VAT reduction from 9% to 5% for Romanian organic, mountain or traditional food

VAT reduction from 9% to 5% for Romanian organic, mountain or traditional food

by Daniel Chirovici – Expert accountant

On 14th of May 2019, GO 31/2019 came into force, reducing the VAT from 9% to 5% especially for the delivery of high-quality food approved by the Ministry of Agriculture and Rural Development.

The Ordinance specifies the special character of these products with a reduced VAT of 5% as: mountain, organic or traditional.

In order to know exactly the food for which this VAT reduction of 5% is possible, you must complete the following steps:

  1. a) For mountain products, please refer to the updated register of such products (NATIONAL REGISTER OF MOUNTAIN PRODUCTS) issued by the Ministry of Agriculture and Rural Development.

So, if you are a merchant and you want to deliver such Romanian mountain products with a VAT of only 5%, we recommend you the following:

  • Check that your provider is listed in this register on:

https://www.madr.ro/industrie-alimentara/sisteme-de-calitate-europene-si-indicatii-geografice/produse-agricole-si-alimentare/produs-montan.html

  • The product must have the optional quality label “MOUNTAIN PRODUCT”
  1. b) For organic products, make sure you have a certificate issued by an inspection and certification body for organic products approved by the Ministry of Agriculture and Rural Development.

The list of such bodies is available on the webpage:

https://www.madr.ro/agricultura-ecologica/organisme-de-control-aprobate.html

  • The label of organic products will necessarily include the national logo “ae”

  1. c) For Romanian traditional products, please refer to the updated register of such products (NATIONAL REGISTER OF TRADITIONAL PRODUCTS) issued by the Ministry of Agriculture and Rural Development.

So, if you are a merchant and you want to deliver such Romanian traditional products with a VAT of only 5%, we recommend you the following:

  • Check that your provider of traditional products is listed in this register on:

https://www.madr.ro/industrie-alimentara/produse-traditionale-romanesti/implementarea-ordinului-nr-724-2013-privind-atestarea-produselor-traditionale.html

This register includes a table, the name of the traditional product, the year of registration, the manufacturer of the certified product and its address.

Ask the provider for a copy of the certification document issued by the competent authority.

Transposition into the Fiscal Code

The VAT reduction provided by GEO 31/2019 is transposed into the fiscal legislation by an amendment to the Law 227/2015 (Fiscal Code) for the title Value Added Tax, chapter VIII Tax quotas, article 291 Quotas, paragraph (3) on reduced percentage of 5%.

The entire text of GEO 31/2019, article 6, point 2, is presented below:

“In article 291 paragraph (3), after point j), a new point k) shall be inserted: “k) the delivery of high-quality food, more precisely mountain, organic, traditional products, authorized by the Ministry of Agriculture and Rural Development. The delivery of these foods shall be accompanied by a copy of the certification document issued by the competent authority, except for the delivery to the final consumer.”

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Daniel Chirovici
Daniel Chirovici, Exprom Accounting Expert, currently studies at CIMA (Chartered Institute of Management Accountants), UK. Bringing 18 years of experience in the financial-accounting field, he has participated in statutary financial audits, internal censor activities, and has successfully organised and run five financial departments.