For most entrepreneurs, the bookkeeping, the management, employment services and paying taxes in Romania represent an unpleasant obligation and a waste of time. For our experienced team this is the field in which they can excel in supporting partners to develop without care regarding bureaucracy, statements and fines. We offer customized services and advice for the main taxes which must be paid in Romania. Our Romanian accountants are at your disposal for tax compliance for your company. They can also help you with audits in Romania, so feel free to address your inquiries to our team.
The social security contributions which are paid by both employers and employees in Romania are:
The VAT tax in Romania is charged to taxable bodies registered for VAT purposes according to art.153 from the Tax Code. The standard VAT rate is 19%. The 9% reduced VAT rate is provided by the Tax Code for certain services and/or supplies of goods, including all kinds of bread and bakery products and different varieties of wheat. The reduced rate of 5% applies to the tax base for the delivery of housing as part of social policy, including the land on which they are built. VAT exemptions are provided in the Fiscal Code.
The Income tax is payable by Romanian legal entities and permanent establishments in amount of 16%. The same percent of the income tax is also applied to foreign legal entities that run their business in Romania.
The tax on dividends distributed by Romanian legal persons is set at 5% rate, applied on gross dividend. It is important to know that the distribution of dividends can be made in kind or cash to the owners of the company, on a quarterly basis, once the temporary financial statements are prepared and approved at the general meeting of company stockholders. There are also tax exemptions when it comes to dividends. For example, the distribution of bonuses in the amount to the share of each contributor is not subject to the dividend tax. The same thing is available for the distribution of dividends made in cash or kind in the case of share capital reduction, as established by the company owners and contributors. If you would like to know more about the dividend tax in Romania and the ways it applies, do not hesitate to talk to one of our Romanian accountants. You can decide on the service of our accounting firm in Romania if you would like to externalize such services for your firm.
The local taxes are paid in Romania by foreign entities under the provisions of the Law no. 571/2003 regarding the Fiscal Code, in amount 4000 euros per year, paid in RON (the national currency).
The unemployment insurance contribution in Romania payable by the natural and legal persons who act as employers and employer related entities that have the capacity of paying the income from dependent activities and any payment of wage income or treated as wages, in amount of 0.5%.
The Micro-enterprise income tax in amount of 3% is a tax payable by any Romanian legal person which is categorized as a micro-enterprise. The indirect taxes paid in a developing country like Romania exceed the amount of direct taxes in the total tax revenues of the state.The indirect taxes are imposed by the state on sales of goods and services. The shares used to calculate these taxes are not differentiated by income, property or personal circumstances of those who buy goods or services.
The customs duties must also be paid in accordance to the commercial policy measures established by Community acts aat a national level and applied to the import and export of certain categories of goods. It is good to know that trade policies in Romania include quantitative restrictions and bans trade foreign policy (embargoes and sanctions). In general, the taxes and contributions may be paid in Romania by using the bank services offered by the bank institution where the taxpayer has opened an account.
Having a company in Romania means, among many important things, observing the tax compliance and registration. It is an obligation for companies that have an annual threshold or 300.000 lei to register for VAT in Romania, as stated by the Fiscal Code of this country. We mention that our team of consultants specialized in accounting matters can provide complete support and guidance for VAT registration in Romania, one of the most important taxes which need to be paid. As for the needed documents for VAT registration, we mention the affidavit showing that your business develops the activities at the main office or a secondary place, if it is the case, the form 010 for juridical persons and their statements, the Certificate of Incorporation of the company, a recent trial balance that shows the amount of 300.000 threshold has been surpassed, plus the power of attorney that will help us register your company for VAT purposes. We also remind you that all documents copies must be notarized at a public notary before submission.
Au audit in Romania is performed in complete agreement with the International Financial Reporting Standards (IFRS) and with the International Standards of Auditing (ISA). This is the legal method through which all the financial information of a company is examined and verified through a professional investigation offered by a specialized auditor. The current status of a company in Romania can be verified with a financial audit, in order to see if the entire financial situation is correctly registered. Besides that, an audit can reveal any possible errors of problems in matters of financial documents and related aspects. A final report is then offered to company owners and managers by auditors engaged in the process. We remind that our team of accountants in Romania can be hired for audit services for your company in Romania.
Paying fewer taxes in Romania is for sure in the attention of company owners at a certain point. There are varied tax minimization tools that can be adopted in your company, depending on the needs of the firm. For example, you can think of charitable donations that are not subject to taxation or you can pay the credits in advance and benefit from varied tax deductions. An advantageous tax structure is applied to holding companies in Romania that do not need to pay income tax for dividends and capital gains.
Romania is quite attractive to foreign entrepreneurs from an investment point of view. Numerous large companies from abroad have subsidiaries and branches in Romania, taking advantage of a beneficial tax structure where the corporate income tax is set at a 16% rate, one of the lowest in Europe. The following facts and numbers can reveal in large lines the business and economic direction of Romania:
For more details about the taxes in Romania and a customized offer, please contact us.