Penalties pose a threat to each business who neglect the statutory filing obligations. To avoid this, our Romanian tax experts prepared a 2024 tax calendar for Romania, to provide you the most important deadlines in a simple A4 format.

Download the calendar , or read more below.

Download the 2024 tax calendar for Romania, or read more below

January 2024

January 9

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

January 15

Intrastat

  • Submission of Intrastat returns

January 25

VAT

  • Communication of the temporary VAT pro-rate applicable for 2024 and the computation method

  • Submission of the statement regarding the turnover obtained by the taxpayers which use the quarter as a VAT reporting period and did not perform any EU acquisitions in 2023 (Form 700)

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate Tax

  • Submission of the return regarding the change of the submission/payment method of the corporate tax (Form 012)

Dividend Tax

  • Payment of dividend tax due in relation to distributed and approved dividends but unpaid to shareholders by the end of 2023

Clawback tax

  • Payment of the clawback tax for the 4th quarter of 2024

January 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

February 2024

February 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

February 15

Intrastat

  • Submission of Intrastat returns

February 26

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Submission and payment of the corporate tax due for 2023 by non-profit organizations and taxpayers which obtain revenue from grains, technical plants etc. (Form 101)

February 29

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

Withholding taxes, income tax, social contributions and other taxes

  • Submission of the informative return regarding the withholding taxes in 2023 detailed per each beneficiary (Form 205)

  • Submission of the informative return regarding the withholding taxes relating to payments towards non-residents in 2023 (Form 207)

Representative offices

  • Submission of the return regarding the tax due for representative offices (Form 108) and payment of tax for representative offices 

March 2024

March 1

Financial statements

  • Submission of the declaration of inactivity by the companies that have not carried out activities in 2023

March 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

March 15

Intrastat

  • Submission of Intrastat returns

March 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)
  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Submission and payment of the corporate tax due for 2023 (Form 101)

April 2024

April 1

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

April 5

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

April 15

Intrastat

  • Submission of Intrastat returns

April 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)
  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)
  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Payment of corporate tax for the 1st quarter of 2023 or Advance payment of the corporate tax due for the 1st quarter of 2024

April 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

May 2024

May 8

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

May 15

Intrastat

  • Submission of Intrastat returns

May 27

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Submission of the unique declaration on income tax and social contributions payable by individuals

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Clawback tax

  • Payment of the clawback tax for the 1st quarter of 2024

May 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

Financial statements

  • Submission of the 2023 financial statements by state institutions and non-profit organizations

  • Submission of the 2023 financial statements

June 2024

June 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

June 17

Intrastat

  • Submission of Intrastat returns

June 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Informative statement on beneficiaries of private sponsorships (Form 107)

  • D177 – Request for redirection of corporation tax / income tax on microenterprises

July 2024

July 1

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

July 5

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

July 15

Intrastat

  • Submission of Intrastat returns

July 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Payment of corporate tax for the 2nd quarter of 2024 or Advance payment of the corporate tax due for the 2nd quarter of 2024

July 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

August 2024

August 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

August 16

Intrastat

  • Submission of Intrastat returns

Financial statements

  • Submission of mid-year accounting statements for the January – June 2024

August 26

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Clawback tax

  • Payment of the clawback tax for the 2nd quarter of 2024

August 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

September 2024

September 6

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

September 16

Intrastat

  • Submission of Intrastat returns

September 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

September 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

October 2024

October 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

October 15

Intrastat

  • Submission of Intrastat returns

October 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Payment of corporate tax for the 3rd quarter of 2024 or Advance payment of the corporate tax due for the 3rd quarter of 2024

October 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

November 2024

November 7

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

November 15

Intrastat

  • Submission of Intrastat returns

November 25

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Clawback tax

  • Payment of the clawback tax for the 3rd quarter of 2024

December 2024

December 2

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

December 6

VAT

  • Submission of amendments return regarding the change of the VAT reporting period to be submitted by taxpayers which report VAT on a quarterly basis and perform an EU acquisition (Form 700)

December 16

Intrastat

  • Submission of Intrastat returns

December 20

VAT

  • Submission of the VAT return (Form 300)

  • Submission of the special VAT return (Form 301)

  • Submission of the return regarding the amounts resulting from VAT adjustments (Form 307)

  • Submission of the VAT return due by taxpayers whose VAT code has been annulled (Form 311)

  • Submission of the informative return related to the EU supplies and acquisitions (Form 390 VIES)

Withholding taxes, income tax, social contributions and other taxes

  • Payment of withholding taxes related to payments of copy rights, prizes, non-residents, other sources

  • Submission of the return related to taxes due to the consolidated state budget (Form 100)

  • Submission of the return related to income tax and social security contributions and the nominal list of the insured individuals (Form 112)

Corporate tax

  • Advance payment of the corporate tax due for the 4th quarter of 2024

December 30

VAT

  • Submission of the informative return regarding the domestic supplies and acquisitions (Form 394)

Are you employing expats or sending your employees across the border? If so, there is a number of fiscal obligations you must comply with. Our Romanian experts gathered the most important aspects of cross-border mobility regarding tax and labour law. Learn about conditions on tax residency, personal income tax, social security and health insurance contributions or penalties for non-compliance in our eBook on expat tax in Romania.

Download our expat tax guide for Romania, or check out our brief infographic summary below

Overview of key facts related to expats in Romania

Our local tax, payroll and labour law experts are here to help you – as an expat or an employer – to obtain essential expert advice, so that you can effectively address all the matters related to cross-border mobility in Romania and other locations globally.

Tax residency

A person is a Romanian tax resident, if:

has a permanent home in Romania

is present in Romania for a period (or more periods) exceeding a total of 183 days, during any 12 consecutive months, ending in the current calendar year

is a Romanian citizen working abroad, as an official or employee of Romania in a foreign state

has the centre of vital interests in Romania

Tax rate

Rate
10%

%

Tax period

Calendar year

Social security contributions

Rate
25%

%

Health insurance contributions

Rate
10%

%

Tax return filing

The tax return is due by:

25th day of the month following the payment

Penalties related to tax

Delayed filing of the tax return: from EUR 105 up to EUR 1,050

Delayed payment of the due tax: 0.03% per day of delay and a fine from EUR 210 up to EUR 2,900

Delayed or missing registrations at tax authorities: from EUR 105 up to EUR 1,050

Delayed or missing report on monthly salary or withholding tax from salary: from EUR 105 up to EUR 1,050 and for taxes and contributions subject to withholding tax from EUR 210 up to EUR 2,900

Penalties related to social security

Not requesting an A1 form from the respective authorities: from EUR 1,050 up to EUR 1,850

Delayed report on social security: from EUR 105 up to EUR 1,050

Delayed payment of the social security contributions: 0.03% per day of delay and a fine from EUR 210 up to EUR 2,900

Delayed or missing registrations for the purposes of social security: from EUR 105 up to EUR 1,050

Penalties related to health insurance

Delayed report on health insurance: from EUR 1,050 up to EUR 1,850

Delayed payment of the health insurance contributions: from EUR 105 up to EUR 1,050

Delayed or missing registrations for the purposes of health insurance: 0.03% per day of delay and a fine from EUR 210 up to EUR 2,900

With a marketplace of nearly 20 million people, 37 million acres of arable land, breath-taking landscapes, an expanding economy, a well-educated workforce with more than 50,000 specialists in information technology, access to the Black Sea and Asia, Romania offers significant opportunities to foreign businesses.

After joining the European Union in January 2007, Romania went through a series of government reforms in order to satisfy the conditions of EU membership. Nowadays, the requirements of membership – including EU directives – are one of the driving forces in Romania’s program of reform, modernization and investment in infrastructure. More significantly, these directives are accompanied by funding from the EU in the form of Structural Adjustment Funds and other programs, which enable the new members to align their economies with the rest of the EU.

Romania is a market with excellent potential, a strategic location, and an increasingly solid business climate. While careful evaluation of the market is needed in order to seize business opportunities, exporting to or investing in Romania is gradually becoming less challenging than in previous years in terms of business environment predictability.

Its economy is among the EU’s fastest growing members, with a 4.9% GDP growth in 2022, 5% for 2018 and 4% in 2019 primarily driven by consumption and investment.

We hope the new Tax Guideline for Romania will provide all the necessary information for those who consider doing business in Romania, as well as for already existing businesses.

Download our 2024 tax guideline for Romania, or read more below

Legal forms of business

General rules on purchasing of real estate

EU and EEA citizens can buy real estate properties (land and buildings) in the same conditions as Romanian citizens.

Non-UE/EEA citizens may acquire buildings in Romania, while land may be acquired only if there is an international agreement in place which also allows Romanian citizens to acquire land in the respective countries.

Legal forms of business

Before starting the investment in the Romanian market, the investors have to decide upon the legal form of business which will be used.

The types of business forms are stipulated by Law no. 31/1990 as republished and subsequently modified and completed, and there are compiled in the next table with specific information: the minimum share capital, the liability of the shareholders/stockholders, the minimum number of shareholders/stockholders.

The most common forms of business used in Romania are the Limited Liability Company along with the Joint Stock Company and Branches.

The form of business Minimum capital (approx. in EUR) Shareholders´ liability Number of shareholders
English Romanian
General Partnership Societate in nume colectiv (S.N.C.) N/A The shareholders have unlimited and joint liability for social contributions. No less than 2
Limited Partnership Societate in comandita simpla (S.C.S.) EUR 0.4 The limited partners have no management authority and they are not responsible for the debts of the partnership. They respond in the limit of the subscribed shares.

The general partners have management control and they have joint and several liabilities.

At least one limited partner and at least one general partner.
Limited Liability Company Societate cu raspundere limitata (S.R.L.) EUR 0.2 The shareholders respond in the limit of the contribution to the share capital. 1 – 50
Joint Stock Company Societate pe actiuni (S.A.) No less than EUR 25,000 The stockholders respond in the limit of the subscribed shares. No less than 2
Company limited by shares Societate in comandita pe actiuni (S.C.A.) No less than EUR 25,000 The limited partners have no management authority and they are not responsible for the debts of the partnership. They respond in the limit of the subscribed shares.

The general partners have management control and they have joint and several liabilities.

No less than 2
Branch Sucursala N/A The Mother Company is liable for its branch. N/A
Sole entrepreneur Persoana fizica autorizata (P.F.A.) N/A The sole entrepreneur is also the sole responsible. N/A

Social security and labour law aspects

General social and health security

Social security and health insurance assessment base of an employee in Romania is derived from salary income.

