\n\tLast night the Senate decided to bring VAT back to 19%, modifying the government's decision less than 2 months ago. This is a proposal that has to be approved by the Parliament. Despite my strong desire to comment upon the news, I will not do it. This is how Romanian politicians understand their duty to their voters and the society and I will let Romanian citizens to comment. (Plus I always prefer to stay out of political disputes).\n<\/p>\n
\n\tBut this news creates new problems in the Real Estate market plus it damages the economic environment furthermore. Let me share with you 4questions – problems that we will face during the following weeks and months…\n<\/p>\n
\n\t1. What should I say to my clients? Which are the taxes in Romania?<\/strong> \n\t2. What will happen with the higher taxes that people paid during the last 2 months?<\/strong> \n\t3. Potential problems in some contracts. Is there any hidden trouble?<\/strong> \n\t4. "What's gonna happen tomorrow?"<\/strong> \n\tUnfortunately the problems here need urgent (and serious) solutions. With all these "back and front" moves, the only thing that Romania succeeds is to harm the country's overview. And it is the only country in the world which dares to give this overview, during the worst economic crisis since decades.\n<\/p>\n \n\tVery soon, during the autumn, the country will be forced to undertake more painful measures. And after last night's decision, IMF and other foreign organizations will continuously doubt for Romania's determination to solve its problems. I hope that all these will not become as bad as they seem…\n<\/p>\n \n\tJust 2 weeks ago I was writing:<\/strong>\n<\/p>\n
\n\tIt is simple and clear: Every foreigner who wants to invest in a new country asks about the taxes. What should I tell to my clients when they ask me? Every week we hear news about changes. "The VAT will go up, the profit tax will go down" or vice versa. VAT increased, VAT decreased, pensions were cut, pensions were not cut. Is there anyone out there who realizes that this uncertainty simply makes people halt, waiting for the final situation to be clear (if not turning back their back to the country)?\n<\/p>\n
\n\tI can not say that this summer was full of transactions, but there were some. Plenty of them belonged to the category of properties whose transaction includes the VAT payment, so some hundreds of people paid a higher VAT, 24% instead of 19%. So, if VAT returns to 19%, what will happen with these investors (or tenants of buildings)? They will just be informed that they were stupid and lost their money? Or "one day they will receive their money back from the State"?\n<\/p>\n
\n\tI personally know cases where the rental contracts are written in a way which describes the obligation of the tenant to pay the rent plus the VAT, considering (the contract) that the VAT will remain the same or will increase. Now if the VAT will finally return to 19%, there can be problems of "translation", if the lawyers have not made a good work. (yeah, I know… they are usually perfect, but sometimes it may happen…)\n<\/p>\n
\n\tI don't know if you realize it, but when foreigners talk about Romania, they don't separate politicians. Like how you talk about Greece, you don't say "the good ones or bad ones". So right now Romania appears to be a country which "tries to take back" an important measure and changed its mind for this. This country appears to have implemented this measure (VAT increase) in order to receive the loan installment by the International Monetary Fund and now it tries to redraw it, like "tricking" IMF. But in the following weeks and months the country will need more money, as the revenues are not so good. What will happen then? It will also take measures and cancel them after 1 – 2 months?\n<\/p>\n