Romanian Senate Rejects Zero-Rate on Social Housing

Charles Riordan
June 24, 2017

The Romanian Senate has significantly amended a bill proposed by the ruling Social Democratic Party, which was designed to reduce VAT on social housing and agriculture. The bill originally proposed a zero-rate on the construction of buildings used for social purposes, such as housing for the elderly, orphanages, and rehabilitation centers. The Senate’s Budget and Finance Committee, however, eliminated this provision on the grounds that it violated Council Directive 2006/112/EC (“the EU VAT Directive”). Instead, the bill passed by the Senate contains only a reduced 5% rate on agricultural products. The elimination of the social housing provision comes at a time when the Social Democratic Party itself is in turmoil, having recently ousted its own Prime Minister, Sorin Grindeanu. The amended bill now passes to the Chamber of Deputies for final approval.

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Charles Riordan

Charles Riordan is a member of the Regulatory Analysis team at Sovos specializing in international taxation, with a focus on Value Added Tax systems in the European Union. Charles received his J.D. from Boston College Law School in 2013 and is an active member of the Massachusetts Bar.
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