Romania/June 2015 Starting from June 1st, 2015 the Romanian government extended the range of products and services applying the reduced VAT rate of 9%, including now also food items. The legislative change was introduced through the Governmental Order 6/2015 and Government’s Decision for updated Methodological Norms of Tax Code 367/2015. The list of products and services – food related, allowed to be sold applying 9% VAT rate includes: Food and drinks for human and animal consumption, except alcoholic beverages Live birds and animals of domestic species Seeds, plants and ingredients used for cooking Products used for filling or supplementing the foods Restaurant and catering services, except alcoholic beverages Tourist services, except alcoholic beverages The Code of products is in compliance with Annex 1 of Council Regulation (EEC) No 2658/87 of 23 July 1987 on Customs and Statistical Nomenclature and the Common Customs Tariff, as amended by the Council Implementing Regulation (EU) no. 1101/2014 of the Commission of 16 October 2014 The reduced VAT rate is to be applied by all parties in supply chain. The rule is not applicable for the following products: seeds, fruits, fats, oils, vegetable extract, salt, chemical products if the below conditions are not complied with: •items sold in own stores or cash & carry units: used in food manufacturing process , in restaurants or in other food service establishments •items delivered to clients having direct activities in retail, cash & carry, foods manufacturing, restaurants or other food service establishments The above rule is also available for imports and intra-community acquisitions. Importers of food products have the obligation to submit to Customs a statement if they meet any of the above mentioned criteria for the reduced rate VAT. Alternatively, the standard VAT rate is applicable for the aforementioned acquisitions at 24%. The impact of the reduced VAT measure is expected to increase economic activity within the country, improving the population’s capability of consumption and stimulating investments in Romania. Romania is continuously becoming a more attractive tax environment for both local and international businesses, taking into consideration also other incentives such as exemption of corporate income tax for reinvested profits under certain conditions and the recent reduction of social security contributions.