An Overview of Tax Rates and Taxation


In the quest for attractive destinations to invest and do business, Romania stands out for its favorable taxation and competitive tax rates. As a blogger and writer dedicated to promoting Romania, it’s crucial to have an in-depth understanding of the Romanian tax landscape. In this article, we’ll merge the provided information with the additional data to provide you with a comprehensive overview of tax rates and taxation in Romania.

Corporate Tax: A Competitive Edge

Romania ranks at the top among European countries offering one of the lowest corporate tax rates, set at 16%. This rate, in effect since 2005, applies to all resident companies operating within the Romanian territory. To be considered resident, a company must be established under Romanian law and have its main management located in Romania. This means resident companies are subject to tax on their global income, further enhancing the country’s appeal as an investment destination.

Micro-Enterprises: Favorable Tax Regime

For micro-enterprises with revenues below 1 million euros, Romania offers a favorable tax regime. The income of these enterprises is taxed at a rate of 1% if they employ one or more employees, and at a rate of 3% in the absence of employees. However, certain conditions must be met, including a subscribed share capital of at least 45,000 RON and the presence of at least two employees.


Personal Income Tax: Targeted Benefits

Romania has also introduced targeted tax incentives for individuals. The personal income tax (PIT) is set at a flat rate of 10% and is applied to various sources of income, including employment, pensions, and interest. Exemptions are granted to specific groups, such as disabled employees, IT professionals, researchers and developers, and construction workers.

VAT: Differentiated Rates

The Value Added Tax (VAT) also plays a significant role in the Romanian tax landscape. The standard VAT rate is 19% since January 1, 2017. However, reduced rates of 9% and 5% are applied to specific activities, including water, food, healthcare, and hospitality sectors.

Declarations and Tax Periods

In Romania, the fiscal year typically aligns with the calendar year, from January 1 to December 31. Tax declarations must be submitted according to the deadlines set by the Romanian tax authorities.

Social Security and Other Contributions

Social security is a crucial component of the Romanian tax system, with contribution rates of 37.25% for employees and 2.25% for employers. These contributions enable the Romanian government to provide social benefits such as health insurance and social assistance.

Other Taxes: Property and Vehicles

Property tax in Romania encompasses both building and land taxes. The building tax varies based on the use of the building, while the land tax is based on the land’s surface and the type of zone.

Vehicles in Romania are subject to a tax based on their engine displacement, with rates ranging from 8 to 290 RON for every 200 cm³.

Favorable Taxation for Investment and Entrepreneurship

Romania positions itself as a prime destination for investors and entrepreneurs due to its favorable taxation and competitive tax rates. With tax incentives for micro-enterprises, targeted benefits for individuals, and differentiated VAT rates, the country offers an environment conducive to economic growth and innovation. It’s essential to become acquainted with these rates and regulations to leverage the opportunities that Romania provides as a business and investment destination.

Feel free to use this information to inspire your future articles aimed at promoting Romania to your audience of tourists, investors, and startups. If you need more information or verification, don’t hesitate to let me know.

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