Romania has one of the lowest tax rates in Europe. Romania ranks no 1 with the lowest CIT for small businesses and dividend tax making Romania stand out in Europe. Individuals in Romania can also enjoy a personal income tax rate at 10%.
Browse corporate tax rates and personal tax rates in Romania.
Corporate tax rate in Romania
16% tax rate is the standard corporate income tax rate in Romania. This applies to all the legitimate registered resident businesses in Romania. A resident business refers to a business that is set up under Romanian law, and its main management operates in Romania. A resident Romanian company is taxable on its worldwide income. Find out more on company types in Romania.
| Income | tax rate |
| Revenue tax | 1% |
| CIT | 16% |
| Dividends | 8% |
| Donation | nil |
| Wealth | nil |
| Inheritance | nil |
* Revenue tax scheme in Romania is available for small companies up to 0,5 milion turnover a year. Company Romania legal solution lets increase limit up to 1,5M euro and dividend tax down to 0%.
The CIT due for nightclubs and gambling operations is either 5% of the revenue obtained from such activities or 16% of the taxable profit, whichever is higher.
Micro-company tax rates
There are tax incentives for micro-companies if their maximum revenue in the previous year was EUR 0,5 million (Company Romania solution lets increase limit up to 1,5M euro yearly) The following tax rate applies to their income:
- 1% with minimum one employee hired whole fiscal year;
You can check how to calculate a tax amount for a small company here.
Micro companies can apply for CIT if they fulfill the following conditions:
- Have a subscribed share capital of at least RON 45,000;
- Have at least two employees.
As a general rule, the corporate income tax is calculated quarterly. The final computation and payment of the corporate income tax for the whole calendar year are to be performed until March 25 of the following year.
Personal income tax rate in Romania
An individual is subject to 10% personal income tax (PIT) according to the Romanian Fiscal Code (Law 227/2015). The PIT is imposed on different sources of income like labor, pensions, and interest.The Romanian government provides tax inducement on different levels.Following incomes are exempt from PIT:
- Employees with disabilities,
- IT specialists,
- Employees who work in research and development,
- Employees who work in technological development field,
- Labor contract concluded for 12 months,
- Labor who work in the construction field.
The tax period is equal to the calendar year from 1 January to 31 December. The annual return shall be submitted by 25 May each year.
Social Security contribution in Romania
Social Security is deductible from the salary of an individual. The social security rate is charged to both companies and employees. In return, the Romanian government provides incentives through social programs including health insurance, and welfare.
| Tax name | Tax rate |
| Social security rate | 37.25% |
| Social security rate for companies (employer) | 2.25% |
| Social security rate for employees | 35%(10%health insurance,25%social insurance contribution) |
Value-added tax rate
Since January 1, 2017, a standard VAT rate in Romania has been 19%. VAT is imposed on the supplies of goods and services (including imports), neither qualifying for an exception nor qualifying for a reduced vat rate:
- 9% is the reduced rate levied on water, beverages, food industry, medical treatments, accommodation, etc.
- 5% is an extra reduced rate levied on school manuals, books, newspapers, hotel accommodation, restaurants, catering services, tickets to castles, museums, sports events, cinemas, etc.
A taxable person for VAT purposes is a legal entity and individual that independently carries out an economic activity.
For VAT return compliance, the standard tax period is the calendar month.
Property tax
Property tax in Romania consists of a building and land tax.
Building tax
According to the Romanian Fiscal Code, tax on the building is based on the utilization of the building it is classified as follows:
- Residential buildings
- Non-residential buildings
- Mixed-purpose buildings
Land tax
The land tax is a fixed amount per sqm, depending on the land surface, the type of area where it is located and is a maximum of 0.46 € per sqm.
Both, building tax and land tax are paid in two equal installments annually, March 31 and September 30 respectively.
Tax on vehicles
Means of transportation are taxed in Romania regardless of their ownership nature.
A car tax rate varies from RON 8 to RON 290 depending on the cylindrical capacity of each vehicle, for every 200 cm3 or a fraction thereof.
Find out more on car registration in Romania.
Summary
Tax rates in Romania look tempting and in fact they are especially for small and medium companies. Find out more about company registration in Romania.