Payrolls and Contribution Employee Employer
Income tax 10% N/A
Health insurance contribution 10% N/A
Social (Pension) insurance contribution 25% N/A
Work insurance contribution N/A 2.25%

* For the construction field, agriculture, food industry and IT, there are special provisions applied regarding due taxes and exemptions by case.

Residents of the EU are covered by the provisions of EC Regulation 883/2004 regulating social security and health insurance rules in case of cross-border activities.

General comments on labour law

  Main features of employment relationship Applicable law
Contract type Individual labour agreement for definite period, indefinite period, home-based work, telework, part-time or full-time work, temporary staffing, etc. Law No. 53/2003 Labour Code
Contract must include Parties, duration of the contract  date of the contract conclusion, work conditions, the place where the work is performed, evaluation criteria of the employee, the occupation, the risks of the job, number of vacation days, number of days applicable for the notice, number of working hours per day and/or per week, probationary period and its conditions if any, the date of commencement of work, base salary, other elements constituting the salary income, separately recorded, periodicity of payment of the salary to which the employee is entitled and method of payment, etc.

 (The contract must be concluded in writing)

Working time Full time employees – 8 hours/day and/or 40 hours/week

Part time employees – the number of normal working hours, calculated weekly or as a monthly average, is less than the number of normal working hours of a comparable full-time employee.

The working time is determined by the daily norm thus weekly norm represents daily norm*no. of working days (5 days).

Working time is any period during which the employee performs work, is at the employer’s disposal and fulfils his/her tasks and duties, in accordance with the provisions of the individual employment contract, the applicable collective labour contract and/or the legislation in force.

Holiday entitlement per year Minimum 20 working days per year
Trial period For indefinite labour agreements depending on the nature of the position:
  • Execution position: maximum trial period is 90 calendar days;
  • Management position: maximum trial period is 120 calendar days.

For definite labour agreements:

  • Depending on the period:
    • < 3 months: maximum 5 working days;
    • 3 – 6 months: maximum 15 working days.
  • Depending on the nature of position:
    • Execution position >6 months: maximum 30 working days;
    • Management position >6 months: maximum 45 working days.
Notice Period
  • Parties’ agreement: no notice period required.
  • Dismissal: Minimum 20 working days.
  • Resignation, depending on the nature of the position:
    • Maximum 20 working days for execution position;
    • Maximum 45 working days for management position.

Taxes on corporate income

Corporate income tax (CIT) – rates

The standard corporate income tax rate is 16%.

Taxpayers that are carrying on activities such as gambling and nightclubs are either subject to 5% rate of the revenue obtained from such activities or to 16% of the taxable profit, depending on which is higher.

Companies with a turnover higher than EUR 50,000,000 in the previous year and which in the concerning year determine a corporate income tax lower than the minimum tax on turnover are required to pay corporate income tax at the level of a minimum tax on turnover. The minimum tax on turnover is determined as 1% of total income to which certain tax adjustments are made.

Corporate income tax – general information

Residence

A company is considered as resident in Romania if it is set-up under Romanian law, has its legal seat or its place of effective management in Romania.

Taxable income

Resident companies are taxable on their worldwide income, unless a double tax treaty stipulates otherwise.

The taxable profit of a company is calculated as a difference between the revenues and expenses registered according to the applicable accounting regulations, adjusted by deducting non-taxable revenues and tax deductions and by adding non-deductible expenses. Also, elements similar to revenues and expenses are taken into account when calculating the taxable profit.

Non-resident companies that are carrying on activities in Romania through a permanent establishment are required to pay corporate income tax for the taxable profit attributable to the permanent establishment.

Tax period

The calendar year or the fiscal year for the companies that have chosen, according to the applicable accounting regulations, to apply a fiscal year different from the calendar year.

Tax returns and assessment

As a general rule, the corporate income tax is calculated quarterly. For the first three quarters the filing and the payment of the corporate income tax is performed quarterly, until 25th of the first month following the end of the quarters. The final computation and payment of the corporate income tax for the whole calendar year is to be performed until March 25th of the following year.

There are exemptions from the above general rule that apply to companies such as:

  • Companies that have chosen the fiscal year different from the calendar year have to declare and pay the annual corporate income tax until 25th of third month after the ending of the fiscal year changed.
  • Non-profit organizations, companies that obtain revenues mainly from agricultural activities, educational units, religious cults and other taxpayers specifically mentioned by law have to declare and pay the annual corporate income tax by February 25th of the following year.
  • Credit institutions and branches of foreign credit institutions in Romania are required to apply the system of quarterly advance payments.

Advance payments

Taxpayers, except those who are specifically mentioned by law, may opt to declare and pay the annual corporate income tax by making quarterly advance payments. The anticipated quarterly advance payments are computed as ¼ of the previous annual corporate income tax updated by the consumer price index and are due by the 25th of the month following the end of the quarter. By exception, the quarterly advance payments related to fourth quarter are due by December 25th, respectively until the 25th of the last month of the changed fiscal year.

Deductions

As a general rule, are considered deductible expenses those expenses which are incurred for the purpose of carrying on the business activity, unless they are specifically mentioned by law as limited deductibility expenses or non-deductible expenses.

Carry forward of losses

Annual tax losses determined by way of the corporate income tax return, beginning with 2024/amended tax year beginning in 2024, as the case may be, shall be recovered from the taxable profits realized up to maximum 70%, in the following 5 consecutive years. Recovery of losses will be made in the order in which they are incurred, at each income tax payment date.

Research and Development (R&D)

Companies can benefit from an additional deduction of 50% of the eligible expenses for their Research and Development (R&D) activities. Furthermore, accelerated depreciation for devices and equipment used in the R&D activities may be applied.

The 50% additional deduction from the R&D expenses will not be recomputed in case the objectives of the project are not met.

In order to benefit from these incentives, the eligible R&D activities should be from the applicative research categories and/or technological development relevant to the company activity and the activities should be performed in Romania, as well as in the European Union or in other states – member states of the European Economic Area.

Incentives are granted separately for R&D activities of each project.

Tax exemptions for reinvested profit

The profit invested in new and specific technological equipment manufactured and/or purchased released for use is exempt from income tax. In order to benefit from this incentive, the technological equipment should be used by the company for the purpose of carrying on the business activity for more than half of its useful life, but for no longer than five years. The companies benefiting from this incentive cannot use the accelerated depreciation method for the respective technological equipment.

It is also exempt from corporate income tax, the profit invested in supporting vocational-dual education by ensuring the practical training and quality training of students.

Withholding tax

Domestic dividend tax

As a general rule, dividends paid by a Romanian company to another Romanian company are subject to 8% tax. However, the dividends paid are non-taxable if the beneficiary of the dividend has held, at the time of the distribution, a minimum of 10% of the Romanian company for an uninterrupted period of at least one year.

WHT for non-resident companies

The applicable WHT rates in relation with non-resident companies are:

  • 5% for the revenues obtained from dividends
  • 50% for payments made by Romanian companies into non-resident companies bank accounts that are open in countries that do not have an information exchange agreement concluded with Romania and only if such payments result from artificial transactions
  • 16% in case of any other revenues obtained from Romania

Dividends paid

As a general rule, dividends paid to non-resident companies are subject to 8% withholding tax.

However, as Romania is an EU member state, the EU Parent-Subsidiary directive can be applied. Therefore, dividends paid by Romanian companies to resident companies in one of the EU member states are exempt from taxation if the beneficiary of the dividend has held, at the time of distribution, a minimum of 10% of the shares of the Romanian company for an uninterrupted period of at least one year.

Interest

As a general rule, the interest paid to non-resident companies is subject to 16% withholding tax.

However, as Romania is an EU member state, the EU Interest and Royalties Directive can be applied. Therefore, interest paid by Romanian companies to resident companies in one of the EU member states are exempt from taxation if the beneficiary of the interest has held, prior to the time of payment, at least 25% of the share capital of the Romanian company for an uninterrupted period of at least two years.

Royalties

As a general rule, royalties paid to non-resident companies are subject to 16% withholding tax.

However, as Romania is an EU member state, the EU Interest and Royalties Directive can be applied. Therefore, royalties paid by Romanian companies to resident companies in one of the EU member states are exempt from taxation if the beneficiary of the interest has held, prior to payment time, at least 25% of the Romanian company´s share capital for an uninterrupted period of at least two years.

Anti-avoidance rules

Thin capitalization rules have been repealed as of 2018. Therefore, as of January 1, 2018, the Tax Code introduces a new concept – exceeding borrowing costs – defined as the difference between interest expense and interest income as well as other equivalent expenses/income.The total exceeding borrowing costs resulting from transactions/operations carried out both with related and non-related parties may not exceed the deductible ceiling represented by the RON equivalent of the amount of EUR 1,000,000. However, exceeding borrowing costs resulting from transactions/operations which do not finance the acquisition/production of fixed assets under construction/assets established according to the law and which are carried out with related parties, are deductible, in a tax period, up to the deductible ceiling represented by the RON equivalent of EUR 500,000.

The exceeding borrowing costs exceeding the threshold of EUR 1,000,000 may benefit from an extra deduction, limited to 30% of the accounting profit adjusted negatively with non-taxable income and positively with income tax expenses, exceeding borrowing costs and deductible tax depreciation. If the resulting base is zero or negative, the exceeding borrowing costs is non-deductible in the current period, but can be recovered for an unlimited period of time and can be deducted in subsequent periods applying the same mechanism.

Controlled foreign company

A corporate taxpayer who controls a foreign company includes in its taxable base undistributed income derived from: interest, royalties, dividends, income from the transfer of shares, income from financial leasing, insurance income, banking activities, etc.

An entity is considered a controlled foreign company if the following conditions are met:

  • The taxpayer liable for corporate income tax owns, alone or together with its associated enterprises, directly or indirectly, more than 50% of the voting rights or capital of the controlled foreign entity or is entitled to receive more than 50% of its profits;
  • The corporate income tax actually paid by the entity is less than the difference between the corporate income tax that would have been paid if the rules of the Romanian Tax Code had been applied and the corporate income tax actually paid.

Transfer pricing

Transactions performed between two Romanian related persons, as well as between related Romanian persons and non-resident persons, are subject to transfer pricing rules.

A legal entity is related with another legal entity if at least one of the cases below is applicable:

  • The first legal entity holds, directly or indirectly, a minimum of 25% of the participation titles or voting rights at the other legal entity or if it effectively controls the legal entity.
  • The second legal entity holds, directly or indirectly, a minimum of 25% of the participation titles or voting rights at the first legal entity.
  • A third-party legal entity holds, directly or indirectly, a minimum of 25% of the participation titles or voting rights at both the first and the second legal entity.

