VAT rate updates in Romania, effective from August 1, 2025

Romania’s new fiscal law, effective August 1, 2025, increases the standard VAT rate from 19% to 21% and consolidates the reduced rates (5% and 9%) into a single 11% rate. The 11% VAT applies to key sectors like food, medicines, housing, cultural services, and hospitality, while raw materials will be taxed at the full 21%, potentially impacting pricing and refunds.

 

Few days ago, Romania’s president officially signed the fiscal package, making it a new fiscal law that has been officially published in the Official Gazette, introducing changes to the country’s value-added tax (VAT) system. The updates will take effect starting August 1, 2025.

Main changes:

• Standard VAT rate rises from 19% to 21%.

• Reduced rates are unified into a single 11% rate, replacing 5% and 9%.

What Qualifies for 11% VAT:

• Medicines

• Most food items (excluding alcohol, sugary goods, and certain supplements)

• Water services and agricultural inputs

• Books and newspapers (with content limitations)

• Cultural site entries

• Heating materials and services

• Social housing and specific real estate types

• Hotel stays and restaurant services (without alcohol or sugary drinks)

• Finished food products qualify for the reduced rate.

• Raw materials face the full 21%, leading to refund and pricing challenges.

The HoReCa sector keeps the 11% rate—for now.