The National Association of Travel Agencies ANAT wants the reduced VAT rate to be expanded to half-board and full board accommodation, claiming this measure will lead to an increase in the number of both Romanian and foreign tourists. It will also increase the consumption of travel services and the tourism’s share within the GDP.

Currently, the 9 percent VAT rate only applies for accommodation services and accommodation with breakfast included. The rest of the tourism services, including those of travel agencies selling tourist products in Romania, are taxed at a full rate of 24 percent.

"The VAT rate of 24 percent is higher than the level applied in most EU countries and puts the industry in a situation of non-competitiveness compared to the other countries it competes with on the tourism market. Bulgaria applies a rate of 9 percent since April 2011 for holidays purchased via travel agencies (over 102,000 Romanians went to Bulgaria via travel agencies in 2013), Greece reduced the VAT for restaurants at 13 percent during the economic crisis (some 100,000 Romanians left via travel agencies), Spain has a rate of 10 percent for both accommodation and restaurant services," said Lucia Morariu, president of ANAT. 

Other countries that apply a lower VAT rate for tourism services are Cyprus, Italy, France, Austria, Malta, Germany and Croatia. These countries attract  thousands of Romanian tourists annually.

Irina Popescu, irina.popescu@romania-insider.com