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With a market of considerable potential, a strategic location, and a well-educated workforce, Romania continues to offer attractive opportunities for investors. However, the beginning of 2025 brings significant challenges due to the economic slowdown and stricter fiscal measures. GDP growth has been significantly lower compared to previous years, reaching only 1.5%, while the budget deficit has risen to 8.6% of GDP, creating additional pressure on the business environment.
Following its accession to the European Union in 2007, Romania continued the process of aligning with European directives, benefiting from funding for modernization and economic development. Nevertheless, in 2025, companies face a more restrictive tax regime, marked by the increase of the dividend tax from 8% to 10%, the reduction of the income threshold for microenterprises from EUR 500,000 to EUR 250,000, and the increase of the gross minimum wage to RON 4,050. These measures have a direct impact on operational costs and require greater focus on tax compliance and financial planning.
While Romania remains an attractive destination for investment, the fiscal environment is becoming more unpredictable, and companies must adapt their strategies to optimize costs and avoid risks associated with new regulations. As a result, outsourcing tax and accounting services is becoming an increasingly relevant solution for ensuring compliance and improving internal efficiency.
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.
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.
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 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% |
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.
| 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:
For definite labour agreements:
| |
| Notice Period |
|
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
Companies operating in the oil and gas sectors are additionally required to pay a supplementary turnover tax of 0.5% of their total revenues.
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.
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.
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.
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:
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.
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.
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.
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.
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.
As a general rule, dividends paid by a Romanian company to another Romanian company are subject to 10% 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.
The applicable WHT rates in relation with non-resident companies are:
As a general rule, dividends paid to non-resident companies are subject to 10% 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.
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.
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.
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.
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:
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:
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.
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.
At this moment, incomes obtained by individuals are taxed with 10%.
Personal income tax regarding incomes from salaries is governed by the Fiscal Code (Law 227/2015).
Romanian State established as income tax free several categories of employees:
Employees with severe or pronounced 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.
The tax period equals the calendar year.
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:
For example, voluntary health insurance premiums and medical services provided through a subscription, as well as voluntary pension contributions covered by employers for their own employees, are tax-deductible for salary tax purposes up to a limit of EUR 400 per year for each category.
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.
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 |
Individuals who meet at least one of the following conditions are considered to be resident individuals in Romania:
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.
The standard VAT rate in Romania is 19%.
A reduced rate of 9% applies to water, food & beverage industry, hotel accommodation, restaurant and catering services, provision of social housing under certain conditions, entrance fees to sports events.
Extra-reduced rate of 5% applies to schoolbooks, newspapers, magazines, including those recorded on electromagnetic or other media, entrance fees to castles, museums, memorial houses, zoos, botanical gardens, and similar institutions.
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.
Legal entities and individuals that carry on independently an economic activity.
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.
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.
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 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:
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.
Starting 1st of January 2024, B2B e-invoicing has become mandatory.
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).
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:
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.
To opt for the microenterprise income tax regime, the following conditions must be met as of December 31 of the previous year:
The tax period equals the calendar year.
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.
For buildings owned by companies, the following tax rates are applicable:
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.
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.
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.
The following categories of taxpayers are liable to pay the special tax on high-value assets:
Tax payment deadlines and submission of tax returns:
Starting January 1, 2025, Romanian and foreign companies owe a construction tax in Romania, calculated by applying a 1% rate to the value of constructions recorded in the company’s assets as of December 31 of the previous year. From this value, the taxable value of buildings already subject to the building tax (as provided by Title IX of the Fiscal Code) will be deducted.
The following products are subject to excise duties: alcohol and alcoholic beverages, manufactured tobacco products, energy products and electricity.
Goods imported from non-EU countries are subject to import customs clearance.
Individuals working 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:
Beyond our free tax guideline for Romania, we’re ready to support you with hands-on expertise tailored to your business needs. Accace offers comprehensive tax advisory and tax compliance services in Romania to help you navigate local regulations, optimize your tax strategy, and stay fully compliant. Whether you’re entering the market or already operating in Romania, our local experts are here to make sure your tax matters are in good hands. Get in touch with us today!
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 regulations and to ensure a smooth transfer of goods and services among related parties, it is necessary to have a sound and coherent policy for Transfer Pricing in Romania.
General rules on Transfer Pricing in Romania have been implemented in the 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 in Romania rapidly increased, that is why we recommend focusing on this area and, especially, on preparation of the proper Transfer Pricing documentation.
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.
