Reduced VAT rates of 9% and 5% remain unmodified

The reduced VAT rates of 9% and 5% have remained unmodified, with the Government only deciding a five per cent rise of the standard 19% value added tax rate.

“The standard rate is 24% and applies to the tax base on taxable operations not exempt from the tax or which are not included in the lower-tax categories,” mentions the emergency ordinance published yesterday in the Official Gazette, which also includes other measures whereby the state seeks to collect higher revenues to the budget.

The lower 9% rate applies for human and veterinary drugs, orthopaedic products and prostheses, dental ones excepted. The low VAT also applies to schoolbooks, books, newspapers and magazines. The 9% rate is levied on services allowing access to castles, museums, historical monuments, botanical gardens, fairs, exhibitions, cinemas, hotel accommodation, as well.

At the end of December 2008 the authorities decided to levy a lower, 5% VAT on new homes, in order to support the real estate sector.

The 5% VAT is levied on delivering homes with a usable area of 120 square metres at the most, home annexes excluded, whose value (the plot of land included), does not exceed 380,000 RON, VAT excluded.