Government to apply differential VAT quotas

Adrian Nastase-led Government intends to levy differential VAT quotas beginning with the second half of this year or starting next year.

The decision will be made depending on budgetary revenues, Florin Georgescu, chairman of the Budget-Finances Panel within the Chamber of Deputies, said yesterday.

During the commission’s meeting, Georgescu analysed a survey on the VAT quotas in other countries, pointing out that VAT is differential there.

According to the survey, VAT in the Czech Republic ranges between 22% and 5%, in Slovakia the VAT quota varies between 23% and 6%, while in Austria these levels are between 20%, 10% and 12%. The VAT quota is between 21% and 0% in Belgium. In Italy, the VAT quotas are 19%, 4%, 10% and 16%.

The Budget-Finances Commission within the Chamber of Deputies yesterday endorsed Ordinance 17/2000 on VAT, whose quota will be 19% for the delivery of movable assets and the transfer of fixed assets across the country, services and several kinds of goods imports.

The 0 VAT quota applies to goods exports, shipment and services related to goods exports. The same VAT quota applies to international transport of people to and from abroad.

Goods and services directly aimed at diplomatic missions, consulate offices and international inter-governmental offices accredited in Romania benefit from 0 VAT quota, under the conditions stipulated by the Finance Ministry decision.

House building or extending, consolidation and rehabilitation of the already built houses and church building benefit from the same VAT quota.

The Senate endorsed the ordinance during its March 1 session. Finance minister Mihai Tanasescu pledged to apply differential VAT quotas before Nastase-led Government began its mandate, during his hearing at the Budget-Finances Panel.