Our analysis will focus after Part I on regulatory changes, made to the Tax Code by Law 296, regarding the regulation of cash payments, regulatory changes related to the expansion of the RO electronic invoicing system, and other items with tax implications.

Three briefings (this is the second one) will be communicated on this law, following exactly the structure of the normative act. In this alert we analyze the main changes regarding the VAT rates applicable in 2024 and the appearance of new products subject to non-harmonized excise taxes. If we are a simple producer of soft drinks with added sugars in an amount exceeding 5 grams per 100 ml of liquid, we become excise taxpayers, and this also applies to restaurants that produce lemonade with sugar or honey.
Resuming Part I, the next tax changes are:
20. The notion of livable housing “as is” is regulated, in the perspective of the reduced VAT rate for the sale of social housing. Fiscal procedure: As part of the VAT changes, the definition of the notion of social housing is modified, which in order to apply the reduced VAT rate must, at the time of sale, meet the conditions for being livable, and the legislature lists the minimum endowments to which the dwelling must meet, among which are: free access to the living space, without disturbing the possession of neighbors, access to electricity and drinking water with toilets, the existence of a parking area and food preparation area, exterior finishes, windows and doors, finished interior walls, has electrical installations.
It applies as of January 1, 2024.
21. Also within the tax definitions, the notion of “added sugar” is regulated, a product that we will follow quantitatively, both in solid products, such as pastry and confectionery, and in non-alcoholic beverages but with added sugar content .
Fiscal Procedure: “added sugar” means cane sugar, crystalline sucrose, invert sugar, dextrose, molasses, honey sugar, molasses and syrups such as malt syrup, fruit syrup, rice malt syrup, corn syrup, high-fructose corn syrup, maple syrup, glucose syrup, glucose-fructose, fructose, sucrose, glucose, lactose, hydrolyzed lactose and galactose added as ingredients, sugars in nectars such as coconut flower nectar, date nectar, agave nectar, sugars from unsweetened fruit juices, fruit juice concentrates, sugars from fruit purees and jams.
We need them to determine the VAT rate for solid products and only for non-alcoholic beverages with added sugar for possible non-harmonized excise taxes.
It applies from January 1, 2024.
22. Increasing the VAT rate to 19% for foods with added sugar and maintaining the VAT rate at 19% for non-alcoholic beverages with code NC2202 (beverages containing sugar) and alcoholic beverages.
Fiscal Procedure: Foods with added sugar are those foods that contain at least 10 grams of sugar per 100 grams of product, with the exception of cakes and cookies.
For the rest of food goods or for the sale of live animals and birds, respectively, plants and ingredients used in food preparation, the 9 percent VAT rate is maintained.
Restaurant and catering services retain the 9 percent VAT rate, except for sales of alcoholic beverages and sales of non-alcoholic beverages in NC2202.
It applies from January 1, 2024.
23. The VAT rate is increased from 5% to 9% for several types of goods.
Tax procedure: when selling the following goods and services, VAT will be charged at a rate of 9 percent:
– Social housing;
– Delivery and installation of photovoltaic panels, solar panels, heat pumps, when beneficiaries own homes or are local or central government buildings;
– Delivery of components and installation or repair of those mentioned in the previous point;
– Services regarding access to shopping centers, amusement parks, recreational parks, fairs, exhibitions, cinemas, cultural events and access to sports events.
It applies from January 1, 2024.
24. The reduced VAT rate of 5% is maintained for the delivery of firewood in the form of logs, stumps, sticks, branches, sawdust, wooden pallets, wood briquettes, to natural persons as end users. The same 5 percent VAT rate also applies when the beneficiaries are legal persons, regardless of organizational form, but the goods are purchased to be used as heating fuel.Tax procedure: this reduced VAT rate is applicable when the beneficiaries are not registered for VAT and the supporting document is a self-responsible declaration by the purchaser.
Very important: The legislature maintains the mandatory reverse charge measure for firewood deliveries when made between persons registered for VAT in Romania.
It applies from January 1, 2024.
25. The application of the reduced VAT rate of 5% is repealed, and accordingly, the VAT rate of 19% will be applied for the following goods and services:
– Access to sports facilities;
– Transportation by historic steam-powered vehicles for tourist purposes;
– Transportation by cable car, gondola lift, ski lift;
– Transportation by animal-drawn vehicles;
– Transportation by boats for tourist purposes;
– Supply of ecological and high-quality food. However, they remain foodstuffs and will be invoiced at the 9% VAT rate.
