On October 4, the Government decided by ordinance to eliminate the royalty rate for geothermal water and natural mineral water used for public consumption in spa resorts. The measure will be applied starting November 1, 2018.
Until now, the royalty rate for geothermal water and natural mineral water was 5% of the production value, paid upon the conclusion of the license or the issuance of the exploitation permit.
At the same time, in this meeting, the Government decided that the tourism sector will benefit from the lowest VAT rate among all economic sectors, namely 5% for both accommodation and restaurant services, as well as for the rental of land prepared for camping, a facility that will be applied from November 1.
Currently, the VAT for accommodation is 9%.
According to the normative act approved by the Government, starting from November 1, 2018, the application of the reduced VAT rate of 5% will be extended to the following operations:
– accommodation within the hotel sector or sectors with a similar function, including the rental of land prepared for camping;
– restaurant and catering services, with the exception of alcoholic beverages other than beer
– the right to use sports facilities for the purpose of practicing sports and physical education, other than those already exempt
– services consisting of allowing access to amusement parks and recreational parks.
Currently, the reduced VAT rate of 5% is applied for the delivery of housing and for books, school textbooks, newspapers, magazines, access to museums, monuments, etc., and the VAT rate of 9% is applied for bread and bakery products, water for irrigation and drinking water, and fertilizers and services in agriculture.
Source: Profit
Frequently Asked Questions
When does the 5% VAT rate for tourism take effect?
The reduced 5% VAT rate for the tourism sector in Romania applies starting from November 1, 2018.
Which services are included in the 5% VAT reduction?
The reduction applies to hotel accommodation, restaurant and catering services (excluding most alcoholic beverages), camping site rentals, sports facilities, and amusement parks.
What happened to royalties for mineral water in spa resorts?
The Government eliminated the royalty rate for geothermal and natural mineral water used for public consumption in spa resorts, effective November 1, 2018.