July 3, 2025
Romania plans 21% standard VAT rate and 11% reduced rate from 1 August 2025 – What businesses must do now
Key take-aways
- New VAT rates: The Romanian Prime Minister has reintroduced legislation raising the standard VAT rate from 19% to 21% and replacing the existing 5% and 9% VAT rates by a new reduced rate of 11% with effect from 1 August 2025 (supply date driven).
- Scope: The higher rates apply to all supplies currently taxed at the standard rate or reduced rates, including imports and cross-border B2C services.
- Alignment with other reforms: The change coincides with mandatory B2C e-invoicing and the roll-out of SAF-T for small and non-resident taxpayers from January 2025.
What changes—and when
| Timeline | Milestone | Practical impact |
| 1 Jan 2025 | Mandatory B2C e-invoicing & SAF-T phase-in | System upgrades and data extraction already required—rate change must be built into the same project plan. |
| 2 Jul 2025 | Official announcement | Businesses need to start preparing for the new VAT rates |
| 1 Aug 2025 | 21% and 11% VAT rates become effective | ERP/tax engines must apply 21% to supplies with a supply date on/after 1 Aug 2025—even if the invoice is dated earlier/later. |
Impact analysis
For businesses issuing Romanian VAT invoices
- ERP & tax engine updates – Add new 21% and 11% codes, map correct GL accounts, test cut-off logic.
- Cut-off rules – Automate supply-date checks to prevent old-rate application to post-1 Aug 2025 supplies.
- Contract & pricing review – Re-price gross B2C contracts or amend net-price clauses in B2B contracts where VAT is seller’s cost.
- Master data clean-up – Align customer tax categories, especially for distance-selling and OSS reporting.
- Governance – Ensure Account Receivables and Order to Cash (O2C) are aware of the incoming VAT rate change.
- External communication – Align with key customers and/or wider base to ensure a smooth transition with the new VAT rate, reduce potential invoice rejection and communicate chosen pricing strategy.
For businesses receiving Romanian VAT invoices
- Invoice validation – Update three-way match rules to accept 21% and 11% for supplies dated 1 Aug 2025 or later.
- Input VAT deduction timing – Ensure AP teams recognise the correct tax point to avoid under- or over-claiming.
- Budgeting & cash-flow – Factor in the increased VAT rate when modelling Romanian cost bases for H2 2025.
- Governance – Ensure Account Payables (AP) & Procure to Pay (P2P) are aware of the incoming VAT rate change.
- External communication – Align with key suppliers and/or wider base to reduce potential invoice rejection and de-risk vendor relationship potential challenges.
Beyond the headline rate
| Area | Why it matters | Action |
| E-Invoicing | B2C invoices must be issued via the RO e-Factura platform from 1 Jan 2025. | Ensure e-Factura integration supports the 21% rate code. |
| SAF-T | First SAF-T returns for small/non-resident businesses due in July 2025 (June period). | Map the new VAT code to the correct SAF-T boxes. |
| Pricing strategy | Consumer sensitivity to price increases is high. | Decide whether to absorb, partially pass on, or fully pass on the VAT rate increases. |
| Systems testing | Dual-rate period risk between approval and go-live. | Run parallel invoicing tests covering Jul/Aug supplies. |
| Technology Vendors | Ensure appropriate system updates are being passed through to 3rd party systems such ERP, Tax engine and VAT return platforms. | Contact vendors to understand rate change plan and align with internal IT team if needed to de-risk potential gap in tax rate accuracy being applied. |
A&M viewpoint
The VAT rate rise may look modest for most products and services, but the combination of rate change, e-invoicing, and SAF-T makes 2025 the most complex VAT year in Romania since 2016. Early alignment across IT, Tax, Finance, Sales, and Procurement is essential to avoid pricing errors, non-compliant invoices, and blocked input VAT.
Need help? Our Indirect Tax and Technology teams can run a “VAT-21 readiness review” in two weeks, delivering a gap analysis, implementation roadmap, and testing script.