Tax procedure: 19% VAT is levied, except for ecological food (9% VAT).
Applies from January 1, 2024.
26. The procedure concerning the construction, modernization, repair of hospitals operated by non-capital entities, as well as those operated by the state public network, respectively, the delivery of medical equipment, devices, devices and consumables, as well as the adaptation, repair, lease, rental of such goods to non-profit entities or hospital units of the state public network is improved. Such supplies and services are exempt from deduction.
Tax procedure: Invoicing will be done under VAT exemption with the right of deduction to both public network hospitals and nonprofit entities listed in the Register maintained by ANAF based on the beneficiary’s declaration. Previously, billing to the NGO was done with the collection and reimbursement of VAT.
It applies from January 1, 2024.
27. After the implementation and expansion of the RO electronic invoice system, the tax notion of “invoice” will be understood only as an invoice sent in the RO electronic invoice system. The consequence is that it will be possible to deduct VAT on purchases only from invoices reported electronically through this system.
Tax procedure: in the next tax analysis we will develop the new procedures related to the expansion of the electronic invoice reporting system, RO e-invoice. Recall that it becomes mandatory in the B2B (taxable person to taxable person) system, starting January 1, 2024. The first formal condition for deducting VAT on purchases is the possession of the supporting document: the invoice. After the new regulatory changes, only that received through the RO electronic invoice system is considered an invoice.
As of July 1, 2024, the regulations on VAT deduction will apply only to invoices sent under this system.
28. The category of goods subject to non-harmonized excise duty is expanded with the assortment of soft drinks with added sugar in addition to the existing ones. In Romania, the following five types of goods are subject to non-harmonized excise taxes:
(a) products containing tobacco, intended for inhalation without combustion;
(b) liquids with or without nicotine, intended for inhalation without combustion;
(c) products intended for inhalation without combustion, containing tobacco substitutes, with or without nicotine, including those contained in supplies delivered together with electronic cigarettes and other similar personal electric vaporization devices
(d) non-alcoholic beverages with added sugars for which the total sugar level is between 5 g-8 g/100 ml;
(e) non-alcoholic beverages with added sugars for which the total sugar level is more than 8 g/100 ml.
Fiscal procedure: For production in the national territory of Romania, intra-community purchase and import of these products, the following fiscal procedures appear:
Excise taxes are due; the value of the excise tax is adopted in the very final part of the law, where there is a tabular annex with the value of the excise tax for each assortment of goods.
It is mandatory to notify the Romanian customs authority for these activities. Notification formats will be determined by the law enforcement regulations.
Excise duty is paid by the 25th of the following month, for production in Romania or intra-Community purchase or on the date of importation. The excise duty is declared monthly through the Form 100 declaration and annually through the Form 120 declaration, submitted by April 30 of the following year.
Applies from January 1, 2024.
29. Reduction in excise duty on fuels and increase in excise duty on other excisable products. In Appendix No. 2 of the Act, the value of the harmonized excise compensation for the years 2024 – 2026 is updated. In this category of products we find: alcoholic beverages, manufactured tobacco, and energy products.
Tax Procedure: From the point of view of the end consumer, the only good news is the reduction of excise duty paid on fuels. We should check whether we actually find a reduction in the price of fuel at the time of purchase as well. Otherwise, for the other excisable products such as alcoholic beverages, tobacco, and even electricity consumed by households, we identify an increase in the value of excise taxes.
The rate of reduction of excise tax on fuel is about 6 percent, while the average rate of increase for other products is about 16 percent. It applies from January 1, 2024.
30. Transitional measures on VAT on social housing.
An individual individually or jointly with another individual can also purchase a house in 2024 at the reduced VAT rate of 5% if paid in advance by December 31, 2023. The law does not mention the word full down payment, and we cannot add anything to the law.
Note: A similar procedure is also valid in 2023, meaning that additional social housing can be purchased in 2023 with a VAT rate of 5% if down payments have been made until December 31, 2022, a procedure governed by OG no. 16/2022, as amended.
Tax procedure: in order to benefit from this reduced VAT rate, it is necessary to sign a pre-contract/promise of sale, invoicing and prepayment.
Applies throughout the year 2024.
31. Transitional measures in the field of excisable products.
For the year 2024, the legislature introduces a derogation from updating excise taxes to the rate of inflation, according to Article VI of the law. From a fiscal point of view, we already know that the excise tax on fuels has been reduced by about 6 percent, but the other products subject to harmonized excise tax experience an excise tax increase of about 16 percent, which is higher than the official inflation rate.
Applies for the year 2024.