Romania plans to phase out special VAT rates, except for items such as food and medications.
Romania has announced significant changes to its Value-Added Tax (VAT) rates, effective from August 2025. The changes, part of a fiscal policy compromise aimed at increasing state revenues, will see the standard VAT rate rise from 19% to 21%, while a unified reduced rate of 11% will replace the previous rates of 5% and 9% for various goods and services [1][2][5].
Under the new VAT structure, food and medicines will fall under the 11% reduced rate, except for alcoholic drinks and certain sugary products which will remain at the standard rate of 21% [1][2][5]. The current 5% and 9% VAT rates applied to various goods and services will be increased, but the exact new rates have not yet been specified [1][2][5].
The key legislation establishing these changes is Law No. 141/2025, published on 25 July 2025 [1][2][5]. However, it remains unclear which of the discussed fiscal measures, including increased excise duties on tobacco products, new taxes on gambling and other vices, and institutional expenditure cuts, will be included in the final fiscal package [1][2][5].
An evaluation in October will determine whether the fiscal impact of the new VAT structure and other planned measures is sufficient [1][2][5]. If the fiscal impact is not sufficient, the standard VAT rate could be raised from 21% to 24% starting January 1 [1][2][5]. The final decision on lifting the standard VAT rate depends on the October 15 evaluation of the fiscal consolidation plan [1][2][5].
It is worth noting that from August 2021 until before these 2025 changes, the VAT rates were: - Standard rate: 19% - Reduced rates: mainly 5% and 9%, with 5% usually applied to certain food products, medicines, and social housing [1][2][5].
However, there are no indications of planned VAT rate changes for food and medicines specifically from August 2021 onwards until the confirmed changes implemented on 1 August 2025 [1][2][5]. The major update was the consolidation and increase starting in 2025 [1][2][5].
The plan aims to avoid immediate headline tax hikes ahead of the October 15 deadline set by the European Commission [1][2][5]. The agreement leaves open the possibility of further increases [1][2][5].
| VAT Category | VAT Rate Before August 2025 | VAT Rate From 1 August 2025 | |-------------------|-----------------------------|-------------------------------------| | Standard rate | 19% | 21% | | Reduced rates | 5% and 9% (different items) | Unified reduced rate of 11% | | Food and medicines | Usually 5% or 9% | 11% (except alcoholic and high-sugar items remain at 21%)|
[1] https://www.gov.ro/ro/legislatie/lege-141-2025-privind-modificarea-si-completarea-legii-227-2015-privind-impozitul-valorii-adaugate [2] https://www.tax-news.com/News/Romania-announces-VAT-rate-changes-for-2025/55760 [5] https://www.europarl.europa.eu/regions/ro/news/romania-announces-vat-rate-changes-for-2025_ro
- The fiscal policy compromise in Romania, which aims to increase state revenues, includes changes to the Value-Added Tax (VAT) rates, touching upon various aspects of finance, business, politics, and general-news.
- As part of this new VAT structure, food and medicines will fall under a reduced rate of 11%, while alcoholic drinks and certain sugary products will remain at the standard rate of 21%, affecting the pricing of goods in the food and beverage industry.
