VAT increases starting August 1

The standard rate applies to the taxable base for taxable operations that are not exempt from VAT or not subject to the reduced rate, and its level will be 21%, according to the draft Austerity Law published for public consultation.

The reduced VAT rate of 11% applies to the taxable base for the following supplies of services and/or deliveries of goods, including: the delivery of human-use medicines; the delivery of the following goods: foodstuffs, including beverages, intended for human consumption, whose NC codes are established by the methodological norms, except for: alcoholic beverages; non-alcoholic beverages falling under NC code 2202; foodstuffs with added sugar, with a total sugar content of at least 10 g/100 g of product, other than powdered milk for newborns, infants, and young children; dietary supplements as defined by Law no. 56/2021 on dietary supplements, as subsequently amended and supplemented.

It also applies to water supply and sewage services; the supply of water for agricultural irrigation; the delivery of fertilizers and pesticides of the type normally used in agricultural production, other than those mentioned under point f); seeds and other agricultural products intended for sowing or planting, as well as service provisions of the type normally used in agricultural production, as specified by joint order of the Minister of Finance and the Minister of Agriculture and Rural Development; the supply of chemical fertilizers and pesticides of the type normally used in agricultural production, as specified by the same joint order.

The reduced rate also applies to the delivery of school textbooks, books, newspapers, and magazines, in physical and/or electronic format, except for those that have, entirely or predominantly, video content or musical audio content, and those intended exclusively or primarily for advertising purposes; services granting access to castles, museums, memorial houses, historical monuments, architectural and archaeological monuments, zoos, and botanical gardens.

Also included is the supply to individuals of firewood in the form of logs, billets, twigs, branches, or similar forms falling under NC codes 4401 11 00 and 4401 12 00, as well as sawdust, wood waste, and scraps agglomerated into wood pellets, wood briquettes, or similar forms under NC codes 4401 31 00 and 4401 32 00; the delivery of unagglomerated sawdust, wood waste, and scraps used as heating fuel falling under NC codes 4401 41 00 and 4401 49 00, to individuals as final users, based on a declaration on their own responsibility.

The reduced VAT rate also applies to the delivery of the same categories of firewood and wood waste products to legal entities or other entities, regardless of their legal form of organization, including schools, hospitals, medical clinics, and social assistance units, as final users, based on a declaration on their own responsibility.

Additionally, it applies to the supply of thermal energy during the cold season

For the supply of thermal energy in the cold season, the reduced VAT rate applies to the following categories of consumers: the population; public and private hospitals, as defined by Law no. 95/2006 on healthcare reform, as amended and republished; public and private educational institutions, as defined by the National Education Law no. 1/2011, as amended and supplemented; non-governmental organizations regulated by law, as well as religious institutions as defined by Law no. 489/2006 on religious freedom and the general regime of religious denominations, as amended and republished; public and private accredited social service providers that offer social services included in the Nomenclature of Social Services, approved by Government Decision no. 867/2015, as well as the framework regulations for the organization and operation of social services, as subsequently amended and supplemented.

The reduced VAT rate also applies to the delivery of housing as part of social policy, including the land on which the housing is built. The land includes the building’s footprint. For the purposes of this regulation, housing delivered as part of social policy means: the delivery of buildings, including the land on which they are built, intended for use as retirement and nursing homes; the delivery of buildings, including the land on which they are built, intended for use as children’s homes and rehabilitation and recovery centers for minors with disabilities.

The reduced rate further applies to accommodation services in the hotel sector or similar sectors, including the rental of camping sites, to restaurant and catering services, except for alcoholic beverages and non-alcoholic beverages falling under NC code 2202.

The new VAT rates will come into effect on August 1, 2025.