For most entrepreneurs, the bookkeeping, the management, employment services and paying taxes in Romania represent an unpleasant an obligation these must handle in accordance with the legislation. 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 and information about the taxes in Romania. They can also help you with audits in Romania, so feel free to address your inquiries to our team.
| Quick Facts | |
|---|---|
| Tax system in Romania | Flat tax system for both corporate and personal income |
|
Personal income tax rate |
10% |
|
Corporate income tax rate |
16% |
| Value-added tax (VAT) rate | 21% (standard rate), 11% (reduced rate) applies to specific goods and services. |
| Labor insurance contribution by employers |
2.25% |
| Dividend tax rate |
5% |
| Capital gains taxes in Romania |
10% for individuals, 16% for companies |
| Tax year |
Calendar year |
| Tax return filing deadline |
May 25th following the tax year |
| Tax payment deadline | March 25th, June 25th, September 25th, December 25th |
| Gross minimum wage in 2023 |
RON 3000 |
| Property taxes in Romania |
0.5% – 1.3% on non-residential buildings |
| Tax incentives for research and development |
50% deduction of R&D expenses |
| Tax treaties |
Over 80 double tax treaties signed |
| Tax identification number (TIN) | Assigned by the National Agency for Fiscal Administration (ANAF) |
Table of Contents
Taxes for companies in Romania
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:
- the profit tax: 16% applicable on the Romanian-source profits; a minimum 5% rate can apply for certain business activities;
- the withholding tax on dividends is set at 5% rate, while for interests and royalties, this is set at 10% rate;
- the micro-enterprise income tax (for registered incomes of EUR 1 million);
- the Value Added Tax: with a newly reduced rate of 9% for all foodstuffs and a standard rate of 21% in 2026;
- the real estate property tax: between 0.25%-1.5% of the entry value of the building – a tax levied at a local level for owned buildings and land.
Below you can explore an infographic with details on this topic:
Is there a stamp duty tax imposed?
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.
What are other taxes imposed on companies in Romania?
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).
How are deductions made for companies in Romania?
The expenses linked to the 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. Please talk to our specialists about the taxes in Romania.
Requirements for taxpayers in Romania
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 by 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.
Did Romania sign double tax treaties?
In order to avoid double taxation, Romania has signed a significant number of double tax avoidance treaties with other countries worldwide.
What is the VAT tax rate in Romania?
The VAT in Romania is charged to taxable bodies registered for VAT purposes according to art.153 of the Tax Code. The standard VAT rate is 21%. The Tax Code provides the 11% reduced VAT rate for certain services and/or supplies of goods. Here is a video presentation with details about the main taxes in Romania:
What is the income tax rate in Romania?
The income tax is payable by Romanian legal entities and permanent establishments at a rate of 16%. The same percentage of the income tax is also applied to foreign legal entities operating in Romania. Interested in information about the taxes in Romania? Please talk to our specialists.
What is the dividend tax rate in Romania?
The tax on dividends distributed by Romanian legal persons is set at 16% rate, applied on gross dividends. It is important to know that the distribution of dividends can be made in kind or cash to the owners of the company, every quarter, once the temporary financial statements are prepared and approved at the general meeting of the company’s 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 services of our accounting firm in Romania if you would like to externalize such services for your firm.
Other taxes in Romania
When you need assistance in paying the taxes on salaries in Romania, count on our accountants’ abilities in order to obtain the best results, with no delays in payments or any other issue that may incur when the taxes on salaries are not deposited in accordance with the Romanian rules and regulations. Our accountants in Romania will provide the best payroll services and, implicitly, full advice and representation regarding the taxes on salaries.
Information about the salary in Romania
In order to get more information about the taxes on salaries in Romania, we provide you below a brief description of the payment system, the percentages withheld, and the obligations imputed to both the employer and the employee in Romania. The salary income in Romania is defined as all the income in cash and/or in-kind made to a natural person carrying out an activity under an individual contract or a statute specifically provided by law, regardless of the period covered, the name of revenue or the form in which they are granted, including allowances for temporary disability. The salary income is included in the total amount of income made to a natural person. In this sense, the Law no. 571/2003 on Fiscal Code provides that any Romanian or foreign person who lives in Romania for more than 183 days in a calendar year must pay income tax on income derived from activities performed in Romania or of commercial operations concluded with residents. In 2026, the income of individuals is levied with a flat tax of 10% rate. The income tax must be paid by:
- resident individuals domiciled in Romania for incomes from any source;
- resident individuals without domicile in Romania, only for revenues from Romania, which are taxed at the level of each source of income.
What are the social contributions in Romania?
In Romania, every employee and employer must contribute to the social fund, health fund, unemployment fund, and to the state budget through payroll taxes. The monthly payroll tax is a final tax payable by employees, but the law obliges the employer to perform the computing operations, retention, and payment of the taxes on salaries. In Romania, the income tax is set at a 10% rate, as provided by the Tax Code. The social contribution rates and the amount of other taxes are set each year by the Romanian State Social Insurance Budget Law and the Romanian State Budget Law. In Romania, the mandatory social contribution rates for 2021 are:
For social insurance contribution:
- 31.3% for normal working conditions, of which 10.5 % for individual contribution and 20.8% for the contribution payable by the employer;
- 36.3 % for difficult working conditions, of which 10.5 % for individual contribution and 25.8 % for the contribution payable by the employer;
- 41.3 % for special working conditions, of which 10.5 % for individual contribution and 30.8% for the contribution payable by the employer.
