Under changes to Romanian VAT law, as of 13th January 2019 tourist transportation services are subject to the reduced 5% rate of VAT.
Recently published legislation provides that the scope of the 5% reduced rate has been extended to cover the following passenger transport services used for tourism or leisure purposes:
- Trains or certain historic steam-powered vehicles;
- Cable-cars, chair/ski-lifts or similar;
- Animal-powered vehicles; and
Building on changes reported in our story from last year, this measure is in line with the Romanian government’s policy aiming to ignite its local tourism sector. Last year saw the 5% rate being applied to various tourism services such as hotel accommodation, restaurant and catering services and entertainment.
Before 13th January 2019, tourist transport services were generally subject to Romanian VAT at the 19% standard rate.
A number of Member States, including Ireland and Austria, allow for reduced rates of VAT within the tourism sector. This is to achieve the result that the Romanian government is aiming for, which is increased visitor numbers and hence spend in that country which will help the overall economy.