Update on reduced VAT rates

Update in relation to the amending law (No. 3) of the VAT Law that entered into force on 21 July 2023. This amendment concerns the application of a reduced VAT rate of 3% and a zero rate to certain categories of goods and services.

What is the amendment about

A. The subheading of Article 18A is replaced by the phrase: ‘Reduced rate of 9%’ instead of ‘Reduced rate of 8%’ – Transactions of Schedule 12

B. Addition of Article 18B immediately after Article 18A

According to the provisions of the new Article 18B, any transaction falling under the Schedule Fifteen* (New Schedule – see point E below) as well as the corresponding acquisitions or imports of goods falling under the said Schedule, will be subject to the reduced rate of 3%

* The Council of Ministers, by decree, may add or delete the type of goods and services included in Schedule Fifteen.

C. Deletion of paragraphs 5 and 6 from Table A and deletion of paragraph 2 from Table B of Schedule Five

(a) Paragraphs 5 and 6 of Table A have been transferred to paragraphs 16 and 17 of Schedule Six (see point D below)

(b) Paragraph 2 of Table B was transferred to paragraph 1 of Table B of the new Fifteenth Schedule (See point E below)

D. Amendment of Schedule Six

New paragraphs 16 and 17 are added after paragraph 15:

E. Addition of the new Schedule Fifteen immediately after the Schedule Fourteen

SCHEDULE FIFTEEN
(Article 18B)

Table A: Supply of goods

1. Delivery of books, newspapers and periodicals provided either in physical form or electronically or in both formats (including brochures, prospectuses and similar printed material, children’s illustrated books and tracing and colouring books, printed or handwritten musical scores, hydrographic maps or the like), excluding publications intended entirely or mainly for advertising purposes and publications services consisting wholly or primarily of video content or audio music; production of non-profit organization publications and services related to the production of such.
The items of this paragraph are classified in Codes CN 49.01 to CN 49.05.

2. Talking books for people with disabilities of CN Code ex. 85.23.

3. Supply of the following goods:

(a) Special lifting devices (stairs, lifts, hoists and the like), used for the service of persons with disabilities of CN Code ex. 84.28.
(b) Wheelchair-type carriages and other vehicles for disabled persons, whether or not with a motor or other propulsion mechanism of CN Code 87.13.
(c) (i) Orthopedic articles and appliances, including medical surgical belts, bandages and crutches.
(ii) Splints, braces and other articles and devices for fractures.
(iii) Prosthetic items and devices.
(iv) Hearing aids for the deaf and other devices that are hand-held, carried by persons, or inserted into the human body for the purpose of filling a deficiency or treating a disability. Parts and accessories of the above goods are excluded.

The items of this subparagraph are classified in CN Code ex. 90.21.

Table B: Provision of services

1. Street cleaning, waste collection and waste treatment services, excluding services provided by state authorities, local government authorities and organizations under public law.

2. Wastewater disposal and treatment and emptying of septic and industrial tanks.

3. Right of entry from the first performance of theatrical, musical and dance works or classical plays.”