For health insurance:
- 5.5% for individual contribution;
- 5.2% for the contribution payable by the employer;
- 0.85 % for the contribution on holidays and health insurance benefits.
The contribution to the unemployment insurance budget is:
- 0.5 % for individual contribution;
- 0.5 % for the contribution payable by the employer;
- from 0.15 % to 0.85 % for the contribution of insurance for work accidents and occupational diseases, differentiated by risk class, under the law, due to the employer;
- 0.25 % for the contribution to the Guarantee Fund for salary payment, paid by the employer.
Deduction for personal allowances
In Romania, individuals have the right to deduct from their net monthly salary an amount in the form of personal allowances, paid for each month of the reporting period. The personal allowance may be deducted only for the salary income earned at the place of the basic function:
- for taxpayers who have no dependents – 510 lei;
- for taxpayers who have one dependent- 670 lei;
- for taxpayers with two dependents – 830 lei;
- for taxpayers with three dependents – 990 lei;
- for taxpayers who have four or more dependents – 1.310 lei.
For taxpayers who derive a monthly gross income from salary between 1.951 lei and 3.600 lei, the personal deductions are decreasing, as determined by the Romanian Minister of Public Finance. For taxpayers who derive a monthly gross from a salary that exceeds the sum of 3.600 lei, the personal deduction is not granted. Even though the employee is charged with taxes, the entire amount is withheld and paid by the employer.
The only exception is for Romanian citizens or foreigners living in Romania whose salary is paid by a diplomatic mission or from abroad. The employees in this situation must submit by the 25th of each month, the Declaration on incomes from salaries derived by foreign individuals operating in Romania and by Romanian natural persons employed by diplomatic missions and consular posts accredited in Romania – the Form no. 224.
One should note that with an increase of 50 lei in the gross salary, the personal deduction decreases by 15 lei for each category. Therefore, an employee paid the minimum wage in Romania, established at the moment at 2.230 lei, he/she will benefit from one of the following deductions:
- to employees without dependents – 420 lei
- to employees with a dependent – 580 lei
- to employees with 2 dependents – 740 lei
- to employees with 3 dependents -900 lei
- to employees with at least 4 dependents – 1,220 lei
Unemployment facts in Romania
According to the applicable legislation in Romania, one should know that part-time employees with less than four hours per day cannot benefit from unemployment assistance, although the companies are contributing to the unemployment fund. In particular, one must know that the grant of the allowance is unviable because of the length of the contribution period executed by the authorities, which can never be attained by individuals working on a single employment contract of less than 4 hours per day. At the moment, the Romanian government and particularly the Ministry of Labor is trying to figure out an appropriate legislative solution.
We remind that the unemployment benefit is ruled by Law no. 76/2002 on the unemployment insurance structure and the encouragement of employment. Given this significant normative act, in the situation of part-time employees in Romania, the length of the contribution to the unemployment fund is defined by the actual working time, which may, in some cases, lead to the impossibility of gaining the unemployment benefit.
Taxation of branches in Romania
Branches in Romania can set up only the activities of the parent company, meaning that these must operate in the same field. The corporate tax imposed on the profits of a branch is set at 16%. More about the taxation of branches in Romania can be discussed with our Romanian accountants.
Taxation of representative offices in Romania
Any foreign company or legal person can set up a representative office in Romania, respecting the rules of the Romanian Company Act and the Tax Code. In this sense, an annual tax of 18,000 lei needs to be paid, no later than the last day of February. In the case the representative office closes, the amount of tax that needs to be paid will be calculated for the operational months of that representative office. The tax legislation in Romania needs to be fully understood before starting a business, so one of our accountants in Romania can offer assistance in this matter. Talk with us about the taxes in Romania.
Making investments in Romania
Investing in Romania represents a strategic choice because there are many promising business opportunities for local and international entrepreneurs looking to thrive in the Eastern part of Europe. Romania is connected to prosperous markets worldwide and collaborates with international players in terms of foreign direct investments. Nowadays, business and trade in Romania are sustained by developed technology, fewer bureaucracies, and the possibility of starting a company right away, without complications. The labor force plays a major role in Romania, as many international companies decide on local staff with experience in a wide range of fields. Romania is a successful and thriving business destination due to a wide range of investment opportunities already detected by many foreign entrepreneurs. Plus, the tax regime is one of the most favorable in European countries, with a corporate tax set at only 16%. The ease of company registration in Romania is a big advantage for international entrepreneurs looking to prosper in a European country with lots of possibilities. The following facts and figures highlight the business and economic direction in Romania:
- In matters of total FDI stock, Romania registered nearly USD 97 billion in 2019.
- The 2020 Doing Business report ranked Romania 55th out of 190 economies in the world.
- Cyprus, Germany, the Netherlands, Italy, and Austria are among the main investors in Romania.
- Most of the FDIs are absorbed by sectors like manufacturing, real estate, construction, financial services, and insurance.
We invite you to talk to our team of accountants in Romania and find out information about the taxes for salaries in Romania. Please contact us at any time.