{"id":14736,"date":"2025-07-31T16:41:51","date_gmt":"2025-07-31T13:41:51","guid":{"rendered":"https:\/\/www.kreston.ro\/?p=14736"},"modified":"2025-07-31T16:41:51","modified_gmt":"2025-07-31T13:41:51","slug":"information-regarding-the-change-in-the-vat-rate","status":"publish","type":"post","link":"https:\/\/www.kreston.ro\/en\/2025\/07\/31\/information-regarding-the-change-in-the-vat-rate\/","title":{"rendered":"Information regarding the change in the VAT rate: increase from 19% to 21%"},"content":{"rendered":"

[vc_row][vc_column][vc_column_text css=”” css_params=””]Starting August 1, 2025, Romania\u2019s standard VAT rate will increase from 19% to 21%, under Law No. 141\/2025, published in the Official Gazette on July 25, 2025. Additionally, the 5% and 9% reduced VAT rates will be merged into a unified 11% reduced rate, applicable to specific categories of goods and services.<\/p>\n

 Key VAT Changes<\/h3>\n

– The standard VAT rate increases from 19% to 21% for most goods and services after August 1, 2025.
\n– The new single 11% reduced VAT rate applies to:
\n\u2022 basic food (excluding sugar or alcohol),
\n\u2022 books, magazines, manuals,
\n\u2022 HoReCa services (restaurants, catering, hotels with breakfast),
\n\u2022 thermal energy, water, sewage, firewood, fertilizers, etc.
\n– The former 5% and 9% rates are removed, with some exceptions for social housing.<\/p>\n

Transitional Regimes and Special Cases<\/h3>\n

– Social housing \u2264 120 m\u00b2 and \u2264 600,000 RON will retain the 9% rate until August 1, 2026, if:
\n1. contract is signed before July 31, 2025,
\n2. at least 20% advance payment is made,
\n3. the buyer hasn\u2019t used this facility before.
\n– The HoReCa sector will be reassessed in October 2025 regarding the continued use of the 11% rate.
\n– In the food industry, there may be VAT recovery issues when inputs are taxed at 21% and the final product at 11%.<\/p>\n

Recommendations for Clients<\/h3>\n

– Update ERP systems, invoicing software, and cash registers to include the new 21% and 11% VAT rates.
\n– Adjust VAT on advances invoiced before but delivered after August 1.
\n– Communicate price changes clearly to end customers regarding VAT-inclusive pricing.
\n– In all commercial contracts, provide rules to determine which party bears the VAT rate differences.<\/p>\n

Determining the VAT Rate in the Context of the Increase from 19% to 21%<\/strong><\/h3>\n

In light of the recent legislative changes concerning the increase of the standard VAT rate from 19% to 21%, it is essential to understand the correct moment when the applicable VAT rate is determined. This text outlines the main rules stipulated in the Fiscal Code for properly determining the VAT rate, depending on the timing of the delivery of goods or provision of services, along with a few relevant practical examples.<\/p>\n

1. Legal Basis<\/h3>\n

– According to Article 291(4) of the Fiscal Code, the applicable VAT rate is the one in force at the date the VAT event occurs.
\n– According to Article 281(1), the VAT event occurs at the time of the delivery of goods or the provision of services.
\n– The delivery\/provision date is determined based on Articles 281\u2013285.<\/p>\n

2. Clarifications from Article 281 \u2013 Paragraphs 7, 8, and 12<\/h3>\n

– (7) Services with successive settlements\/payments (e.g. construction, consultancy, research) are considered performed on the date the documents are issued (work reports, situations) or the date of acceptance by the beneficiary, according to the contract.<\/p>\n

– (8) In the case of continuous supplies\/services (e.g. gas, water, electricity, phone, rent), the delivery\/provision is considered performed at each contractual payment date or, if not specified, on the invoice date (the billing period cannot exceed one year).<\/p>\n

– (12) Services not falling under paragraphs (7)\u2013(10) are considered completed on the date the service is finished.<\/p>\n

3. Practical Examples<\/h3>\n

Example 1 \u2013 Rental services<\/em><\/strong>
\nAccording to the contract, rent is due at the beginning of each quarter. The payment made on July 1, 2025 for July, August, and September will be invoiced with 19% VAT. No adjustment is required for August and September.<\/p>\n

Example 2 \u2013 Construction services<\/em><\/strong>
\nWork performed in July is confirmed through a work situation issued and approved in August. According to the contract, this is the relevant date, so the 21% VAT rate applies.<\/p>\n

Example 3 \u2013 Advance adjustment<\/em><\/strong>
\nIn June, the delivery of equipment is contracted, total value 10,000 RON + VAT.  30% advance is invoiced:
\n– Invoice for the advance: 3,000 RON base + 570 RON VAT (19%)
\nThe equipment is delivered in August. The final invoice includes:
\n1. Equipment delivery: 10,000 RON base, 2,100 RON VAT (21%)
\n2. Advance reversal: -3,000 RON base, -570 RON VAT (19%)
\nThe 21% VAT rate is applied to the full product value.[\/vc_column_text][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

[vc_row][vc_column][vc_column_text css=”” css_params=””]Starting August 1, 2025, Romania\u2019s standard VAT rate will increase from 19% to 21%, under Law No. 141\/2025, published in the Official Gazette on July 25, 2025. Additionally, the 5% and 9% reduced VAT rates will be merged into a unified 11% reduced rate, applicable to specific categories of goods and services.  Key […]<\/p>\n","protected":false},"author":1,"featured_media":14902,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[262],"tags":[],"class_list":["post-14736","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-tax-alert-en"],"featured_image_src":{"landsacpe":["https:\/\/www.kreston.ro\/wp-content\/uploads\/2013\/03\/kreston_romania_news_cover-1140x445.png",1140,445,true],"list":["https:\/\/www.kreston.ro\/wp-content\/uploads\/2013\/03\/kreston_romania_news_cover-463x348.png",463,348,true],"medium":["https:\/\/www.kreston.ro\/wp-content\/uploads\/2013\/03\/kreston_romania_news_cover-300x169.png",300,169,true],"full":["https:\/\/www.kreston.ro\/wp-content\/uploads\/2013\/03\/kreston_romania_news_cover.png",1500,845,false]},"yoast_head":"\nInformation regarding the change in the VAT rate: increase from 19% to 21% - Kreston Romania<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.kreston.ro\/en\/2025\/07\/31\/information-regarding-the-change-in-the-vat-rate\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Information regarding the change in the VAT rate: increase from 19% to 21%\" \/>\n<meta property=\"og:description\" content=\"[vc_row][vc_column][vc_column_text css=”” css_params=””]Starting August 1, 2025, Romania\u2019s standard VAT rate will increase from 19% to 21%, under Law No. 141\/2025, published in the Official Gazette on July 25, 2025. 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