Romania: Global Indirect Tax News Updates - Romanya

8 July 2005

Update
With effect from 23 June 2005, in order to further align Romanian law with EU law:

·                       the exemption for drugs, publications and broadcasts was abolished; and

·                       various excise duties including those on alcohol, tobacco, petrol and natural gas & electricity were increased.

Other recent changes, with effect from 4 June 2005, were:

·                       cinema tickets are now subject to a reduced VAT rate of 9%; and

·                       certain electronic products eg cameras are now exempt from excise duty.

27 May 2005

Accession to EU
Bulgaria and Romania signed the Accession Treaty to the European Union on 25 April and  will become members of the EU on 1 January 2007.  In the meantime they are required to bring their laws, including indirect tax laws, into line with EU rules and regulations or their entry date may be delayed.

22 April 2005

Some cultural services lose exemption. Excise rates up
With effect from 1 June 2005, some cultural services (including all those liable to entertainment tax other than where the supplier is a charity or public institution) and certain media and broadcasting rights will lose VAT exemption and become standard rated.   With effect from 1 April 2005, many excise duties were increased, and various exemptions on ethylic alcohol and mineral oils removed.

14 January 2005

VAT rate increase declined
The Prime Minister has rejected the IMF's suggestion to increase the existing 19% VAT to make up for revenue loss.

18 June 2004

System for tourist VAT refunds still not in place
Foreign citizens buying goods in Romania still have no way to reclaim VAT on their purchases when departing, as EU standard legislation and methodology are not yet in place.

6 February 2004

Hopes for Reduced VAT on Tourism Services
The Transport and Tourism Minister, Miron Mitrea, has discussed with EU officials a proposal to reduce VAT on tourism services from 19% to 9% next year.

19 September 2003

Plans to introduce reduced VAT rates
The government stated that the standard VAT rate of 19% will not be decreased before admission to the EU. However, there are plans to introduce a reduced VAT rate of 9% next year for products such as books, tourist accommodation, medicines and prostheses and entrance fees for certain cultural entities.

13 June 2003

Changes to reverse charge procedure
The recipient of services supplied by non-residents which is liable to account for VAT under the reverse charge procedure is no longer required to account for the VAT liability within seven days of receiving the supply. Businesses can now include the VAT payable to the tax authorities on their subsequent VAT return and recover the notional VAT incurred on the same return. Furthermore, where broadcasting or digitised services are supplied by a non-Romanian supplier to a Romanian business, the recipient is liable to account for VAT under the reverse charge procedure.