Transactions between related parties should use the arm’s-length principle. In case the transfer prices are not set at arm’s length, the fiscal authorities have the right to adjust the amount of revenue and expense in order to reflect the market value.

International aspects-double tax treaties

In order to apply the provisions of the relevant Double Taxation Treaty (DTT), the non-resident recipient of the income should provide to the Romanian payer a tax residence certificate attesting its tax residency for the purpose of the DTT.

In case the tax rates mentioned in the domestic legislation differ from the rates mentioned in the applicable DTT, then the most favourable rate will apply.

Taxes on individual income

Personal income tax

At this moment, incomes obtained by individuals are taxed with 10%.

Legislation

Personal income tax regarding incomes from salaries is governed by the Fiscal Code (Law 227/2015).

Exemption from the taxation

Romanian State established as income tax free several categories of employees:

IT specialists – up to 10,000 Lei gross per month, if certain conditions are met according to the law.

Employees with disabilities – the tax exemption is granted only under strict conditions verified by Romanian medical system.

Employees who work in Research and Development (R&D) or Technological Development field – the tax exemption is granted if certain conditions are met as per law provisions.

Employees who work in construction field, agriculture and the food industry, up to 10,000 Lei gross per month, if certain conditions are met according to the law.

Tax period

The tax period equals the calendar year.

Deductions

Personal deduction

The personal deduction comprises the basic personal deduction and the additional personal deduction and is granted within the limit of the monthly taxable income earned.

The basic personal deduction is granted to individuals who have a gross monthly income of up to 2000 lei above the level of the minimum gross basic salary in force in the month of income. The Tax Code also introduces changes to the methodology for calculating the personal deduction.

The additional personal deduction is granted as follows:

  • 15% of the basic gross national minimum wage guaranteed in payment for individuals up to 26 years of age who earn up to 2,000 lei above the basic gross minimum wage;
  • 100 lei per month for each child up to the age of 18, if the child is enrolled in an educational establishment.

Other deductible amounts

For example, voluntary health insurance premiums, and private pensions, incurred by employees shall be deductible for payroll tax up to EUR 400 per year for each category.

Allowances

Per Diem

During the period of delegation, employees are entitled to payment of travel and accommodation expenses and a delegation allowance.

Delegation is the temporary performance by an employee, at the employer’s request, of work or tasks corresponding to the employee’s duties outside the workplace.

The delegation allowance or daily subsistence allowance, as it is also known in practice, is the daily amount granted, for example, to cover the cost of food, the usual incidental expenses and the cost of transport within the locality where the employee works.

Limits for daily allowance

The maximum deductible limit applicable for daily allowances granted by the Company, inside Romania or abroad represents 2.5* the daily subsistence allowance of the legal level established for the delegation/posting allowance, by Government decision, for staff of public authorities and institutions, up the maximum value of 3 basic salaries..

The values that exceed the maximum limit mentioned above are considered benefits and must be included in the category of income salaries and salary-related income.

Daily allowance in EU countries (with some exceptions)
Interval Minimum Maximum tax deductible up to
01.12.2012 – present EUR 35 EUR 87.50
Daily allowance in Romania
Interval Minimum Maximum tax deductible up to
01.04.2023 – present RON 23 RON 57.5

International aspects  ̶  residence

Individuals who meet at least one of the following conditions are considered to be resident individuals in Romania:

  • Have their domicile in Romania
  • The centre of vital interests is in Romania
  • They are present in Romania for a period exceeding 183 days during any period of 12 consecutive months ending in the calendar year concerned.

All other individuals are considered to be non-residents. EU residents are subject to the rules of EC Regulation 883/2004 on social and health security for cross-border activities.

Value-added tax

Value-added tax  ̶  rates

The standard VAT rate in Romania is 19%.

A reduced rate of 9% applies to water, food & beverage industry (save for certain items specifically excluded by the law), medical treatments and prosthesis, hotel accommodation, restaurant and catering services,  provision of social housing under certain conditions, entrance fees to sports events, castles, museums and cinemas

Extra-reduced rate of 5% applies to schoolbooks, newspapers, magazines,  including those recorded on electromagnetic or other media.

Value-added tax – general information

Legislation

VAT rules are based on the principles of the Council Directive 2006/112/EC on the Common System of Value Added Tax. The Directive is implemented in the Romanian law by Law No 227/2015 and related Methodological Norms.

Taxable person

Legal entities and individuals that carry on independently an economic activity.

Taxable event:

  • The supply of goods and services in relation with an economic activity within the territory of Romania
  • The intra-Community acquisition of goods/services having the place of supply within the territory of Romania
  • The import of goods into Romania

Taxable amount

Total consideration charged for the supply, excluding VAT but including any excise duties or other taxes and fees. In some cases, between related parties, the taxable amount consists of the market value.

Tax period

The standard fiscal period is the calendar month.

For taxable persons whose previous year-end turnover is lower than EUR 100,000 and did not perform intra-Community acquisitions of goods, the fiscal period is the calendar quarter.

Tax assessment

Periodical VAT returns (monthly or quarterly, by the 25th day of the following month) and the Local Sales and Purchases List (monthly, by the 25th day of the following month). The payable VAT liability consists of the output VAT, due on supply of goods and services carried out, less the input VAT of the same period (monthly or quarterly, by the 25th day of the following month). The refundable VAT (when input VAT is higher than output VAT) can be requested for refund or carried forward until the statute of limitation period expires (5 years).

In addition, taxable persons carrying out intra-Community operations with goods or services with the place of supply according to the basic rule for “business to business” services have to file an EC Sales List (that shows the VAT identification numbers of his business partners and the total value of all the supplies of goods and services performed by the entrepreneur) on a monthly basis depending on the situation.

Submission through electronic means is available.

All above tax statements are to be prepared based on the information presented in the VAT Sales and Purchase Ledgers.

Reverse charge

Reverse charge applies for the intra-Community acquisitions, where both parties are registered for VAT purposes. Local reverse charge is applicable in some cases between two Romanian VAT payers, for example:

  • Corn and industrial crops, including oilseeds and sugar beets
  • Certain waste and recyclable materials
  • Wood and alike materials
  • Gas emission and “green” certificates
  • Electric energy to traders
  • Land and buildings
  • Investment gold, under certain conditions
  • Mobile phones
  • Integrated circuits such as microprocessors and central processing units
  • Portable automatic data processing devices (such as laptops, tablets etc.)
  • Video game consoles

VAT cash accounting system

The system is optional for taxpayers with a previous year turnover lower than RON 4,500,000and for the newly set-up companies. The right to deduct the input VAT for the acquisitions of goods/services from companies applying the system is deferred until the payment is performed.

RO – invoice

Starting 1st of January 2024, B2B e-invoicing has become mandatory.

VAT registration

Normal VAT registration

The mandatory VAT registration for taxable persons having the place of business activity in Romania should be performed when the annual turnover of EUR 88,500 (RON 300,000) is exceeded. Voluntary VAT registration before the threshold is exceeded is also possible.

Non-resident taxable persons established in Romania through fixed establishments and non-residents having no actual presence in Romania can register without observing the above threshold. However, a VAT number must be in place before the commencement of the economic activity.

A foreign taxable person that makes long-distance sales (mail order business) to any non-taxable person or that is not registered for VAT in Romania must register for VAT in Romania if the total annual value of the goods/supplies reaches EUR 35,000 (RON 118,000).

Identified person

Taxable person not registered for normal VAT purposes in Romania and not required to register are liable to register as an identified person (special VAT registration) in the following situations:

  • Purchase of services from persons established outside Romania having the place of supply in Romania
  • Supply of services with place of supply in another EU Member State
  • Intra-Community acquisitions of goods from another EU Member State cumulatively exceeding the annual threshold of EUR 10,000.

VAT group registration

Companies that are legally independent but are closely related financially, economically and from an organisational point of view may form a tax group, if administered by the same tax office and having the same tax period. Transactions between the members of the group will still fall within the scope of VAT.

Other taxes

Micro-enterprise tax

Starting 1 January 2024, in order to be eligible for the micro-enterprise income tax, the following cumulative conditions must be met at 31 December 2023:

  • turnover lower than €500,000 (including income of related micro-enterprises);
  • its share capital is held by persons other than the State and administrative-territorial units;
  • it is not undergoing in dissolution followed by liquidation;
  • % of revenues other than consultancy and/or management services is higher than 80% of total revenues;
  • has at least one employee;
  • has shareholders directly or indirectly owning more than 25% of the shares and the taxpayer is the only legal entity selected by the shareholders to apply the microenterprise tax;
  • the financial statements have been timely submitted.

Tax period

The tax period equals the calendar year.

Tax returns and assessment

Payment of the tax and filing of the returns is made quarterly, by the 25th day of the month following the end of the quarter for which the tax is calculated.

Property taxes

Building tax

For buildings owned by companies, the following tax rates are applicable:

  • Between 0.08% and 0.2% of the buildings tax value for residential buildings
  • Between 0.2% and 1.3% of the buildings tax value for non-residential buildings
  • 5% in case the building owner has not updated the taxable value of the building in the last 3 previous years

Building tax is paid annually in two equal instalments, until March 31st and September 30th.

The building tax is due for the entire tax year by the person who owns the building as of December 31st of the prior tax year.

Tax on plots of land

The owners of land are subject to tax on plots of lands. The Local Council establishes a fixed amount per square metre, depending on the rank of the area where the land is located and the category of land use.

Tax on plots of land is paid annually in two equal instalments, until March 31st and September 30th.

The tax is due for the entire tax year by the person who owns the land as of December 31st of the prior tax year.

Tax on transportation means

The tax on transportation means in Romania is paid by any person that owns a mean of transportation.

The tax rate varies from RON 8 to RON 290 depending on the cylindrical capacity of each vehicle, for each 200 cm3 or a fraction thereof.

The tax on transportation means is paid annually in two equal instalments, until March 31st and September 30th.

The tax on transportation means is due for the entire tax year by the person who owns the mean of transportation as of December 31st of the prior tax year.

Other business-related taxes

Excise duties

The following products are subject to excise duties: alcohol and alcoholic beverages, manufactured tobacco products, energy products and electricity.

Customs duties

Goods imported from non-EU countries are subject to import customs clearance.

Investment incentives

Individuals working as IT specialists or in the Research & Development field may benefit from an exemption from the standard 10% income tax, under certain conditions expressly mentioned in the Romanian domestic legislation.

