Reduced rate of 5% VAT for heat pumps and deliveries of wood in various forms: Law no. 216/2023

The takeaway

Law no. 216/2023 introduced a series of changes regarding the application of reduced VAT rates in the wood industry and the energy industry.

In detail

1.Reduced VAT rates in the wood industry

Law no. 216/2023 extended the application of the reduced VAT rate of 5% for the delivery of sawdust, waste and agglomerated wood scraps in the form of wood pellets, wood briquettes or similar forms, classified under CN codes 4401 31 00 and 4401 32 00, and for the delivery for use as heating fuel of sawdust, waste and non-agglomerated wood scraps, classified under CN codes 4401 41 00 and 4401 49 00. The reduced rate will apply to deliveries to individuals, legal persons and other entities, regardless of the legal form of organization, based on a statement of own responsibility made available to the supplier certifying their quality as end users.

2.Reduced VAT rates in the energy industry

It has been clarified that the reduced VAT rate of 5% for the delivery and installation of photovoltaic panels intended for homes and buildings of the central or local public administration and the buildings of the entities under their control (except for commercial companies) applies to all components required purchased separately for this purpose. The reduced rate of VAT also applies to heat pumps.

A new provision has been introduced that extends the applicability of the reduced 5% VAT rate to cover:

• delivery and/or installation of components to repair and/or expand these systems;

• the delivery of systems as a component part of construction deliveries, as well as for the delivery and installation of systems as extra options in such deliveries, to the recipients mentioned above.

To benefit from the above reduced VAT rates, legal entity buyers are required to sign a statement of own responsibility, as per annex no. 1 to Law no. 216/2023.

Individual buyers can benefit from the application of reduced VAT rates according to art. 291 para. (3) lit. p), r) and s) of the Fiscal Code based on the signature of the buyer receiving the products on an invoice mentioning the address of the home where the products are installed. Otherwise, the reduced VAT rates are applied based on a statement of own responsibility made available to suppliers using the model provided in annex no. 2 to Law no. 216/2023.

Source: [Law no. 216/2023 for the amendment of art. 291 paragraph (3) letter m), n), p) and q) of the Fiscal Code, published in Official Gazette no. 633 dated 11 July 2023]