PM Viorica Dancila announces lowered 5 percent VAT for Tourism companies

Prime Minister Viorica Dancila announced at the beginning of the Government meeting that the Executive will extend the 5 percent reduced VAT rate for accommodation, restaurant services and amusement parks.

”The number of tourists accommodated in August 2018 was almost 10 percent higher compared to the same period in 2017. Today we are making an important decision to support this sector: reducing the VAT rate to 5 percent for accommodation, restaurants and catering, but also for the use of sports facilities, amusement parks and recreation parks. Romania will have the lowest VAT rate applied in tourism in the EU, and experience from previous years proves that lowering VAT has positive effects on the economy”, Prime Minister Viorica Dancila stated.

Tourism will thus have the smallest share of VAT in all economic sectors.

In line with the government’s Action Plan for September-December 2018, the Tourism Ministry has set out more measures to improve the tourism sector in Romania, including the application of the 5 percent VAT rate for areas such as accommodation in the hotel sector or similar-function sectors, including rental of camping grounds, restaurant and catering services, except for alcoholic beverages other than beer, sporting, recreational and entertaining activities.

On September 29, Viorica Dancila asked Finance minister Eugen Teodorovici to draft a normative act that would, among other things, extend the application of the 5 percent reduced VAT rate to hotel accommodation, including camping.

The reduced VAT rate of 5 percent will be extended to hotel accommodation, including camping; restaurant and catering services, excluding alcoholic beverages other than beer; the use of sports facilities, access to amusement parks and recreational parks.