VAT in Romania, Reduced to 20% From the 1st of January 2016

Written by: Bridgewest

VAT-in-Romania-Reduced-to-20%-From-1st-of-January-2016.jpgSince the beginning of 2016, the standard VAT (value added tax) in Romania is applicable at a rate of 20%, as an effect of the new Romanian Fiscal Code. Until the end of 2015, the standard VAT applicable to both companies and individuals was established at a rate of 24%. According to the new Fiscal Code, the VAT will be further reduced from the 1st of January 2017, from 20% to 19%; our Romanian accountants can offer you a detailed presentation on the new VAT

Main VAT changes in Romania 

The VAT in Romania was increased in 2010 from 19% to 24%, as an effect of local and global economic crisis; the latest changes to the Fiscal Code will restore the regular VAT applicable in Romania, which was established at a rate of 19%. 
Until the end of 2015, Romania applied a reduced VAT at the rate of 9% for several economic activities. From the 1st of January, the rate was reduced at 5% and it is applicable, mainly, to cultural events and products. 
The 5% rate applies in the following situations:
for individuals paying tickets to: castles, museums, historical monuments, zoos, fairs, cultural events and cinemas; it also applies for access to sporting events;
for products such as school manuals, books, newspapers and magazines.

VAT compliance in Romania 

Any foreign company setting up a business in Romania, which sells on the Romanian market goods or services under a VAT number, has to respect the rules established by the Romanian Tax Code. VAT compliance requires the following: 
invoices issued by the company must contain the requirements of the Tax Code;
controls on the integrity of the electronic invoices;
company’s order books and records have to be held for the minimum of ten years;
using foreign currency rates established by the Finance Ministry.
Our Romanian accountants can offer you further details on the accountancy legislation available for both local and foreign companies
If you need further information on the new VAT applicable in Romania and its effects on the foreign businesses, please contact our Bucharest accounting firm