The fiscal relationship between a body and the Romanian State determines the responsibility of legal persons (and individuals) to legal payment obligations for the state budget in a certain amount and period of time and, in this sense. Our Romanian accountants can help you drive your company throughout the corporate tax compliance in Romania. The tax responsibility is a legal obligation as it defines the contents of a legal relationship that arises between the state and those which are taxpayers according to law. Failure to comply in part or in full results in penalties, fines, and other coercive measures.
There are several taxes and contributions payable by each company incorporated in Romania. Branches or subsidiaries of foreign companies that operate on Romanian territory will also have to comply with the tax laws and the requirements for accounting and auditing. The most important taxes for companies in Romania include:
There is no stamp duty tax and there are no transfer taxes. Employers in Romania must also pay social security: 15.8% of the gross salary for normal working conditions, a health fund contribution of 10%, an unemployment contribution of 0.5% and other contributions.
Depending on the business field in which they operate, investors may have to pay additional taxes to run their business (like energy taxes or some for the pharmaceutical industry).
The expenses linked to business activities of a company in Romania are considered deductible costs. It is good to know that there are cases stipulated by the law where the expenses are non-deductible.
Starting with January 2018, there is no tax imposed on the income derived from the allocated dividends of a company. Also, there are no taxes for the reinvested profits in a company in Romania, particularly for the technological equipment. Please feel free to get in touch with our team of accountants in Romania if you want to know more about the taxation system or if you need audits in Romania. We are at your disposal with complete accounting services, regardless of the chosen business form.
The tax year is generally the same as the calendar year. However, companies are allowed to opt for a different fiscal year if it corresponds to their financial accounting year. The corporate income tax is payable on a quarterly basis and payments must be made until the 25th day of the month following the month when the quarter ends. Advanced payments on a quarterly basis are also possible. Failure to comply with the filing requirements results in penalties: late payment is taxed at 0.03% for each day of delay.
In order to avoid double taxation, Romania has signed an important number of double tax avoidance treaties with other countries worldwide.
Having a strategic geographic location and a reputable business environment with a series of incentives offered by the government, Romania welcomes foreign direct investments in most areas of interest. Foreigners can find interesting business conditions in sectors like agriculture, tourism, banking, IT and many more. Romania is at the moment registered with a fast development of the economy among the European states. Also, the bureaucracy decreased significantly in the business sector in Romania, allowing foreigners to easily set up their companies in this country.
For a complete and customized advice in accordance to your businesses’ economic and fiscal indicators and for audit services in Romania please contact our Romanian Accountants.