President Klaus Iohannis promulgated a law that provides for cutting the value-added tax (VAT) rate from 19% to 5% on the delivery of heat pumps, photovoltaic and solar panels, Agerpres informs.

The law stimulating investment in energy efficiency supplements Article 291 (3) in Fiscal Code Law 227/2015 by reducing the VAT rate levied on the supply of heat pumps, photovoltaic panels and solar thermal panels from a standard 19% to 5% in order to reduce the consumption of electricity and consumers’ dependence on the volatility of the electricity market.

Under the new law, the 5% VAT tax is levied upon the delivery and installation of photovoltaic panels, solar thermal panels, high-efficiency low-emission heating systems that fall within the reference values for particulate matter emissions established in European directives intended for homes, including installation kits, components, full solutions, as the case may be, as well as those intended for central or local public administration buildings, buildings of entities under their coordination/subordination, with the exception of commercial companies.

By way of derogation, the law enters into force three days of its publication in the Official Journal of Romania, Part I.

Agerpres