Moldova is discussing the idea of setting a reduced VAT rate of 8% for large categories of agri-food products.
The Foreign Investors Association of Moldova (FIA) proposes to apply a single reduced VAT rate (8%) from 2024 to all major categories of products such as dairy products, bakery products, fruits and vegetables. Currently, the 8% VAT rate applies only to certain commodity items that are difficult to identify and track. For example, the reduced VAT rate applies to a portion of baked goods and bread (190120000, 190540, 190590300, 190590700, 190590800), but it would be easier if the reduced rate applied to all baked goods, according to the combined commodity nomenclature. FIA proposes to review and reduce the VAT rate for milk and dairy products with fat content up to 40% of the total weight; for livestock products in live weight and for fresh products of plant and horticulture produced, imported or supplied to Moldova (including dill and parsley, sugar beets - fresh or frozen, live birds for reproduction). The organization stresses that there are such examples in other countries. For example, in Romania, VAT of 9% is applied to the sale of food and beverages intended for consumption by animals and humans, including ingredients used for cooking; in Austria, a reduced VAT rate of 10% is applied to food, books, pharmaceuticals, passenger transport, newspapers, hotel services and cultural and entertainment events. In Germany, foodstuffs are taxed at 7%, in Poland and Cyprus - 5%, in Slovakia - 10%, in Czech Republic - 15%. It is worth noting that the establishment of a reduced VAT rate for agri-food products has been discussed several times over the past few years, but no consensus has been found on the categories of products and VAT rates. // 21.03.2023 – InfoMarket
