The removal of certain categories of products from the application of the reduced VAT rate, depending on the applicable CN code

On July 31, 2025 Government Decision No. 602 ("GD No. 602") was published in the Official Gazette No. 715 for the modification and completion of the methodological norms for the application of Law No. 227/2015 regarding the Fiscal Code, approved by Government Decision No. 1/2026.

GD No. 602 comes into effect starting August 1, 2025, and provides clarifications regarding the applicable VAT rate for certain categories of products, following the enforcement of Law No. 141/2025 concerning certain fiscal-budgetary measures.

Among the most important legislative changes brought about by Government Decision No. 602, we mention the following:

• Defining food intended for human and animal consumption, which will fall under the reduced VAT rate of 11%, by referring to the provisions of European legislation (Regulation (EC) No. 178/2002).
• The removal of the reduced VAT rate and the introduction of the standard VAT rate of 21% for the delivery of the following categories of products:
  • live plants used as food intended for human or animal consumption or as raw materials or ingredients for preparing food intended for human or animal consumption, classified under CN code 0602 90 50;
  • hops and lupulin cones, classified under CN code 1210;
  • stearin from lard, lard oil, oleo-stearin, oleo-margarine, and tallow oil (CN code 1503);
  • castor oil and its fractions (CN code 1515 30);
  • fats and oils of animal or vegetable origin, products derived from their separation, processed food fats, classified under CN codes 1518 00, 1520 00 00, 1521, and 1522 00;
  • gums, resins, and other plant saps and extracts, classified under CN codes 1301 and 1302;
  • inorganic and organic chemical products, classified under CN codes 2801 – 2853 and 2901 – 2942;
  • other ingredients, such as plant/animal-based coloring substances, essential oils, gelatins, and others (CN codes 3203, 3204, 3301, 3302 10, 3402 13 00, 3501 – 3505, 3507, 3823, 3824 60, 3824 90 25, 3824 90 55, 3824 90 62, 3824 90 64, 3824 90 80, 3824 90 92 – 3824 90 96, 3912 31 00, 3913 10 00, 3917 10, and 4706 91 00);
• Within the list for which the reduced VAT rate of 11% applies only if proof is provided that they are used as food intended for human/animal consumption, there were added:
  • starch and starches, inulin, classified under CN code 1108;
  • straw and chaff from raw cereals, classified under CN code 1213.
• Updating the Methodological Norms in accordance with the provisions of the Fiscal Code, in the sense of repealing certain provisions that provided clarifications regarding dietary supplements and social housing, for which the reduced VAT rate was applied;
• Updating the declaration of commitment regarding the compliance with the destination of goods for which the application of the reduced rate is requested, to reflect the application of the new modification of the reduced VAT rate from 11%.

For more information, the EY team is at your disposal.