panel, mounting systems, control and automation systems, boiler, pumps, expansion tank, automatic aerator, solar antifreeze. It does not include pipework for connection to radiators or underfloor heating and does not include radiators;
c) heat pump kit – air-to-air, air-to-water or ground-to-water heat pump, fixing systems, control and automation system, boiler, pumps, expansion vessel, automatic aerator, tubing and connectors for connecting system components. Does not include pipework for connection to radiators or underfloor heating and does not include radiators;
d) kit for solid fuel heating systems – appliance for local heating with closed fire, fixing systems, puffer, boiler, expansion tank, pumps, control and automation systems, piping and connectors for connecting system components. Does not include pipework to connect to radiators or underfloor heating and does not include radiators;
- necessary components purchased separately – components referred to in item 2, letters a) to d) purchased in accordance with this law;
- residential dwellings – dwellings or condominiums, as defined in Article 2, letters a) and i) of the Housing Law no. 114/1996, republished in the Official Gazette of Romania, Part I, no. 393 of 31 December 1997, with subsequent amendments and additions, whether owned by a natural person or a legal person.
- the introduction of an affidavit allowing, in theory, the reduced VAT rate to be applied in a chain, if more than one firm is involved.
The new law also stipulates that the 5% VAT applies to the supply of sawdust, waste and scrap wood, which is used for heating purposes (whether or not agglomerated in the form of pellets/bricks and falling under CN codes 4401 31 00 and 4401 32 00, respectively 4401 41 00 and 4401 49 00).
The facility covers deliveries to natural persons, legal persons or other entities (including schools, hospitals, medical dispensaries and social welfare units).
Legal basis: Law 216/2023 amending and supplementing Law no. 227/2015 on the Tax Code.