Chamber of Deputies adopts law to cut VAT for heating services to 5 pct

Chamber of Deputies adopted today, as a decision-making chamber, the reduction of VAT on population-based heating energy from 19 percent to 5 percent with next year’s implementation and block apartment disconnections from district heating district. Individual heating systems will only be allowed outside areas of cities designated as unitary heating zones, according to a draft amendment to the Law on public service of heat supply.

Bans on the installation of the apartment heating boilers have appeared since 2002-2003, amid a spectacular increase in the disconnections from RADET, but have not been applied.

Last summer, the General Council of Bucharest (CGMB) adopted a Central Energy Consumption Strategy for Central Bucharest consumers, mentioning the intention to set up unitary heating zones in Bucharest, where there is only one centralized heating system, which means prohibiting the disconnections from RADET and the installation of individual thermal power plants.

According to the normative act, in all the blocks connected to the centralized heat supply system it is mandatory to install, by the end of 2020, measurement systems for the individualization of heating/cooling and hot water consumption at the level of each apartment or space other than residential.

Where the use of individual meters is not cost-effective, it is mandatory to install the technical systems to determine the individual heat consumption, the cost allocators, on all heating units of each apartment or other non-residential space.

Finally, with a VAT of 5 percent, for the same level of tariffs and consumption, the heat and hot water bills delivered in centralized systems will be reduced by 11.7 percent compared to the current situation.