Corporate tax in Romania

The state of Romania is a great country for entrepreneurship. Before launching the establishment every businessman has to be informed about all peculiarities of trade activity in the country. One of the most consequential topics is the taxation of companies.

The corporation tax rate is 16% in Romania

It is evaluated as the variance between all sources of proceeds and the spending suffered to produce that income. The resultant sum has the taxable income withheld from it, and the deduction costs are applied on top of that.

Who has to pay the Romanian corporation tax?

• Native enterprises that do business via one or more standing facilities in Romania with an exception for particular institutions and taxpayers that are explicitly designated in the Fiscal Code;
• Nonnative firms have their headquarters or main offices there;
• Nonnative juridical persons that profit from the sale of property or the exercise of any other rights;
• Relating to property in Romania that is immovable;
• Corporations that have been created under European law and that have main offices in Romania.

The minimal company tax, which depends on the company’s total profit, is

• 2,200 RON for revenue under 52,000 RON.
• 4,300 RON for revenue between 52,001 and 215,000 RON.
• 6,500 RON for revenue between 215,001 and 430,000 RON.
• 8,600 RON for revenue between 430,001 and 4,300,000 RON.
• 11,000 RON for revenue between 430,000,001 and 21,500,000 RON.
• 43,000 RON for revenue above 129,000,001.

1 EUR = 4.843 RON (September 7, 2022)

Microenterprise tax

Juridical individuals maintaining a turnover of less than €1,000,000 have a

• 1% reduced tax rate for businesses with at least one worker;
• 3% for enterprises with no workers.

It is important that the company’s founders do not belong to any state or local communities.

On Romanian territory, the firm doesn’t engage in any operations that require a license.

The government of Romania stated that the sum would be decreased from €1,000,000 to €500,000 and that adherence to the microenterprise incentives will need at least one person.

Besides, this is crucial to be eligible for preferential treatment. Your company must not engage in the operations that connected with banking, insurance, oil refining or gaming, or providing financial and reinsurance services.

Advance Corporation Tax (ACT)

It is necessary to pay corporation tax each year for every firm in Romania. Besides, taxpayers have an option to change the frequency of payments and pay instalments one time in three months by notifying the special authorities of their plan. Also, some Romanian payers of taxes have the chance to pay the usual corporate income tax in advance. After the consumer-price index is adjusted, this could alternatively be figured as an expected quarterly fee at a frequency equivalent to one-fourth of the prior yearly company levy. Applications for advanced tax fees must be submitted by businesses with departments in Romania.

Tax benefits for enterprises in Romania

Entities that are assembled without the principal intention of making a profit and associations that have farming, instructional or devotional purposes are exempt from corporation income tax. Enterprises that are engaged in studies and research in Romania and carry out initiatives that support ideas developed in the EU are entitled to a 50% reduction of the permitted costs.

Double-taxation agreements in Romania

Romanian authorities entered into DTAs with other nations to prevent the double-taxation payments. This implies that businesses having Romanian locations have to pay taxes on the profit earned there.

VAT in Romania

• The general VAT rate is 19%;
• under specific circumstances, it is 5% for supplies of social housing;
• 9% for services related to the ensuring of water, food, beverages, medical care, and publications and textbooks.

In Romania, clearance for VAT requires a floor rate of turnover of €88,500 yearly.

The company, if it is over the threshold for VAT registration, owes to charge VAT on any down payments it received before registering for VAT-related reasons for goods supplied or services rendered after the registration date.

The fiscal term is typically the calendar month. The fiscal term is the calendar quarter for VAT-registered taxable individuals whose prior year-end turnover did not exceed €100,000. Also, if the taxpayer makes intra-community purchases, the fiscal period will move to the current month.

To calculate their VAT obligations, individuals who are taxed are required to keep thorough records.

Thus, many foreign investors who wish to make funding in this region of the EU find the state of Romania to be very attractive. Any entrepreneurs from other nations eager to set up a firm in Romania may gain an edge from the plentiful supply of competent workers that are available on the market.

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