Moldova slashes HORECA VAT: 8% boost for tourism
The conclusion of Moldova's nationwide state of emergency brings welcome relief for the hospitality and tourism sector (HORECA) in the form of a significantly reduced VAT rate.
Effective today, businesses offering accommodation, food, and beverages will operate under an 8% VAT regime, down from the previously standard 12%.
"This revised rate signifies a reduction in consumer costs and enhanced competitiveness for our businesses," declared the State Tax Service in an official statement. "It aims to bolster the HORECA sector's post-pandemic recovery and contribute to its long-term resilience."
The 8% VAT applies across all accommodation categories, encompassing hotels, villas, guesthouses, campsites, and vacation camps as defined in Section I of the Moldovan Economic Activities Classifier. Notably, the production of alcoholic beverages with associated immediate consumption services remains subject to the standard 20% VAT rate.
Businesses are required to update their cash register and control equipment to reflect the new 8% VAT rate. Until the equipment is programmed, recalculated VAT amounts must be recorded manually.
The reduced VAT rate for HORECA was initially introduced in August 2023 under Law No. 212/2023 as a temporary measure during the state of emergency. Its extension until December 30th provided temporary relief, but uncertainty shrouded its continuation beyond that date.
"The confirmation of the 8% VAT rate for HORECA is a resounding victory for both entrepreneurs and employees," remarked Ion Chicu, president of the National Hotel and Restaurant Association. "This tax relief offers crucial stability and fosters further investment in the industry."
The government's decision underscores its commitment to supporting sectors disproportionately impacted by the state of emergency. With the tourism industry playing a vital role in Moldova's GDP, this tax cut holds potential to attract more tourists and generate fresh job opportunities in the coming year.
Translation by Iurie Tataru