Any Romanian taxpayer that carries out transactions with related parties, for both domestic and cross border transactions, is subject to rules of Transfer Pricing in Romania.
Related parties are defined as:
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
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.
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.
Any traditional and other methods of Transfer Pricing in Romania, 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.
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
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) are available under Romanian legislation. APA are valid up to 5 years with possibility of extension in case of long-term contracts.
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.
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.
For non-compliance regarding the preparation and presentation of the Transfer Pricing documentation, penalties are applicable:
Separately, adjustment of tax base plus late payment interest and penalties may be applicable.
To avoid the risk of penalties, partner with a reliable advisor like Accace for transfer pricing services and transaction advisory in Romania.
Regardless if a Romanian employer contracts a Romanian or foreign individual, they must fulfill certain obligations. According to the labour law in Romanian, 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.
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.
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 training 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.
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.
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.
For year 2025, the monthly minimum gross base salary guarantee in payment is RON 4.050. 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 4.050.
Starting with January 2025, employees in the IT, construction and agri-food sectors will no longer benefit from income tax exemptions or reduced social contributions.
The employee is entitled, according to the provisions of the Labour Code, to a minimum of 20 working vacation days per year.
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:
Trial/probationary periods for part-time employment contracts shall not exceed:
A Romanian employment contract can cease as follows:
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:
Currently, the minimum monthly gross base salary is RON 4.050.
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 4.050.
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% |
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 to the employee by adding a bonus to the salary which cannot be less than 75% of the basic wage.
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.
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):
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.
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.
According to the Romanian Labour Code, the work place can be unilaterally modified by the employer by delegating or posting the employee to another work place 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.
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 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.
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.
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:
The workers’ training in the field of safety and health at work includes 3 phases:
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.
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.
Understanding and applying labour law in Romania is essential to maintaining a compliant and productive workplace. At Accace, we provide expert labour law consultancy and payroll services in Romania to help you manage employment relationships, contracts, internal policies, and day-to-day HR administration. With our support, you can confidently handle your employer obligations while staying aligned with local regulations.
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.
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, , accommodation, supplies of social housing under certain conditions and admission fees, sport events. An extra-reduced 5% rate applies to schoolbooks, newspapers, magazines and admission fees to castles, museums, zoos, botanical gardens.
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).
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.
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 VAT is available for entities in Romania under certain conditions.
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 300.000 RON 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.
Foreign persons are taxable person whose seat, place of business or fixed establishment is located outside Romania.
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.
In Romania, local representation by a tax advisor is not mandatory.
Only Romanian language may be used for communication with the tax 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.
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.
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.
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.
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.
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.
The VAT refund is possible for foreign taxable person if certain conditions are met.
The VAT refund is possible concerning third countries if certain conditions are met.
VAT refunds to third countries are subject to the same rules as refunds to EU member states.
Nevertheless, another mandatory condition is that between Romania and that third party to be concluded a specific mutual agreement.
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.
The penalties for non-compliance may be the following:
Dealing with value-added tax in Romania can be complex, especially with frequent legislative updates and detailed reporting obligations. Accace offers comprehensive VAT services in Romania to help you manage VAT registrations, filings, audits, and day-to-day compliance with ease. Our local experts ensure your obligations are met accurately and on time, so you can focus on growing your business with confidence.
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.
Our services for company incorporation in Romania are designed to simplify the process of starting a business. We offer tailored service packages to meet your specific needs, ensuring a smooth and hassle-free incorporation experience. Get in touch with us to find out more.
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.
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:
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.
The incorporation procedure of a Romanian company consists mainly in:
The registration of a company is mandatory in Romania.
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 or the Sole Shareholder decision 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.
Regarding the shareholders of different forms of companies in Romania:
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 or the Sole Shareholder.
As a general rule, the role of the director is performed by a natural person, Romanian or foreign citizen. 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.
The standard corporate income tax rate in Romania is 16% and the standard VAT rate is 19%.
Romanian taxpayers who meet certain conditions (e.g., at least one employee, a turnover of up to 500,000 euros, consultancy and management activities accounting for a maximum of 20% of total revenues, etc.) may qualify for the microenterprise income tax of 1% on turnover.
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:
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:
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.
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%.
Companies doing business in Romania could benefit from the following incentives:
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.
The facility refers to the exemption of corporate tax of the profit re-invested in certain types of assets.
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.
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.
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.
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.
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.
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
Calendar year
The tax return is due by:
25th day of the month following the payment
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
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
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
Doing business in Romania has many benefits: 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%, up to the level of Lei 10,000 gross per month. Moreover, local tax exemptions apply for investors setting up manufacturing locations or offices in industrial, scientific or technological parks.
