Tax Flash nr. 89
10 August 2023
Modification and completion of the Methodological Norms regarding the Fiscal Code
On August 4, 2023, Decision no. 653/2023 for the modification and completion of Title VII "Value Added Tax" of the Methodological Norms for the Application of Law no. 227/2015 regarding the Fiscal Code, approved by Government Decision no. 1/2016, was published in the Official Gazette and entered into force. The decision brings additions and changes to the rules of application of the Fiscal Code, among which we mention the following:
- Goods falling under NC codes 2202 10 00 and 2202 99 are exempted from the application of the 9% rate (according to point 37, letter ț).
- Provisions regarding the justification of the tax exemption provided for in art. 294, para. (5) are introduced, as follows:
- For the services mentioned in letter a) to build, rehabilitate, modernize hospital units from the public state network - the exemption is justified by the documentation on the basis of which these services are provided, such as the contracts concluded with the beneficiary.
- For the services mentioned in letter b) medical equipment, devices, articles, accessories and protective equipment, materials and consumables for sanitary use as well as for the adaptation, repair, rental and leasing of such goods - the exemption is applied directly through invoicing without VAT and is justified on the basis of the own responsibility declaration of the legal representative of the hospital unit, from which it can be concluded that the respective goods are normally intended for use in the field of health care or for use by disabled persons, essential goods for compensating and overcoming disabilities. If the goods are invoiced to a central or local public institution/authority, the tax exemption is applied directly, by invoicing without VAT and is justified by the aforementioned declaration plus an own responsibility declaration of the respective legal representative of the central public institution/authority from which it can be seen that the purchased goods/services are intended for a hospital unit from the public state network for which it provides the financing.
- For imports and intra-community purchases of goods provided for in art. 294 para. (5) lit. b) from the Fiscal Code, the VAT exemption applies to operations carried out directly by the hospital unit from the public state network or by the central or local public institution/authority that ensures its financing, based on the declarations provided above, as the case may be, which is submitted to the competent customs body at the time of import, respectively which is kept in the records of the beneficiary, in order to justify the VAT exemption.
- The provisions regarding the own responsibility declarations provided for in para. (2) and (3) do not apply to the goods provided for in art. 294 para. (5) lit. c) and d) of the Fiscal Code (delivery of prostheses and their accessories, delivery of orthopedic products), these being exempt regardless of who they are delivered to.
We note that the rules do not provide additional clarifications regarding the classification of the products provided for in art. 294, para. (5), lit. c) and d), being still applicable the same provisions regarding the classification as during the period when the reduced VAT rate was applicable to the delivery of these products.