Companies doing business in Romania could benefit from the following incentives:

  • Tax facilities regarding R&D expenses
    Companies may benefit of an extra 50% tax depreciation for the eligible R&D expenses and may also apply the accelerated depreciation for these expenses.
  • Tax exemption on reinvested profit
    The facility refers to the exemption of corporate tax of the profit re-invested in certain types of assets.

Companies that carry out transactions with related parties often face financial, tax and legal obstacles that impact their daily business activities. Therefore, in order to comply with domestic and international Transfer Pricing regulations and to ensure a smooth transfer of goods and services among related parties, it is necessary to have a sound and coherent Transfer Pricing policy.

General Transfer Pricing rules have been implemented in the Romanian legislation in 2003 via the Tax Code, mentioning arm´s length principle and the specific methods provided by OECD in order to determine the market value of transactions between related parties.

Currently, Romanian companies are obliged to keep Transfer Pricing documentation for both cross-border and domestic transactions. According to the Romanian tax legislation, all related parties are obliged to prove the method applied for setting the prices of controlled transactions (domestic or cross-border) between related parties and keep a relevant documentation justifying this method.

In recent years, the number of tax inspections on Transfer Pricing rapidly increased, that is why we recommend focusing on this area and, especially, on preparation of the proper Transfer Pricing documentation.

Download our latest 2024 Transfer Pricing overview for Romania, or read more below

Applicable legislation

Arm’s length principle

The arm’s length principle is based on a comparison of the terms which were agreed in any business or financial transactions between related parties and the terms which would have been agreed between unrelated parties in similar business or financial transactions, in comparable circumstances.

The review of comparability of the terms is made by confronting, in particular, the businesses conducted by the parties, including, but not limited to, their production, assembly works, research and development, purchase and sale, the scope of their business risks, the characteristics of the compared property or the service, the terms agreed between the parties to the transaction, the economic environment in the marketplace, and the business strategy. The terms shall be considered comparable if there is no difference at all or if only minor adjustments would compensate any such difference.

If there is a difference between the prices agreed in transactions of related parties and the prices applied between unrelated parties in comparable business transactions, the tax authorities may adjust the taxable base of the related parties involved in the transactions.

Related parties

Any Romanian taxpayer that carries out transactions with related parties, for both domestic and cross border transactions, is subject to Transfer Pricing rules.

Related parties are defined as:

  1. An individual is affiliated with another individual if such person is spouse or relative up to the third degree, inclusive. Between affiliated persons, the price at which tangible or intangible goods are transferred or services are rendered is transfer price.
  2. An individual is affiliated with a company if the individual owns, directly or indirectly, including holdings of affiliated persons, a minimum of 25% from the value/number of shares or from the voting rights in the company, or effectively controls the company.
  3. A company is affiliated with another company if at least:
  • The first company owns, directly or indirectly, including holdings of affiliated persons, a minimum of 25% of the value/number of shares or voting rights in the other company, or if it controls the company;
  • The second company owns, directly or indirectly, including holdings of affiliated persons, a minimum of 25% from the value/number of shares or voting rights in the first company;
  • A third company owns, directly or indirectly, including holdings of affiliated persons, a minimum of 25% by the value/number of shares or voting rights both in the first and in the second company.

Documentation

Content

Transfer Pricing documentation represents a set of information, data and facts which demonstrate and explain the method of taxpayer’s price formation in controlled transactions. Transfer Pricing documentation, in general, consists of two parts: a general one and a specific one.

The general part contains a set of information giving an overall picture of the group of related parties

The specific part contains specific information related to the taxpayer and to the controlled transactions in which the taxpayer is engaged

General rules

Transfer Pricing documentation shall be prepared for each controlled transaction separately or for each group of aggregated controlled transactions and in Romanian language. Transfer Pricing documentation refers to each fiscal year.

Even if each Romanian taxpayer performing economic transactions with affiliated parties should prepare a Transfer Pricing documentation, there are some differences when it comes to deadlines and timing, as detailed in the following two subsections.

Taxpayers categories

  1. Large taxpayers are obliged to prepare the Transfer Pricing documentation if they carry out transactions with related parties exceeding the following thresholds:
  • EUR 200,000 cashed in/paid interest for financial services
  • EUR 250,000 services rendered/received towards/from related parties
  • EUR 350,000 acquisitions/sales of tangible/intangible assets
  1. Large taxpayers that do not meet the above thresholds or medium or small taxpayers are obliged to prepare the Transfer Pricing documentation if they carry out transactions with related parties exceeding the following thresholds:
  • EUR 50,000 cashed in/paid interest for financial services
  • EUR 50,000 services rendered/received towards/from related parties
  • EUR 100,000 acquisitions/sales of tangible/intangible assets
  1. The other taxpayers who do not fall in any of the above-mentioned categories are not obliged to prepare the Transfer Pricing documentation, however they should document that the arm’s length principle is observed in dealings with the related parties in line with financial and tax applicable principles.

Deadlines

Based on the classification detailed above, the deadlines for drafting/presenting the Transfer Pricing documentation are as follows:

Taxpayers in category 1 should present the Transfer Pricing documentation within 10 days of the tax authorities’ request.

Taxpayers in category 2 should present the Transfer Pricing documentation within 30-60 days of the tax authorities’ request. The taxpayers may ask for maximum 30-day postponement.

Due to the short preparation period, it is recommended having the documentation prepared in advance.

Methods

Any traditional and other Transfer Pricing methods according to OECD Transfer Pricing Guidelines can be used while the principle of the best method shall be applied. Also, a combination of more methods is possible if necessary. If appropriate, other methods may be used, too.

Methods based on comparison of prices

Comparable uncontrolled price method – used mainly for transactions with tangible and intangible assets and financial transactions

Resale minus method – used mainly for distributors of products

Cost plus method – used mainly for transactions related to manufacturing and sale of semi-finished products/finished products which do not include high added value

Methods based on comparison of profits

Net trading margin method – mainly for comparable transactions that significantly differs in functions

Profit split method – suitable for very integrated transactions when the parties contribute in a unique way or they possess valuable tangible asset

Advance Pricing Agreements (APA)

Advance Pricing Agreements (APA) are available under Romanian legislation. APA are valid up to 5 years with possibility of extension in case of long-term contracts.

Fee for the initial APA
20,000€

%
Fee for amending the initial APA
15,000€

%

For large taxpayers and other taxpayers with consolidated value of transactions higher than EUR 4,000,000, the fee is EUR 20,000 for the initial APA and EUR 15,000 for amending the initial APA.

Fee for the initial APA
10,000€

%
Fee for amending the initial APA
6,000€

%

For other taxpayers and consolidated value of transactions lower than EUR 4,000,000, the fee is EUR 10,000 for the initial APA and EUR 6,000 for amending the initial APA.

Penalties

For non-compliance regarding the preparation and presentation of the Transfer Pricing documentation, penalties are applicable:

  • For large and medium taxpayers – RON 12,000-14,000 (approx. EUR 2,510-2,930)
  • Other taxpayers – RON 2,000-3,500 (approx. EUR 420-730)

Separately, adjustment of tax base plus late payment interest and penalties may be applicable.

Our free VAT calculator can be used to convert the amounts that appear on invoices, using the current VAT rates. In Romania, three VAT rates are applied (19%, 9%, 5%), depending on the nature of the goods & services and company’s CAEN (activity areas) codes.

19 % is the basic VAT rate in Romania.

The reduced rate of 9% applies to:

The reduced rate of 5% applies to:

Disclaimer

This calculator has been set for simulation purposes only and may not cover all the factors that determine the calculation of VAT, according to Romanian legislation. Accace is not responsible for the actions taken by any natural or legal person, based on calculations made using this VAT calculator. Before taking action, we highly recommend that you consult a VAT/tax specialist.

Regardless if a Romanian employer contracts a Romanian or foreign individual, they must fulfill certain obligations. Under the Romanian law, in order to hire foreign citizens, employers must take some steps that, for non-EU citizens, are not very simple compared to other countries. Therefore, the difficulty of the employment process depends on the location from which the citizen seeking employment in Romania comes from.

Download our 2024 guide on labour law and employment in Romania, or read more below

Employment characteristics

Employment contract types

There are more types of employment agreements in Romania, no matter if the individuals are residents or non-residents, of which we mention:

Employment agreement for indefinite period

Employment agreement for definite period

As a rule, the employment contract must be concluded for an unlimited duration. The unlimited duration is a measure of protection for the employee.

By exception, the individual employment contract may also be concluded for a limited duration, under the terms expressly provided by the law. Maximum number of defined employment agreement is 3 successive ones.

Employment of residents

According to Article 13 of the Romanian Labour Code, the minimum age required to be employed is 16 years. A 15-year-old individual can be hired for certain activities which will not affect his health or professional development and only with the prior consent of the parents or legal representatives.

The employment of an individual under the age of 15 is forbidden.

The future employee must present to the employer documents as:

the study diploma(s)

medical check (cost bear by the new employer)

identity card

birth certificate

the relevant documentation regarding professional specialization (if the job profile implies such special authorization or qualification)

For some positions specified in the National Classification of Positions in Romania are required superior studies and it is not allowed to hire an individual without the necessary qualification.

Employment of non-residents (EU and non-EU)

The non-residents that come from countries out of the UE are usually employed with agreements concluded for indefinite period, because they need to prove stability and the fact that they will be able to support themselves during the term they will live in our country.

To employ this type of non-resident, the Romanian employer needs to go through an entire procedure. Firstly, he/she must obtain the approval of the Romanian Immigration Office, and after this stage, the employee may apply for the staying permit.

For UE citizens it is simpler to conclude an employment agreement in Romania. If the period of their staying in Romania exceeds 180 days in one year, they must register at the Romanian Immigration Office.

After the conclusion of the employment agreement, all employees (residents, non-residents from UE or third countries) have the same rights and obligations in relation with the Romanian employer.

Employment contract minimum requirements

Labour contract and required documentation

The Labour Code requires that an individual employment contract must be concluded in written form and in Romanian language.

Among the mandatory elements that an individual employment contract must contain with observance of the provisions of Article 17 of the Labour Code, we mention:

the identification details of the employer and employee;

contract duration and the job position occupied in accordance with the Romanian Classification of Jobs, as well as the job description;

salary, periodicity of payment and method of payment;

vacation days and other days off entitlement;

the duration and conditions of the probationary period, if any;

notice period and conditions.

The contract may also specify provisions such as confidentiality, copyrights (in IT area) etc.

The individual employment contract can be concluded with handwritten signature or electronic signature (i.e. advanced electronic signature or the qualified electronic signature). At the conclusion, amendment, suspension or, as the case may be, cessation of the individual labour contract, the parties must use the same type of signature, namely the handwritten signature or the electronic signature, under the terms of the specific law.