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, which you should consider when planning on doing business in Romania:
IT
medical
engineering
IT&C companies doing business in Romania are favoured by investment incentives. The income tax for employees working in IT&C companies is 0% up to a limit of Lei 10,000 gross per month, 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 under certain conditions. Taxpayers that are performing R&D activities may also enjoy tax incentives in the area of corporate income tax and salary tax.
The most common form of doing business in Romania is through 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 for doing business in Romania (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:
The incorporation procedure of a company for doing business in Romania consists mainly in:
The registration of a company doing business in Romania is mandatory in the country:
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 doing business in Romania must register within the Romanian Fiscal Authorities in 30 days and open the bank account.
The tax period in Romania can be either the calendar or fiscal year, which may differ than the calendar year
Taxpayers doing business in Romania 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. As an exception, until 2026, the due date for the CIT return is on the 25th of June of the following year, if the tax period 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 doing business in Romania is considered as tax resident 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.
Romanian tax residents doing business in Romania are required to register for VAT when their annual turnover exceeds EUR 60,000 (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 60,000 (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.
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
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 (company doing business in Romania), 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.
In Romania, the individual employment contracts can be classified according to several criteria, as follows:
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.
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:
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.
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).
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.
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.
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:
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:
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.
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:
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:
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.
2.25% is the rate of labour insurance contribution in accordance with the provision of art. 220 of the Fiscal Code.
The employers have the obligation to calculate and pay the tax related to the directly owed labour insurance contribution.
The e-commerce market is booming in Romania, largely due to the fact that an online store can be set up and developed with a smaller investment than physical stores.
Our guide on e-commerce in Romania presents the legal aspects you need to take into account when you intend to start an online business that involves selling products or services.
The first step to be taken before opening an e-commerce in Romania is to register with the Trade Register the entity that will own and manage the shop, and for this there are several options.
Choosing the legal form under which the online shop will operate is necessary in order to issue invoices and to operate under Romanian law.
You can choose to operate an e-commerce in Romania as a legal entity or an individual:
Setting up a D-LLC is similar to setting up an LLC.
For both the establishment of a D-LLC and an LLC, the documents to be filed with the Commercial Registry are:
Depending on the documents submitted in support of the application, additional documents may be requested by the Trade Registry.
Regarding the establishment of a APP, the provisions of GEO no. 44/2008 on the conduct of economic activities by authorized individuals, sole proprietorships and family businesses must be taken into account, each form of activity having its own specificity. This form of marketing is often found among those who have a certain training (e.g. programmers), as GEO 44/2008 specifies the conditions that must be met for each legal form.
After obtaining the registration certificate from the Trade Register, other authorizations will be obtained (depending on the type of products sold through the online shop), such as, but not limited to:
E-commerce in Romania is regulated by Law No 365 of 7 June 2002 republished, and Article 5 lists at least the following information:
All this information, as well as any other that may be necessary or relevant, must be easily accessible, permanently and free of charge. The service provider must display this information in a clear, visible form on the web page through which the service is offered.
From August 2022, traders have a new legal obligation relating to consumer relations. Thus, by Order no. 449/2022 on some measures to inform consumers about alternative dispute resolution, the National Authority for Consumer Protection has established the obligation for all traders to publish on their website an information leaflet on the alternative dispute resolution procedure.
Thus, according to Article 2 para. 1 of the Order: traders who manage websites for sales, online order taking and/or advertising of products and/or services, tourist services, marketing of packages of tourist services or airline tickets, including e-commerce – electronic commerce, are obliged to display on the first page of the website – home page, on the menu bar of the page, the pictograms provided in Annex no. 2 which is an integral part of this Order.
A particularly important aspect to keep in mind and implement for any e-commerce in Romania and merchant operating online is the implementation of the provisions of Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April 2016 on the protection of individuals with regard to the processing of personal data and on the free movement of such data and repealing Directive 95/46/EC (General Data Protection Regulation).
Personal data is any information relating to a natural person, such as name and surname, ID number, address, e-mail, location, telephone number and any other information that can help identify the person.
In carrying out the online commerce activity, the merchant processes the personal data of its customers, thus becoming a personal data controller. In this capacity, the trader has some essential obligations which, if breached, can lead to some of the highest fines in the EU.
The most important obligation would be to publish on the website an updated Privacy Policy, which would provide in a simple, clear and accessible language, the details of the processing of personal data of customers: what types of data are processed, what is the basis of processing, the duration of data storage, the rights of data subjects regarding the processing of personal data.
