Romania plans reduced VAT rate extension

Sun 21st Sep 2014

The government is planning to role reduced Global VAT News,Romania May Reduce-Rate Food After ‘Successful’ Pilot Initiative,(Sep. 22, 2014). The Romanian Government is being encouraged to expand the reduced rate of value-added tax (VAT) to all basic foodstuffs, after a pilot initiative covering bread and bread-making inputs was reported to have substantially reduced grey market activity. An organization representing bakers in Romania reported that sales subject to tax had increased by 20 percent following the introduction of the reduced rate of 9 percent on bread. Previously, the nation’s headline 24 percent rate – the highest in the European Union – had applied. Proposals to lower VAT on food were first put forward in January 2013 by Daniel Constantin, Romania’s Minister of Agriculture and Rural Development, who said that some 70 percent of bread sales illegitimately bypassed the VAT net. Commenting on the latest figures, Constantin said that the compliance rates suggest that the pilot has been a success and should be extended to other foodstuffs. Romanian VAT to all basic foodstuffs after the success of a trial on key supplies recently.

The current Global VAT News,Romania May Reduce-Rate Food After ‘Successful’ Pilot Initiative,(Sep. 22, 2014). The Romanian Government is being encouraged to expand the reduced rate of value-added tax (VAT) to all basic foodstuffs, after a pilot initiative covering bread and bread-making inputs was reported to have substantially reduced grey market activity. An organization representing bakers in Romania reported that sales subject to tax had increased by 20 percent following the introduction of the reduced rate of 9 percent on bread. Previously, the nation’s headline 24 percent rate – the highest in the European Union – had applied. Proposals to lower VAT on food were first put forward in January 2013 by Daniel Constantin, Romania’s Minister of Agriculture and Rural Development, who said that some 70 percent of bread sales illegitimately bypassed the VAT net. Commenting on the latest figures, Constantin said that the compliance rates suggest that the pilot has been a success and should be extended to other foodstuffs.”>Romanian reduced VAT rate is 24%% on most foodstuffs.  Bread was reduced from the standard Romanian 24% to 9% reduced VAT in September 2013.  This appears to help reduce the amount of undisclosed sales of bread for VAT reporting purposes, and therefore encouraged the government to consider extending the reduction to most other basic foodstuffs.

There had been hopes that Romania May Reduce-Rate Food After ‘Successful’ Pilot Initiative,(Sep. 22, 2014) The Romanian Government is being encouraged to expand the reduced rate of value-added tax (VAT) to all basic foodstuffs, after a pilot initiative covering bread and bread-making inputs was reported to have substantially reduced grey market activity. An organization representing bakers in Romania reported that sales subject to tax had increased by 20 percent following the introduction of the reduced rate of 9 percent on bread. Previously, the nation’s headline 24 percent rate – the highest in the European Union – had applied. Proposals to lower VAT on food were first put forward in January 2013 by Daniel Constantin, Romania’s Minister of Agriculture and Rural Development, who said that some 70 percent of bread sales illegitimately bypassed the VAT net. Commenting on the latest figures, Constantin said that the compliance rates suggest that the pilot has been a success and should be extended to other foodstuffs.”>Romania would reduce its 24% VAT rate, but this has been postponed.