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Law no. 254/2024 amending Art. 291 para. (2) of Law no. 227/2015 on the Tax Code.

Law No. 254/2024, enacted by the Romanian Parliament and published in Official Gazette No. 1006. It introduces significant amendments to Article 291(2) of Law No. 227/2015 on the Fiscal Code, specifically concerning the application of the reduced 9% VAT rate to certain supplies of goods and services.

The main amendment concerns the reduced rate of 9%, which continues to apply to a wide range of goods, including food and beverages for human and animal consumption, live animals and poultry, seeds and ingredients for food preparation. An important novelty introduced by this law is the inclusion of bee feed in the category of goods benefiting from this reduced rate.

However, the changes underline the existing exceptions. Foods with added sugar are no longer covered by this tax regime. These include products such as sponge cakes and biscuits. Excepting the specified for powdered milk for infants and young children.

These adjustments are designed to address public health concerns by encouraging the consumption of healthier and more natural food products. The inclusion of bee feed in the reduced rate category also reflects the importance of supporting beekeeping and bee products.
Law 254/2024 is an important step towards a more responsible fiscal policy in the area of food. It has the potential to positively influence consumption habits and public health. With this regulation, Romania reaffirms its commitment to promote healthy eating and protect consumer welfare.

The amendments will enter into force on January 1, 2025. They allow sufficient time for all market players to adapt to the new regulations.

Emergency Ordinance No. 123 of October 23, 2024 to amend and supplement the legal provisions on “Excise Duties and Other Special Taxes” in Law No. 227/2015 on the Tax Code.

GEO no. 123/2024, issued by the Romanian Government and published in the Official Gazette no. 1070, aims at amending and supplementing Title VIII on “Excise Duties and Other Special Taxes” of Law no. 227/2015 on the Tax Code. The measures adopted are based on the urgent need to ensure minimum stocks of crude oil and petroleum products. And also to improve the efficiency of excise duty collection.

The context of the adoption of this Ordinance is marked by the following reasons:

• The need to regulate emergency and specific stocks, treating the storage places of the state reserve as fiscal warehouses.
• Supply risks, in the current geopolitical context, which may affect resource supplies.
• Combating excise tax evasion and ensuring efficient collection of budget revenues.

Main changes

1. Regarding excise duties on beer, a new paragraph is introduced (Art. 342 para. (18) of Law No. 227/2015 on the Fiscal Code), which sets the excise duty levels for beer, with a gradual annual increase.
2. It specifies that the delivery of excise products will be made only upon proof of payment of excise duty, and the accompanying notices will include the mention “excise duty paid”.
3. It also assimilates the places of storage of the state reserve to tax warehouses, facilitating the storage and delivery of products.
4. New rules for tobacco operators. The conditions of tobacco trading are regulated, requiring specific authorizations.
5. Rules for excise products. Provides a number of clarifications on the tax regime for products manufactured in tax warehouses, including production and processing conditions.

GEO No 123/2024 responds to urgent regulatory needs in the field of excise duties and the warehousing of strategic products, with a significant impact on tax efficiency and security of supply in Romania. It underlines the Government’s commitment to ensure a stable and predictable fiscal framework, essential for the business environment.

The Ordinance will enter into force immediately upon publication, except for some provisions that will apply from January 1, 2025, which gives economic operators a period of time to adapt to the present amendments.

Conclusion

It remains to be seen how these changes will operate in reality. And whether they will succeed in stimulating consumption and improving the level of budget revenue collection. Monitoring the results will provide valuable information on the effectiveness of these measures. And also their long-term impact on the Romanian economic environment.

Source: [Law No 254 of October 7, 2024 amending Article 291 para. (2) of Law no. 227/2015 on the Tax Code, published in the Official Gazette no. 1006 of October 8, 2024. Government Emergency Ordinance no. 123/2024 for the amendment and completion of Title VIII „Excise and other special taxes” of Law no. 227/2015 on the Tax Code, published in the Official Gazette no. 1070 of October 24, 2024]