The trader will also be obliged to provide an address, telephone number or e-mail address at which he can be contacted regarding the protection of the personal data of the data subjects.
The more payment methods there are on an e-commerce in Romania, the greater the convenience for the prospective buyer.
You can opt for:
Delivery by courier is most often used, even if this service means a higher cost of the product. However, it is also possible to send the parcel by post or to collect the product directly from the seller or the post office.
In addition, shipping discounts can be offered, the parcel can be tracked, delivery charges can be set according to price, volume or weight and more.
The Terms and Conditions section is perhaps the most important section that must be included in any online store or e-commerce in Romania, because it is, in fact, the remote contract between seller and consumer.
Like any contract, it must contain, among other things, the following:
The necessary clauses are numerous, which is why, in order to be convinced that nothing important is omitted, it is recommended to call a specialist who can draft the Terms and Conditions section, taking into account all the legal provisions relating to e-commerce.
Applicable law does not require the customer to return the product in its original packaging, this is a limitation on the customer’s right to withdraw from the contract and, unfortunately, most e-commerce in Romania impose this condition. According to the new regulations, more specifically Article 16, point 12 of Law 249/2015, “It is prohibited to condition, in any form, the legal rights of consumers relating to the warranty of the purchased product to keep the packaging.” It should also be noted that the product must be returned with all the accessories with which it was delivered.
Under EU law, if the products purchased turn out to be faulty or do not look as described, the trader must repair, replace, reduce the price or refund the customer.
Buyers have the right to cancel and return their order within 14 days, for any reason and without any justification
How generous are Central and Eastern European countries when it comes to giving a break to employees?
Among European countries in general, there are almost no strong contrasts to be found when it comes to the public attitude towards vacations or using up the alloted leave days by employees. Many businesses consider the days off as a right of each individual to take a well-deserved rest and, in fact, increase their productivity when back at work. Furthermore, achieving an effective work-life balance has become the focus of many companies when defining their vacation policies.
However, regardless the similar attitude towards holidays in general, Labour Codes across the EU still bear some differences in various aspects of employment, concerning also the annual vacation and applicable conditions when it comes to further types of leave.
Our study explores how local legislations treat general terms and regulations related to days off work, such as the entitlement to minimum paid annual leave, public holidays, parental and health-related absence as well as vacation allowances and compensation – including the comparison of 9 European countries. The topics covered touch upon the following:
In the Federation of Bosnia and Herzegovina, employees who established an employment relationship or have a discontinuance of employment longer than 15 workdays, are entitled to min. 20 and max. 30 vacation days, which are granted after 6 months of continuous work. Until the half year is fulfilled, the employee has the right to 1 day off for each month spent working.
Once entitled to the full possible amount of vacation days, employees must take at least one vacation at once with the minimum duration of 12 working days.
In the Republic of Srpska, employees who established an employment relationship or have a discontinuance of employment longer than 30 workdays are entitled to at least 20 vacation days, but extra vacation days can be granted by the employer. The employees are entitled to vacation after 6 months of continuous work. Until the half year is fulfilled, they have the right to 1 day off for each month spent working.
Once entitled to the full possible amount of vacation days, employees must take at least one vacation at once with the minimum duration of 12 working days.
Employees in the Federation of Bosnia and Herzegovina are given altogether 7 working days of additional leave per year, which can be drawn in case of a marriage of the given employee, birth of a child, sickness or death of a close family member or voluntary donation of blood. In the Republic of Srpska, the additional leave for the same reasons amounts to 5 working days.
In the calendar year there are 10 public holidays celebrated in the Federation of Bosnia and Herzegovina and 12 in the Republic of Srpska, however, none of them are included in the paid annual leave; neither are national holidays and weekly rest days.
In Bosnia and Hercegovina, in case an employee’s contract is terminated but their vacation leave was not fully drawn due to the employer, the employer has to pay compensation for the remaining vacation days. There are no further consequences in case the vacation leave is overdrawn by an employee, who’s contract has been terminated, since their employment ends with the termination date as written in their termination agreement.
As for the probation period, which can last up to maximum 6 months, employees have the right to 1 day off for each month worked, unless prior to the date of employment they worked for another employer for more than 6 months and were entitled to a full annual leave.
