The Authority provided detailed step-by-step instructions in accordance with current tax legislation, clarifying the eligibility criteria, the mechanism for receiving compensation, and the relevant deadlines to ensure compliance and avoid errors or penalties.

The Tax Administration defines an agricultural producer as a farmer engaged in livestock raising or the production of agricultural and livestock products, which are sold in their unprocessed state.

The compensation scheme is intended for agricultural producers for whom the standard VAT regime presents challenges. It applies when these producers supply agricultural products and services to VAT-registered taxable persons operating as collectors, processors of agricultural products, or certified agrotourism units, provided that such recipients do not benefit from this scheme.

Compensation is provided through a self-invoice, which is issued by the VAT-registered purchaser on behalf of the agricultural producer for the goods or services acquired. The invoice amount serves as the basis for calculating the compensation and must include the producer’s tax identification number (TIN) as well as all other mandatory elements of a tax invoice, in accordance with the provisions of the law.

To be eligible for compensation, the farmer’s annual turnover must not exceed the minimum threshold for VAT registration. Additionally, the goods or services must result from the farmer’s agricultural activity and be sold to VAT-registered taxable persons who carry out activities specified in the guidelines issued by the Ministry of Finance.

The Tax Administration advises that the farmer must be registered with a tax identification number (TIN) but is not required to submit periodic VAT declarations. The compensation rate is set at 10 percent of the total value of the products supplied by agricultural producers, as documented by tax invoices over a six-month period.

The request for compensation must be submitted every six months and delivered to the Tax Administration either electronically or via postal service, accompanied by copies of the tax invoices issued by the purchaser and the farmer’s bank account number.

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