Other mandatory requirements

The occupational medical check before concluding the individual employment contract is mandatory. Failure to this obligation shall bring about  the nullity of the individual employment contract, and failure to comply with this provision may also bring sanctions applicable to the employer.

For year 2024, the monthly minimum gross base salary guarantee in payment   is RON 3,300. The employers cannot pay the employees the minimum gross base salary for more than 24 months.

For employees in the construction sector, the minimum monthly gross base salary is RON 4,582 and for employees in the agricultural sector and food industry, the minimum monthly gross base salary is RON 3,436.

The employee is entitled, according to the provisions of the Labour Code, to a minimum of 20 working vacation days per year.

Trial/probationary period

The probation period depends on the employee’s position and the duration of his/her individual employment contract. For contracts concluded for an indefinite period, the maximum probation period can be of:

Execution position
90 calendar days

%
Management position
120 calendar days

%

Trial/probationary periods for part-time employment contracts shall not exceed:

  • 5 working days for a duration of the individual employment contract shorter than 3 months;
  • 15 working days for a duration of the individual labour contract ranging between 3 and 6 months;
  • 30 working days for a duration of the individual labour contract longer than 6 months;
  • 45 working days, in the case of employees holding management positions, for a duration of the individual labour contract longer than 6 months.

Termination of the employment

Cases

A Romanian employment contract can cease as follows:

  • by right (for contracts concluded for definite period);
  • based on the parties’ consent, on the date agreed upon by them;
  • as a result of one of the unilateral will of the parties, in the cases and under the terms restrictively provided by the law.
  • based on a dismissal procedure initiated by the employer in the following cases:
    • the dismissal may be ordered for reasons pertaining to the employee’s person (i.e. disciplinary dismissal; dismissal in case the employee is not professionally fit for the position in which he is employed; dismissal following a decision of the competent medical examination bodies, physical and/or mental incapacity of that employee has been established) OR,
    • for reasons that do not pertain to the employee’s person (i.e. restructuring of the job position held by the employee, etc.).

Notice period

The individual employment contract can be ceased by notice given by each party. The termination notice period depends on the position ‒ management or execution.

The notice period in case of termination upon employee’s request is the following:

Execution position
20 working days

%
Management position
45 working days

%

Social contributions and income tax

Currently, the minimum monthly gross base salary is RON 3,300.

*Exceptionally, for employees in the construction sector, the minimum monthly gross base salary is RON 4.582, and in the agricultural and food industry sector, the minimum monthly gross base salary is RON 3.436.

The employer is obliged to compute, withhold and pay monthly the social security contributions and the personal income tax for its employees. The payment of them is processed by the company by 25th of the following month for which the payroll is processed.

The actual percentage of social security contributions and personal income tax are presented in the table below:

Contributions and income tax Employee Employer
Income tax 10% N/A
Health contribution 10% N/A
Social (Pension) security contribution 25% N/A
Work insurance contribution N/A 2.25%

*For the construction field, agriculture and food industry, respectively IT, there are special provisions applied regarding due taxes and exemptions by case.

Working time and vacation

The normal length of the work time is 8  hours per day and 40 hours per week, usually Monday to Friday, with two rest days, usually Saturday and Sunday. The rule is that the maximum working time for a week cannot exceed 48 hours per week, including overtime hours.

For overtime work, the employee is entitled to paid off hours within the time limit provided by the Labour Code in Romania (90 calendar days) and, if the compensation with paid time off is not possible, the extra work will be paid, during the next month, to the employee by adding a benefit no lower than 75% of the basic wage corresponding to its duration.

Employees are entitled, according to provisions of the Labour Code, to a minimum of 20 vacation days per year (working day, not calendar day).

For medical reasons, the employee is entitled to a medical leave allowance, in percent of 100%, 75% etc.,of the average gross monthly income for the 6 months preceding the period of sickness, depending on the cause of incapacity.

The employer is obliged to pay the remuneration for the first 5 calendar days of incapacity from the medical leave period. The rest of the period is paid by the Romanian state. However, the employer shall credit the state with the amount paid to the employee. In maximum 90 calendar days, the employer is in the position to file a compensation request to the Romanian Health Insurance House for recovering the amounts paid to the employees.

In case of occurrence of special family events, the employees shall be entitled to paid days off which shall not be included in the duration of the rest leave and whose conditions should shall be set forth by the law, applicable collective labour agreement or Internal Regulations of the company.

For solving certain personal circumstances, the employees are entitled to also ask for unpaid leaves in accordance with the provisions of the applicable collective agreement or Internal Regulations of the company.

Most common employee benefits

The most common benefits for employees in Romania are:

meal tickets (meal vouchers)

laptop

private healthcare

travel expenses reimbursed

additional vacation days

gift tickets

mobile phone

gifts for children on several occasions (June 1st, Christmas)

teambuilding programs

Rules for granting meal tickets (meal vouchers):

  • Meal tickets are optional benefits in kind granted by the  employer to those employees having declared their primary employment function within the company.
  • Starting with January 2024, the maximum nominal value of a meal ticket is of RON 40. The value is decided by the employer.
  • Meal tickets value is deductible from the calculation of the corporate and is exempted from paying the social security contribution (pension) due by the employee.
  • Meal tickets value is taxed with the personal income tax (flat rate 10%) and, respectively by the quota of 10% corresponding to the health contribution due by the employee.
  • Are granted only for the effective worked days – 1 meal ticket/day.
  • Are not granted for delegation days with per diem payment or for other type of absences (vacation, sick leave, labour contract suspension etc.).
  • Meal tickets are issued exclusively in electronic/card format.
  • Meal tickets can be used, in compliance with legal provisions, including for online payments.

All the benefits are granted by the employer to the employees through provisions stipulated in the labour contract, the collective contract, Internal Regulation and/or through internal decision, where applicable.

Temporary work

Temporary labour agent

The employment by temporary labour agent is an activity performed by a temporary employee who, at the direction of the temporary labour  agent, carries out an activity for the benefit of a user and at the user’s disposal and under its supervision and management.

A temporary employee is a person working for an employer ‒ temporary labour agent-  and made available to a user for the duration established by the contract services necessary to perform certain, precise and temporary tasks.

The wage received by the temporary employee for each assignment can not be less than that received by the employee of the user, who performs the same work or one similar to that of the temporary employee.

A temporary labour agent is the legal person authorized by the Ministry of Labour, Family and Social Protection that temporarily provides the user with skilled and/or unskilled personnel employed and paid for this purpose.

The user is the natural or legal person for whom or under whose supervision and management a temporary employee placed at disposal by the temporary labour agent works temporarily.

The temporary work assignment shall be established for a period not exceeding 24 months. The duration of the temporary assignment may be extended for successive periods which, in addition to the initial duration of the assignment, may not result in a period exceeding 36 months.

Delegation and posting within the labour contract

According to the Romanian Labour Code, the place of the work may be unilaterally modified by the employer by delegating or posting the employee to another workplace than the one provided in the individual employment contract. During the delegation or posting, the employee shall retain his position and every right set in the individual employment contract.

Employee delegation

The delegation is the temporary exercise by the employee, on employer’s direction, of works or tasks similar to his usual tasks, outside his workplace. A delegation may be directed for a period of maximum 60 calendar days within 12 months and may be extended for successive periods, with the consent of the employee, for maximum 60 calendar days.

A delegated employee shall be entitled to the payment of the transport and accommodation expenses, as well as a delegation benefit, under the terms of the law or of the applicable collective labour agreement.

Posting of employees

Posting is an act by which the employer directs the temporary change of the workplace to another employer, for the performance of certain works in its interest. By way of exception, the type of work may be changed during the posting, but only with the written agreement of the employee.

The posting may be directed for a period of maximum one year. By way of exception, the period of the posting may be extended every six months, with the agreement of both parties, for objective reasons that require the presence of the employee with the employer where the posting was directed. An employee may refuse the posting directed by his employer only by way of exception and for duly justified personal reasons. 

The rights due to a posted employee shall be provided by the employer where the posting was directed.  During the posting, an employee shall enjoy the rights more favourable to him/her ‒ either the rights with the employer directing the posting, or the rights with the employer he/she is posted to. 

The employer providing the posting must take all measures necessary so that the employer where the posting was directed fulfils completely and in good time all obligations towards the posted employee.  

Cross-border posting

The cross-border posting is regulated by several European Directives, including the Directive 96/71/EC, transposed in Romania by Law no. 16/2017. These legal provisions regulate posting on the territory of EU Member States or on the territory of the Swiss Confederation.

An essential element of distinction between the two concepts is on the effects of posting towards labour contract. In the case of posting governed by the Labour Code, there is a suspension of the labour contract during posting (which implicitly assumes the suspension of payment of wages by employer).

In case of cross-border posting, the labour contract with employer that posts is actively maintained. In this case, the salary will remain in pay at the seconding employer.

Professional health and safety

The Company has the obligation to ensure the employees’ safety and health („SHW”) relevant instructions in all aspects related to work/ job positions.

The Company has to ensure that each worker receives sufficient and appropriate training in the field of SHW, especially by receiving the pieces of information and work instructions, specific to both the workplace as well as their position:

  • upon employment;
  • upon change of job or transfer;
  • when introducing a new work equipment or some changes to the existing equipment;
  • upon the introduction of any new technology or work procedure;
  • when performing special duties.

The workers’ training in the field of safety and health at work includes 3 phases:

  • introductory-general training;
  • on-the-job training;
  • periodical training.

Introductory-general training is done when hiring the employee or when posting or delegating them from one company and/or unit to another;

On-the-job training is done after the introductory-general training and aims to present the risks for safety and health at work as well as the measures and actions taken to prevent and protect the employees for each workplace, work station and/or each function exercised.

Periodic training is given to all workers and aims to refresh and update knowledge in the field of safety and health at work.

Prevention and protection activities

The employer is responsible with organizing the prevention and protection activities, in the following ways:

a) by the assumption by the employer of the duties for carrying out the measures provided by law, (but only in the case of micro-enterprises and small enterprises, in which activities are carried out without particular risks, with a number of up to a maximum of 49 employees inclusive); or

b) by designating one or more workers to deal with prevention and protection activities; or

c) by establishing one or more internal prevention and protection services; or

d) by calling on external prevention and protection services.

