Romania's President Signs VAT Law: New Rates, Simplified System
Romania's President has signed Law No. 141/2025, introducing significant changes to the country's Value Added Tax (VAT) system. The new law, effective August 1, 2025, brings updates to various tax rates and rules. The law combines the reduced VAT rates of 9% and 5% into a single reduced rate of 11%. This new rate will apply to a range of goods and services, including medicines, staple foods, certain cultural services, printed books and newspapers, energy services, hospitality, restaurant, and catering services not involving alcoholic beverages. The standard VAT rate increases from 19% to 21%. Meanwhile, the temporary reduced 9% VAT rate for qualifying housing transactions will continue until August 1, 2026, under specific conditions. The law also introduces changes to bank-specific turnover tax, dividend tax, income tax rules, and health contributions. The signing of Law No. 141/2025 marks a significant shift in Romania's VAT landscape. The new rates and rules aim to simplify the tax system and generate additional revenue. Businesses and consumers should prepare for these changes, which come into effect on August 1, 2025.
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