New VAT exemptions: Law no. 88/2023

The takeaway 

Law no. 88/2023 changed and amended the Fiscal Code by providing for new exemptions from value added tax (VAT) in the medical field. The provisions will enter into force within 60 days as of the date of publication of the law in the Official Gazette.

In detail

The following activities will be exempt from VAT with the right of deduction:

• construction, rehabilitation and modernisation services for hospital units in the state public network, as well as construction, rehabilitation and modernisation services for hospital units provided to non-profit entities if they are intended for hospital units owned and operated by the non-profit entity or those in the state public network;

• supplies of medical equipment, apparatus, devices, articles, accessories and protective equipment, materials and consumables for medical purposes normally intended for use in the healthcare field or by disabled persons, essential goods for assisting with and overcoming disabilities, as well as the adaptation, repair, rental and leasing of such goods, to hospital units in the state public network and to non-profit entities if they are intended for hospital units owned and operated by the non-profit entity or those in the public network state.

The VAT exemption for the above supplies of goods and services applies as follows:

• directly, by invoicing without VAT by goods/service providers if the beneficiary is a hospital unit in the state public network or a central or local public institution/authority which finances that network, according to the law;

• by refunding the VAT related to the purchases of goods or services made by non-profit entities, according to a procedure established by order of the Minister of Public Finance.

The following supplies of goods to which the reduced VAT rate of 9% was previously applied will also be exempt from VAT with the right of deduction:

• the delivery of prostheses and their accessories, apart from dental prostheses exempt from tax according to art. 292 para. (1) lit. b) from the Fiscal Code;

• delivery of orthopedic products.

The order of the Minister of Finance and the methodological rules regarding the application of exemptions will be issued within 60 days as of the publication of Law no. 88/2023 in the Official Gazette.

Source: [Law no. 88/2023 for the amendment and completion of the Fiscal Code, published in the Official Gazette no. 310 dated 12 April 2023]