Food donations exempt from VAT

Food donations have been exempt from VAT from today onwards, since the Amendments of the Regulation on VAT have entered into force. Food donations have been enabled by the Law on Agriculture that was enacted on March 6^th 2015, but certain subordinate acts and regulations had to be enacted as well for its implementation.

At the end of October the Ministry of Agriculture enacted the Regulation on conditions, criteria and manners of food donations and animal food donations (The Official Gazette, 119/2015), and on November 30^th 2015 the Ministry published the Regulation on amendments and addendums to the Regulation on VAT in The Official Gazette (no. 130), which enters into force eight days after its publication, i.e. today on December 8^th 2015.
By this Regulation the Ministry of Agriculture has regulated the conditions, criteria and manners of food donations and animal food donations, the standards that need to be fulfilled by every agent and final donation recipient, as well as the contents and maintenance of the Register of agents in food donations.

The amendments of the Regulation on VAT regulate that for those tax payers who donate food with the purpose of preventing its tossing, protecting environment or helping final recipients, in line with the above mentioned Regulation, such donations should be accepted as deficit for which no VAT will be paid, under the condition that the value of such donations does not exceed 2% of last year’s income or receipt.
Food donations are given to the final recipients exclusively via non-profit legal entities which perform their humanitarian activity in line with specific regulations and are registered as agents participating in the food donation chain, except in the case of natural hazards.

The Regulation on conditions, criteria and manners of food donations and animal food donations also stipulates that food can be donated to the final recipient –a person in need who is socially endangered and/or affected by natural hazards or disasters. A person in need who is socially endangered is a social-care beneficiary, user of financial benefit and social assistance, as well as a person who appears to be in need from the perspective of a donator or an agent. Only the food that is safe can be donated, and this Regulation enables donation of food that has been produced or made in the public meal facilities and gastronomic sections in shops, if such food has not already been served to the end user. Moreover, the food marked as ‘best use before the date’ must be donated to the final recipient exclusively before the expiry of that date.
In the case of direct food donations, the donator must donate the food marked by the minimum expiry date to the final recipient exclusively before the end of that date, while in the case of donating via an agent, food must be given to the agent before the end of the minimum expiry date. The agent can offer and give food to the final user even after the expiry date, but under several conditions: the user has to be informed of the minimum expiry date and he/she accepts the donation of such food; the agent has given the user the guidelines on the use of such food in line with best practice guidebooks from the European Union and national guidebooks.

The Regulation on conditions, criteria and manners of food donations and animal food donations also defines the manner of maintaining the record of donators and agents, the conditions to be fulfilled by agents, and determines that natural or legal entities with the intention of being agents must be enlisted in the Register of agents in food donations, managed by the Ministry of Agriculture. 
 

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