Overview of applicable legislation

  • Romanian Labour Code (Law 53/2003, republished with subsequent amendments and additions);
  • Law no. 16/2017 on the posting of employees in the framework of the provision of transnational services;
  • The Order of the Ministry of employment no. 2171/2022 for the approval of the framework model of the individual employment contract;
  • Law no. 227/2015 regarding the Fiscal Code, republished with subsequent amendments and additions ;
  • Law no. 202/2002 regarding the equality of chances between women and men;
  • Government Decision no. 900/2023 for the establishment of the minimum gross basic salary per country guaranteed in payment.
  • Government Emergency Ordinance No. 93/2023 for the establishment of the minimum gross basic wage per country guaranteed in payment for the construction, agricultural and food industry sectors;
  • Law No 319/2006 on safety and health at work, as amended and supplemented.

In order to set up a company in Romania, you first need to choose the type of business form, to prepare the file and to submit the application at the Trade Register. Note that the most common forms of business in Romania are the Limited Liability Company along with the Joint Stock Company and Branches.

Download our 2024 Company formation guide for more information, or read more below

Legal forms of business, minimum capital, contribution

The type of business forms available in Romania are summarized below with their specific information: the minimum share capital, the liability of the shareholders/stockholders, the minimum number of shareholders/stockholders.

The most common forms of business used in Romania are the Limited Liability Company along with the Joint Stock Company and Branches.

General Partnership (Societate in nume colectiv | S.N.C.)

  • There is no minimum share capital required.
  • A General Partnership must have 2 or more shareholders.
  • The shareholders have unlimited and joint liability for social contributions.

Limited Partnership (Societate in comandita simpla | S.C.S.)

  • There is no minimum share capital required.
  • The Limited Partnership must have at least one limited partner and at least one general partner.
  • The limited partners have no management authority and they are not responsible for the debts of the partnership. They respond in the limit of the subscribed shares.
  • The general partners have management control and they have joint and several liabilities.

Limited Liability Company (Societate cu raspundere limitata | S.R.L.)

  • The share capital is divided into equal shares and, according to Law no. 31/1990, it cannot be less than 1 RON.
  • A Limited Liability Company in Romania may have between 1 and 50 shareholders.
  • The shareholders are liable in the limit of the contribution to the share capital.

Joint Stock Company (Societate pe actiuni | S.A.)

  • The minimum capital cannot be less than the RON equivalent of EUR 25,000.
  • The Joint Stock Company must have 2 or more stockholders.
  • The stockholders are liable in the limit of the subscribed shares.

Company Limited by Shares (Societate in comandita pe actiuni | S.C.A.)

  • The required minimum capital cannot be less than the RON equivalent of EUR 25,000.
  • The Company Limited by Shares must have a minimum of 2 stockholders.
  • The limited partners have no management authority and they are not responsible for the debts of the partnership. They are liable in the limit of the subscribed stocks.
  • The general partners have management control and they have joint and several liability.

Branch (Sucursala)

  • There is no share capital or shareholders required for establishing a Branch in Romania.
  • The Parent Company is liable for its branch.

Sole Entrepreneur (Persoana Fizica Autorizata)

  • There is no share capital required for registering as a Sole Entrepreneur.
  • The Sole Entrepreneur is also the sole responsible.

Minimum documentation

Companies can be incorporated by natural persons or legal entities and must register to the territorial Trade Register. Certain activities need prior authorization (e.g. credit institutions, insurance brokers, companies which produce, sell firearms and ammunition, pension entities). Certain activities need to be authorized after the registration of the company (e.g. work agent, transportation).

The main document needed for incorporating a company is the articles of incorporation. This document must specify the following:

company form and name and its registered seat

the company’s business (main) activities (certain activities require special permits)

representation of the company, the method of signing in the name of the company

the duration of the company, if founded for a fixed period of time

the identification data of the shareholders, and in the Limited Partnership will be indicated also the shareholders limited

the amount of the equity capital, the method and date of its availability

shareholders representing and managing the company or non-associated directors, their identification data, the duration of the mandate, the powers conferred on them and whether they are to exercise them jointly or separately

details identifying the beneficial owners and how the company control is exercised, if applicable

all other items relevant to the given form of business as required by the applicable laws in force

The types of documents requested by the Trade Register for the company establishment are:

  • Proof of verification of company name availability and its reservation thereof
  • articles of incorporation for the incorporated company
  • excerpts issued by the Trade Register where the shareholders are incorporated- legal entities
  • the identity document of the shareholders natural persons
  • passport or ID of the future director of the Romanian company
  • the document attesting the right of use over the space with destination of registered office ( e.g. lease agreement) and the ownership property documents
  • standard application form(s)

On the incorporation, the company in registered with the Romanian Fiscal Authorities by submitting the registration request with the Trade Register. However, in order to choose the appropriate tax regime, subsequent formalities with the tax authorities are necessary to be performed.

Registration process and registration time

The incorporation procedure of a Romanian company consists mainly in:

  • reserving the name of the company
  • drafting the relevant documents (mainly articles of incorporation of the company and shareholders and directors’ statements)
  • filling the registration application within the Trade Register

The registration of a company is mandatory in Romania.

  • The incorporation procedure must be initiated by request.
  • The registration request must be filed with the competent Trade Register Office.
  • Company registration request may be submitted with qualified electronic signature via the Trade Register portal or at any of the Trade Register offices.

After submitting the complete file to the Trade Register, the request is usually processed within one working day from the date of registration of the application. Sometimes, the approval of the file may be delayed, because additional documents/information are requested by the registrar who will handle the request.

The same term applies also for approval of mentions (e.g. update of the Articles of Incorporation, revocation of directors, appointing of directors, relocation of headquarter).

A newly registered company must also register with the Social Security Authorities and Labour Authorities (in case it has employees).

In order to voluntarily liquidate and dissolve a company with the Trade Register, the procedure will take longer than the registration of the company, respectively up to 3 months.

This procedure consists in 2 steps. First, the General Shareholder Meeting resolution will be published in the Official Gazette in order to be brought to the attention of the public and, afterwards, the interested parties may submit an opposition to the liquidation request.

Stockholders/Shareholders (company board)

Regarding the shareholders of different forms of companies in Romania:

  • The shareholders of General Partnership or stockholders of the Joint Stock Company are severally liable for the social obligations.
  • In the LLC’s case, the number of shareholders cannot be higher than 50 and the shareholders are liable only up to the subscribed share capital.

The Joint Stock Company is managed by one or more directors. Joint stock companies, whose annual financial statements are subject to audit legal obligations, are managed at least by three directors.

The Limited Liability Company is managed by one or more directors, appointed by the Articles of incorporation or by General Meeting of Shareholders.

As a general rule, the role of the director is performed by a natural person. In its current form, Law no. 31/1990 establishes that a legal person can be appointed as director, but it is required to appoint also a natural person, as representative.

General overview of corporate taxes

Tax rates

The standard corporate income tax rate in Romania is 16% and the standard VAT rate is 19%.

Romanian taxpayers that are carrying on activities such as gambling and nightclubs are either subject of 5% rate from the revenues obtained from such activities or 16% of the taxable profit, depending on which is higher.

Besides the VAT 19% rate, the following reduced rates would apply:

  • 9% for restaurant and catering services, hotel accommodation, water, food, save for food containing a certain amount of sugar, beverages, save for alcoholic beverages, medical treatments, prosthesis, housing under certain conditions, etc.
  • 5% for schoolbooks, newspapers, magazines, admission fees to castles, museums, sport events, etc.

Registration requirements

VAT registration for taxable persons having the place of business activity in Romania should be performed when the annual turnover of EUR 88,500 (RON 300,000) is exceeded.

Voluntary VAT registration before the threshold is exceeded is also possible. The VAT registration procedure is complex, and several types of documents are required. Non-resident taxable persons established in Romania through fixed establishments and non-residents having no actual presence in Romania can register without observing the above threshold. However, a VAT number must be in place before the commencement of the economic activity.

A taxable person not registered for normal VAT purposes in Romania and not required to register is liable to request the special VAT registration in the following situations:

  • purchase of services from persons established outside Romania having the place of supply in Romania
  • supply of services with place of supply in another EU Member State
  • intra-community acquisitions of goods from another EU Member State cumulatively exceeding the annual threshold of EUR 10,000 (RON 34,000)

Fees and penalties

The incorporation of the company, the mentions or the liquidations are tax free as per Law no. 265/2022.

Amounts for publishing the documents (e.g. resolutions, Articles of incorporation) in the Romanian Official Gazette will apply.

Investment incentives

Special taxation of micro-enterprises

The microenterprise regime is optional and may be enjoyed by all companies obtaining revenues below the threshold of EUR 500,000 computed at the NBR exchange rate valid for the last day of the financial year and met several other criteria (e.g. revenues from consulting and management services lower than 20% out of the total revenues, one minimum employee etc.).

The microenterprise tax rate applicable is 1%.

Income tax exemption for programmers

Main conditions

A company that conducts creative activities of computer programs for trading purpose can benefit of (salary) income tax exemption for its employees engaged in such activities, up to a limit of Lei 10,000 gross per month under certain conditions provided by law. The tax exemption is granted only for Romanian entities that perform the creation of computer programs to achieve a final product or a component of the final product for trading purposes. 

Starting with February 1st, 2018, tax exemption in the IT industry is also granted to those employees who do not have a bachelor’s degree at all but are enrolled at a university (not necessarily on the IT area), as well as to those who have graduated superior education programs with a short duration. The main condition is that these employees perform one of the activities stipulated in the local legislation, otherwise they cannot benefit from the tax exemption.

Other aspects

Opening a bank account

For a Romanian company it is mandatory to have a bank account. For opening a bank account, the legal representatives’ personal presence is mandatory at the opening. In the previous years, the banks also accepted a special notarized Power of attorney for another individual, but this practice changed and usually, at the opening, they request the presence of the administrator of the company.

Subsequent modifications in the statute of the company

All modifications regarding the statutory information of the companies (change of registered seat, mandate of directors, change of the shareholders or directors etc.) need to be registered at the Trade Register in 15 days as of the amending deed.

Unique European identifier (EUID)

All Romanian companies receive, beside the unique registration number and the Trade Register identification number, the unique European identifier (EUID).

Through the system of interconnection of the Trade Register institutions in Europe, documents and information relating to the professionals registered in the Trade Register of each country are made available to the public. It will be possible to obtain information on identification and status of a company in the European Union and to obtain copies of certificates of electronic documents.

Affecting both domestic and foreign businesses, a number of actions triggers the obligation to register for value-added tax in Romania. To provide a basic overview, our Romanian experts prepared a comprehensive eBook on value-added tax. Find out more about VAT rates, registration of taxable persons, communication with local tax authorities, compliance and VAT return filing, VAT refund to EU member states or third countries and penalties.

