Romanian VAT decrease to 20%

Romania to cut VAT rate

Having raised its VAT to 24%, from 19%, in 2010, making it the 5th highest in the EU, Romania has now committed to bringing back a lower tax rate and are planning to lower their tax rate to 20% in 2016, with a potential of a further 2% decrease to 18% in 2018 if it’s financially viable. Additionally there would be a drop from 24% to 9% for meat, fish, fruit, vegetables and other basic foodstuffs. Whilst this would result in over €2.5b budget impact, it is hoped that the lower rate will help to increase the compliance levels which saw a 3% decrease after the VAT increase was implemented in 2010.