VAT Updates August 2025: Romania Implements Major VAT Rate Changes

Romania will implement a significant overhaul of its VAT system on August 1, 2025, increasing the standard VAT rate from 19% to 21%. At the same time, the current dual reduced rates of 5% and 9% will be consolidated into a single reduced rate of 11%. This new reduced rate will apply to a broad range of goods and services, including food and non-alcoholic beverages, medicines, water supply and sanitation, books, publications, hotel accommodation, and restaurant and catering services.

The changes form part of a wider fiscal reform package, signed into law in July 2025 and published in the Official Gazette. The government aims to simplify the VAT structure while boosting revenue to address budgetary pressures.

Businesses operating in Romania will need to act quickly to ensure compliance. This includes updating billing and accounting systems, revising contracts that reference VAT rates, adjusting pricing structures, and clearly communicating new VAT-inclusive prices to customers. Advance planning will help minimise disruptions when the new rates take effect.