Download our free eBook on VAT in Romania, or read more below

VAT rates

Basic and reduced VAT rates

The basic VAT rate in Romania is 19%, but a reduced rate of 9% applies to the food and beverage industry, save for food / beverages containing a certain degree of sugar and alcoholic beverages, medical treatments and prosthesis, accommodation, supplies of social housing under certain conditions and admission fees to castles, museums, sport events and cinemas. An extra-reduced 5% rate applies to schoolbooks, newspapers, magazines.

Export within and outside the European Union

The supply of goods to other EU member states are exempt from VAT. In order to apply this exemption, the buyer should be registered for VAT purposes in the other EU member state while the transport of goods to the other EU member state should be justified with a set of required documents.

Starting January 1, 2020, such back-up documentation was aligned at the level of the European Union, therefore such documents required by the tax authorities should be the same in each and every EU Member State.

Deliveries of goods outside the EU are being considered as exports for which the same VAT exemption would apply. In order to apply such exemption, back-up documentation would be required function of the statute of the party involved in the transaction (i.e. supplier or beneficiary).

Taxable amount

The taxable amount to which the relevant quota of VAT would apply equals the total consideration obtained or to be obtained for a supply, including any excise duties or other taxes and fees.

VAT registration of domestic taxable persons

Voluntary and mandatory registration

In Romania, voluntary registration for VAT is possible and may be performed by any taxable person with the headquarter of the economic activity in Romania and currently conducts or intends to carry out economic activity falling within the scope of VAT.

Regarding the mandatory VAT registration, a threshold of EUR 88,500 annual turnover is provided.

The application for VAT registration is made within 10 days from the end of the month in which this threshold is reached or exceeded.

Group registration for taxable entities

Group registration for VAT is available for entities in Romania under certain conditions.

Other specifications of the VAT registration

According to the legislation in force, Romanian tax authorities have the right to register ex officio for VAT purposes those taxable persons that register an annual turnover of at least EUR 88,500 and have not requested the registration as per the law.

Besides the mandatory registration, Romanian taxable persons would have to register for VAT purposes before performing intra-Community transactions, under certain conditions, for the purposes of service delivery to other EU member states, or for the purposes of acquiring goods or services from other EU member states. The registration must be done in advance.

VAT registration of foreign taxable persons

Definition of foreign taxable persons

Foreign persons are taxable person whose seat, place of business or fixed establishment is located outside Romania.

Mandatory registration for foreign taxable persons

Before starting an activity in Romania that is subject to VAT, any foreign taxable person should register for VAT purposes in Romania.

In case of distance sales activity, the threshold for VAT registration is of EUR 10,000 as per the new One Stop Shop system. However, the threshold takes into consideration also other transactions, therefore an analysis is required.

Communication with authorities

Local statutory representation for VAT

In Romania, local representation by a tax advisor is not mandatory.

Statutory language

Only Romanian language may be used for communication with the tax authorities.

Communication with authorities

A taxable person may communicate with the tax authorities in electronic format, through the virtual space of the taxpayer, or on the online platform of the tax authority.

However, the electronic communication requires a certified electronic signature.

VAT compliance and return filing

Tax period and deadline for VAT return filing

In Romania, the standard fiscal period is the calendar month.

For taxable persons whose previous year-end turnover is lower than EUR 100,000 and did not perform intra-community transactions, the fiscal period is the calendar quarter.

The VAT return should be filed no later than 25th day following the respective tax period.

EC sales list and other documents

The EC list shall be filed until the 25th day following the respective tax period. In addition, the informative return for domestic transactions should be provided as well.

VAT refund to EU member states

Minimum amount and applicable period

If the VAT refund request concerns a period of less than one calendar year, but greater than 3 months, the amount of VAT for which the refund is requested may not be less than the RON equivalent of EUR 400.

However, if the request refers to a period of one calendar year or the remaining period of the calendar year, the amount of VAT may not be less than the RON equivalent of EUR 50.

Value of VAT for shorter periods
400€

%
Value of VAT for the calendar year
50€

%

The period for which the VAT is refunded may be maximum one calendar year and minimum 3 calendar months. Refund requests may, however, concern a period of less than 3 months if this is the period remaining until the end of the calendar year.

Deadline and place of filing for VAT refund

The request for refund should be transmitted electronically at the latest by September 30 of the calendar year following the refund period. The request should be filed at the local tax authority of the foreign taxable person.

Refund for foreign taxable persons

The VAT refund is possible for foreign taxable person if certain conditions are met.

VAT refund to third countries

VAT refund conditions

The VAT refund is possible concerning third countries if certain conditions are met.

Minimum amount and applicable period for VAT refund

VAT refunds to third countries are subject to the same rules as refunds to EU member states.

Value of VAT for shorter periods
400€

%
Value of VAT for the calendar year
50€

%

Nevertheless, another mandatory condition is that between Romania and that third party to be concluded a specific mutual agreement.

Deadline and place of filing for VAT refund

The request for VAT refund should be submitted by September 30 of the subsequent calendar year following the refund period. The request should be submitted to the registry office of the tax authorities or by post. The deadline for issuing the decision is 6 months starting from the date the tax authority has received the entire documentation.

Penalties for VAT non-compliance

The penalties for non-compliance may be the following:

  • Fines between approx. EUR 200 and EUR 1,000
  • Interest for late payment 7.3% p.a.
  • Penalties for late payment 3.7% p.a.
  • Penalties for non-declaration 29.2% p.a.

Our salary calculator for Romania does not apply to employees from the construction field. For this particular employees, the minimum gross wage is RON 4000 and special provisions are applied based on the Romanian legislation.

An amount of RON 200 is deducted from the calculation base of the Pension and Health insurances and income tax, applicable only for full time employees with labor contract salary equal to RON 3300 gross (minimum gross salary per economy), but not exceeding total gross income of RON 4000, at the employment main job.

Disclaimer

The calculator has been set for simulation purposes only and does not include all factors that might influence the end salary, according to the Romanian laws.

Accace is not responsible for any person’s or entity’s action taken based on the results of the present calculator. We highly recommend you consult a specialist in any matters related to salary, employee rights and employment in Romania.

Romania – a market with strategic location, vast potential and well-educated workforce, offers numerous possibilities for foreign investors who are thinking about entering the European market or expanding their business in the region.

The IT industry, being one of the largest and most profitable industries in Romania, benefits from attractive investment incentives. For instance, employees working in IT&C companies have an income tax rate of 0%. Moreover, local tax exemptions apply for investors setting up manufacturing locations or offices in industrial, scientific or technological parks.

Download our eBook providing an informative overview about Romania, or read more below

Industries and investment incentives

Industries

The IT industry is one of the largest and most profitable industries in Romania, having also strong workforce given the technical and IT educational environment.

The following industries have the strongest workforce in Romania:

IT

medical

engineering

Investment incentives

IT&C companies are favoured by investment incentives in Romania. The income tax for employees working in IT&C companies is 0%, in compliance with the Romanian current legislation.

In addition, investors setting up manufacturing locations or offices in an industrial, scientific or technological park benefit from some exemptions on local taxes.

Employees who have income in the agricultural and food industry can be supported by fiscal incentives. Taxpayers that are performing R&D activities may also enjoy tax incentives in the area of corporate income tax and salary tax.

Company formation

The most common form of business in Romania is the Limited Liability Company (or LLC in short). The minimum required capital for setting up an LLC is only RON 1.

An LLC in Romania can have between 1 and 50 shareholders. The shareholders respond in the limit of the contribution to the share capital.

A Limited Liability Company can be founded by natural or legal entities and must be registered to the Trade Register.

The limited liability company may be managed by one or more directors, separately or together, appointed within the Article of Association and which can be revoked by shareholders’ resolution (GSM/EGSM) or by the sole shareholder’s decision, as the case may be.

Certain activities need prior authorization (e.g., credit institutions, insurance brokers, companies which produce and/or sell firearms and ammunition, pension fund).

Certain activities need to be authorized after the registration of the company (e.g., temporary work agents, companies that require transportation licence).

The main document, needed for incorporating a company, is the ”Articles of Incorporation”. This document must contain the following aspects:

  • company’s name and its registered seat
  • a list of the company’s members, with their respective addresses, date of birth, personal tax number
  • the company’s business (main) activities (certain activities require special permits)
  • the amount of share capital and distribution
  • representation of the company, the method of signing in the name of the company
  • identification data, the duration of the mandate, the powers conferred on them and whether they are to exercise them jointly or separately details identifying the beneficial owners and how the company control is exercised, if applicable
  • the duration of the company, if founded for a fixed period
  • all other items are relevant to the given form of business as required by the prevailing act of law

The incorporation procedure of the Romanian company consists mainly in:

  • reserving the name of the company
  • drafting the relevant documents (mainly constitutive act of the company and shareholders and directors’ statements)
  • filling the registration application within the Trade Register

The registration of a company is mandatory in Romania:

  • the incorporation procedure must be initiated by request.
  • the registration request must be filed with the competent Trade Register Office.
  • company registration request may be submitted with electronic signature via the Trade Register portal or at the registrar’s office of the authority.

There are no fees applicable for the Trade Register, however Official Gazette fees for publishing documents will be applied.

After submitting the complete file to the Trade Register, the request is usually processed in 3 working days. Sometimes, the approval of the file may be delayed because additional documents are requested by the Trade Register’s referents. The website of the Trade Register where online request can be submitted is https://portal.onrc.ro

After the incorporation, the company must register within the Romanian Fiscal Authorities in 30 days and open the bank account.

Corporate taxes

Corporate income tax

  • 16% is the standard rate of corporate income tax in Romania
  • 16% rate applies to taxpayers that carry on activities such as gambling and nightclubs on the taxable profit, or
  • 5% is the rate that is applied to taxpayers that carry on activities such as gambling and nightclubs on income received from such activities, depending on which is higher

The tax period in Romania can be either the calendar or fiscal year, which may differ than the calendar year

Taxpayers must submit their quarterly CIT returns by the 25th day of the first month following the first, second, and third quarters. The annual CIT return is due by March 25 of the following year for which the CIT is due in case the fiscal year equals the calendar year. For 2023, the deadline was extended to 25th of June. In case the fiscal year is different than the calendar year, the annual CIT return is due by the 25th day of the third month after the end of the company’s fiscal year.

A company is considered as resident in Romania if:

it is set-up under the Romanian law, or

it has its legal seat in Romania, or

its place of effective management is in Romania.

