Romania: New law repeals VAT exemption for NGOs, increases VAT and dividend tax rates, introduces supplementary tax on banks
Law effective August 1, 2025
The Romanian government on July 25, 2025, published Law No. 141, repealing the value added tax (VAT) exemption for non-governmental organizations (NGOs) effective August 1, 2025. The law establishes a deadline of October 31, 2025, for filing VAT reimbursement requests for deliveries before August 1, 2025. Refunded amounts must be used for non-profit purposes, and NGOs must meet qualifying criteria for prior exemptions, or repay the VAT reimbursed.
Law No. 141 also increased the standard VAT rate to 21%, and the reduced rate to 11%, effective August 1, 2025. The standard rate applies to transactions previously taxed at 19% and certain supplies previously at 9%, while the reduced rate applies to supplies previously taxed at 5% and some at 9%. Transitory provisions allow a 9% rate for specific dwellings until July 31, 2026.
Finally, Law No. 141 introduced a 2% or 4% supplementary tax on banks based on market share, expanded the individual (personal) income tax base, narrowed health contribution exemptions, and increased the dividend tax rate to 16% from January 1, 2026.
For more information, contact a KPMG tax professional in Romania:
Vlad Craciun | vcraciun@kpmg.com
Alin Negrescu | vnegrescu@kpmg.com