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Romanian Opposition Pushes For 16pc VAT Rate

by Ulrika Lomas, Tax-News.com, Brussels

25 July 2019


Opposition lawmakers in Romania have tabled new Bill B317/2019, which would reduce the headline VAT rate from 19 percent to 16 percent beginning next year.

According to preliminary media reports, the Senate has now approved the law but it would need to be approved by government lawmakers in the Chamber of Deputies, the influential lower house of parliament, before it could become law from January 1, 2020.

Earlier the Government had proposed to reduce the rate to 18 percent but shelved these plans late last year.

Instead, from November 1, 2018, new reduced rates of value-added tax were introduced on a range of supplies in the tourism, leisure, and catering sectors.

Under the changes, the VAT rate on hotel and other accommodation services was reduced to five percent, down from nine percent previously. In addition, the five percent VAT rate also now applies to restaurants and catering services, although most alcoholic beverages are excluded from the reduction. Furthermore, the five percent VAT rate was applied to sporting and recreational facilities, such as amusements parks, which had previously been subject to the headline VAT rate.

Further, with effect from June 1, 2019, the VAT rate was lowered from nine percent to five percent for certain organic or traditional high-quality foods. Most foodstuffs for human consumption and non-alcoholic beverages benefit from a nine percent reduced rate.

TAGS: tax | value added tax (VAT) | law | Romania | food | services

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