VAT

  • 19% is the standard VAT rate in Romania
  • 9% the reduced rate applies to medicines, water, food and beverage industry – save for alcoholic beverages and beverages with a high concentration of sugar, restaurant and catering services, hotel accommodation, etc.
  • 5% an extra-reduced rate applies to supplies of social housing under certain conditions and to schoolbooks, newspapers, magazines, admission fees to castles, sport events, museums, cinemas, etc.

VAT registration

Romanian tax residents are required to register for VAT when their annual turnover exceeds EUR 88,500 (RON 300,000). Voluntary VAT registration before the threshold is exceeded is also possible.

Non-resident taxable persons established in Romania through fixed establishments and non-residents having no actual presence in Romania can register for VAT without exceeding the threshold of EUR 88,500 (RON 300,000) on annual turnover or may be even required in certain specific cases.

A taxable person that is not established in Romania performing intracommunity distance sales of goods to Romania (mail order business) to any non-taxable person or a person not registered for Romanian VAT, shall either register for VAT purposes in Romania if the annual volume of intracommunity distance sales, as well as the volume of telecommunication, broadcasting and electronic services cumulatively exceed the EUR 10,000 threshold. Alternatively, the One-Stop-Shop regime that was designed to avoid VAT registration in multiple EU countries may be applied if the prerequisites are met.

Other taxes

Excise tax

Energy tax

Property tax

Road tax

Real estate tax

Wealth tax

Any type of local or regional income tax

Any other type of taxes not mentioned above

Labour law and employment

Entitlement to work

According to article 10 of Law no. 53/2003 (Labor Code), the Individual Employment Contract is the agreement based on which a natural person, referred to as the employee, undertakes to perform work for and under the authority of an employer, natural or legal person, in exchange for payment.

As such, any natural person can be employed, regardless of whether they are a Romanian citizen, a foreign citizen, stateless person or a refugee.

According to the Romanian law, the future employee must be at least 16 years old to be able to conclude an individual employment contract.

For teenagers who have reached the age of 15, such a contract can be concluded only with the consent of the parents or legal representatives and only if the job does not endanger their health.

Employing a person under the age of 15 is strictly prohibited in Romania. In addition, work in difficult or dangerous conditions cannot be performed by persons under the age of 18.

Employment contracts

In Romania, the individual employment contracts can be classified according to several criteria, as follows:

Duration

The Individual employment contract concluded for an indefinite period

This type of contract is regulated by art. 12 para. 1 of the Labour Code and represents the rule regarding the duration for which the individual employment contracts are concluded. This assumption is regulated by the Romanian law as a means of employee protection.

Individual employment contract concluded for a fixed period

In accordance with the provisions of art. 82-87 of the Labor Code, the individual fixed-term employment contract will be concluded in writing and will expressly contain the period for which the contract is concluded, a period that cannot exceed 36 months (3 years).

The individual employment contract can be concluded for a determined duration only in the following cases:

  1. replacing an employee whose employment contract is suspended, except for the case in
    which that employee participates in the strike;
  2. the increase and/or temporary modification of the structure of the employer’s activity;
  3. carrying out seasonal activities;
  4. in the event where the employment contract is concluded based on legal provisions issued
    with the aim of temporarily favoring certain categories of unemployed persons;
  5. employment of a person who, within 5 years from the date of employment, meets the
    conditions for retirement due to the age limit;
  6. occupying an eligible position within trade unions or non-governmental organizations, during
    the term of the office;
  7. the employment of retirees who, under the law, can cumulate the pension with the salary;
  8. in other cases, expressly provided by special laws or for carrying out works, projects or
    programs.

Between the same parties, no more than 3 individual fixed-term employment contracts can be concluded successively. Individual fixed-term employment contracts concluded within 3 months of the termination of a previous fixed-term employment contract are considered successive contracts and cannot have a duration greater than 12 months each.

Number of working hours

Full-time employment contract

This type of contract usually involves a work schedule of 8 hours per day, i.e., 40 hours per week, in principle from Monday to Friday (inclusive).

Part-time employment contract

This type of contract assumes that the number of normal working hours, calculated weekly or as a monthly average, is lower than the number of normal working hours of a comparable full-time employee.

Such an agreement must include provisions related to the duration of the work and the distribution of the work schedule, the conditions under which the work schedule can be changed and the prohibition to work overtime, except in cases of force majeure or for other urgent works intended to prevent the production of accidents or removing their consequences.

If these elements are not specified in an individual part-time employment contract, the contract is considered to be concluded for full time.

These types of contracts, in turn, can be concluded either for an indefinite period or for a fixed period.

Place of activity

On-site

An employment contract is considered concluded for on-site work if the employee must perform his activity either at the employer’s headquarters or one of its workstations.

Work-from-home

The work-from-home contract is regulated by art. 108 para. (1) of the Labor Code and implies that the employees must perform their duties at their domicile or place of residence. In this case, the employee sets his own work schedule, observing the deadlines and the number of hours provided in the contract.

The work-from-home employment contract is concluded only in written form and must contain, apart from the provisions specified in art. 17 para. (3) of the Labor Code, the following:

  1. the express statement that the employee works at home;
  2. the program within which the employer is entitled to control the activity of his employee and
    the concrete way of carrying out the control; and
  3. the employer’s obligation to ensure the transport to and from the employee’s home of the
    resources and materials they use in their activity, as well as of the finished products they
    make.

Teleworking

Telework is the type of work organization through which the employee, on a regular and voluntary basis, fulfils the duties required by their position, occupation or job they hold in a place other than the workplace organized by the employer, using information and communication technology, as regulated by the provisions of art. 2 of Law no. 81/2018 on the regulation of telework activity.

In the case of telecommuting, the individual employment contract contains, apart from the elements provided for in art. 17 para. (3) of Law no. 53/2003, republished, with subsequent amendments and additions, the following:

  1. the express statement that the employee fulfils their duty in telework regime;
  2. the period and/or days in which the teleworker carries out his/her activity at a workplace
    organized by the employer;
  3. the program within which the employer is entitled to verify the activity of the teleworker and
    the specific way of carrying out the control;
  4. the method of highlighting the working hours provided by the teleworker;
  5. the responsibilities of the parties depending on the place/places of the telework activity,
    including the health and safety responsibilities, in accordance with the provisions of art. 7
    and 8;
  6. the employer’s obligation to ensure the transport to and from the place of the telework
    activity of the materials that the teleworker uses in his activity, as the case may be;
  7. the employer’s obligation to inform the teleworker about the provisions of the legal
    regulations, from the applicable collective labour agreement and/or the internal regulation, in
    the matter of personal data protection, as well as the teleworker’s obligation to comply with
    these provisions;
  8. the measures taken by the employer so that the teleworker is not isolated from the rest of
    the employees, which ensures him the opportunity to meet with his colleagues on a regular
    basis;
  9. the conditions under which the employer bears the expenses related to the telecommuting
    activity.

An employment contract that does not require the physical presence of the employee at the employer’s premises gives the employee the same rights as those who work at the employer’s premises.

In Romania, there is another type of individual employment contract, namely the apprenticeship contract. This type of the contract is regulated by the provisions of art. 208-210 of the Labour Code. In this case, the employer will pay the employee a salary, but will also undertake to provide him with the necessary training for the job qualification, for a certain period.

Not least, art. 88 of the Labour Code, regulates one more type of work, namely work through a temporary work agent. In this situation, the work is performed by a temporary employee who performs the work for a final beneficiary, following the disposition of the temporary work agent.

Employee taxes and contributions

In Romania, the beneficiaries of income from salaries and salary assimilated income owe a monthly, final tax, which is computed and withheld at source by the payers of the income amounting to 10% of the Beneficiary’s income, computed according to the provisions of art. 78 of the Fiscal Code.

According to art. 80 of the Fiscal Code, payers of salaries and salary assimilated income have the obligation to compute and withhold the tax related to the incomes of each month on the date of payment of these incomes, as well as to pay it to the state budget up to and including the 25th of the month following the one for which these revenues are paid.

In accordance with the provisions of art. 81 of the Fiscal Code, payers of salaries and salary assimilated income have the obligation to file a monthly tax return for each income beneficiary, until the monthly deadline i.e., up to and including the 25th of the month following the one for which the taxes are paid.

An individual is considered a tax resident under the following conditions:

  • they have a permanent home in Romania, which can be owned or rented or remain in any way available for said person and/or his/her family;
  • they have residence in Romania;
  • they are present in Romania for a period (or more periods) exceeding a total of 183 days, during any 12 consecutive months, ending in the current calendar year;
  • they are a Romanian citizen working abroad, as an official or employee of Romania in a foreign state;
  • they have the centre of their vital interests in Romania.

Other elements that are considered when establishing residency in Romania but only together with the elements mentioned above:

vehicle registered in Romania;

driver’s license issued by the Romanian authorities;

passport issued by the Romanian authorities;

the person is insured by the social insurance system in Romania throughout the period in which he/she stays abroad;

the person is insured by the social health insurance system in Romania throughout the period he/she stays abroad.

According to art. 61 of the Romanian Fiscal Code, the types of income that are taxable in Romania are the following:

  • income obtained from independent activities, as defined by art. 67;
  • income obtained from intellectual property rights, as defined by art. 70;
  • income obtained from salaries and salary assimilated income, as defined by art. 76;
  • income obtained from rents, as defined by art. 83;
  • income obtained from capital gains, as defined by art. 91;
  • income obtained from pensions, as defined by art. 99;
  • income obtained from agricultural activities, forestry and fishery, as defined by art. 103;
  • income obtained from prizes and gambling, as defined by art. 108;
  • income obtained from real estate transactions, as defined by art. 111;
  • income obtained from other sources.

The rate of the social security contributions, paid by the employer in Romania is not applicable.

25% is the rate of the social security contributions paid by the employee in Romania in accordance with the provisions of art. 138 of the Fiscal Code.

The employers have the obligation to calculate and withhold the tax related to the social insurance contribution owed by natural person who obtains income from salary and incomes assimilated to salary.

The rate of the health insurance contributions, paid by the employer in Romania is not applicable.

10% is the rate of the health insurance in accordance with the provision of art. 158 of the Fiscal Code.

The employers have the obligation to calculate and withhold the tax related to the health insurance contribution owed by natural person who obtains income from salary and incomes assimilated to salary.

homeapartmentpencilsundatabasecogflagfile-emptygraduation-hatlicensebookbookmarkuseruserscarttagpushpinmap-markermapcalendar-fullsmartphonelaptopheart-pulsepie-chartchart-barsgiftdiamondcoffee-cupleafbriefcasecarwheelchairsmilehourglassdownloadlinkcrosscheckmark-circlecross-circleplus-circlecircle-minus