TAXATION OF CORPORATIONS
The profit tax rate (IS) is of 16%.
Taxation of dividends
Dividend distributions are taxed at a rate of 8%. It should be noted that, under double tax treaties signed with many European countries, this withholding may represent a tax credit imputable to the amount of tax owed by the shareholder or partner in his country of origin. Dividends distributed for the benefit of persons domiciled in a state that has not signed a tax agreement with Romania are subject to a 50%-withholding tax.
VAT
The effective VAT rate has been of 21% since 1 August 2025.
A reduced 11%-rate is applied to certain hotel services, drugs and groceries, etc.
Tax on the income of individuals
Individuals are taxed at a 10%-rate.
In particular, salaries are mostly taxed in the form of a 10%-withholding tax.
Several income categories (independent incomes, royalties, land incomes, etc.) are however additionally affected by social security expenses :
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if yearly net incomes are lower than 6 gross minimum wages (24.300 lei), healthcare insurance contribution equals 0.
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if yearly net incomes are between 6 and 12 gross minimum wages (24.300 – 48.600 lei), healthcare insurance contribution is 10% of 6 gross minimum wages (2.430 lei)
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if yearly net incomes are between 12 and 24 gross minimum wages (48.600 – 97.200 lei), healthcare insurance contribution is 10% of 12 gross minimum wages (4.860 lei)
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if yearly net incomes are upper than 24 gross minimum wages (more than 97.200 lei), healthcare insurance contribution is 10% of 24 gross minimum wages (9.720)
Small Enterprises (Micro-Enterprise Regime)
Companies that have an annual turnover of less than EUR 100.000,00 can choose to pay, instead of corporation tax, but instead pay income tax of 1% of their income provided however:
- that they employ at least one full-time employee (or the equivalent of a full-time employee if the company uses part-time jobs);
- that the same partner does not hold more than 25% of the shares in more than 3 micro-enterprises.