The compulsory maternity leave lasts for 42 days in the federation of Bosnia and Herzegovina, but mothers may take one full year off after a child is born. Upon agreement, after the 42-day compulsory maternity leave, the father may continue to use the leave (which is considered as the paternity leave) instead of the mother. The same is applicable to the Republic of Srpska, however, the compulsory leave for mothers lasts for 60 days. When an employee draws their maternity or paternity leave, their right to vacation days is dismissed. Upon the employee’s return from the leave, they regain the right to a paid vacation. Parental leave is granted only in case of an adoption of a child, or in case a child with serious developmental disability is born; however, there are no detailed regulations in this regard.
Each employee is entitled to health care and a paid doctor’s visit during their annual leave. This is applicable also to employed pregnant women. As for other employees, there is no limitation for the duration of sick leave, however, it depends on the legal basis of the leave or illness, and on the place of exact residence. A compensation of salary is granted when health-related leave is taken.
The vacation allowance and compensation are regulated individually in the Employment Rulebook by employers. In the Federation of Bosnia and Herzegovina, the allowance is calculated in the amount equalling max. the 50% of the average net salary paid in the preceding calendar quarter. This amount is non-taxable as specified by the Income Tax Law, but the rest above the 50% is subject to taxation. In the Republic of Srpska, the employee receives the vacation allowance in the amount of at least 100% of their average salary from the decisive period, which is subject to taxation.
According to the Croatian Labour Code, after 6 months of work each employee is entitled to at least 4 weeks of vacation leave in a year, which equals to 20 working days. During those 6 months, employees are granted only the proportional amount of overall vacation days.
Each year, one part of the vacation leave must be taken in one block, at least in amount of two weeks, i.e. 10 working days.
Additional leave can be drawn but must be either due to important personal needs such as wedding of the employee, childbirth or death of a close family member. The extra days off can amount to max. 7 working days each year.
In Croatia, there are 14 public holidays in one calendar year as of 2020, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
When a contract is terminated or comes to an end without renewal, an employee receives a compensation for their remaining vacation days. In case an employee’s vacation leave is overdrawn, the employer cannot request a compensation from the employee even though they took more vacation days than entitled to.
Employees who are in a probation period have the right to a proportional amount of vacation days, i.e. to one-twelfth of vacation leave for each full month of work.
During maternity leave, employees exercise the right of compulsory maternity leave for a continuous period of 98 days, of which 28 days are taken before the expected birth and 70 days after the birth of the child. These employees are entitled to vacation days when returning from maternity leave. Parental leave may be drawn after the child reaches 6 months of age and may be used until age 8. As for paternity leave, mothers may pass on their remaining leave to fathers after their compulsory leave.
As for the health-related absence, the employer pays for a sick leave up to 42 days. After that, the sick leave is drawn at the expense of the Croatian Institute for Health Insurance. According to the Labour Code, the minimum amount of the paid sickness benefit is 70% of the salary compensation base, but the employer may also pay a higher amount than obliged. Therefore, an employee is entitled to a salary compensation while on sick leave. As for a doctor’s visit, is treated as a sick leave. Pregnant female employees are entitled to at least 1 examination per month.
When the vacation leave is drawn, an allowance is paid to the employee, calculated from the average monthly salary of the preceding calendar quarter. Due to this calculation, the amount of wage compensation can be affected and increased e.g. by bonus payments and other monetary rewards in the decisive period. If the employee is provided a wage or part of a wage that pertains for a longer period than one calendar quarter (e.g. yearly bonuses) during the decisive period, its proportionate part is used for the calculation of average earnings.
In the Czech Republic, employees are granted 20 working days of vacation leave, or 4 weeks altogether, as specified in the Labour Code. Exceptions concern some professions, such as government sector workers, who are granted 5 weeks or teachers and academic staff with 8 weeks of vacation days.
Requirements for the vacation days to be granted are the following:
If the vacation days are not taken at once in one block, at least one leave must take 2 weeks long, unless agreed otherwise with the employer.
Additional leave is granted in the amount of 5 working days per year to workers who are performing particularly hard work or are exposed to risks of health (further specified in Section 215 of the Labour Code) and had a continuous employment under the same employer for at least one calendar year. In case the one year is not fulfilled, the entitlement of the additional leave is decreased to a proportional part, i.e. one twelfth of annual leave for every 21 days of work.
In the Czech Republic, there are 13 public holidays in one calendar year. They are not included in the paid annual leave, however, employees are entitled to salary compensation for salary loss due to such public holiday. National holidays and weekly rest days are not included in the paid annual leave either.
Additional paid leave can be drawn but must be either due to important personal needs such as wedding of the employee, childbirth or death of a close family member.
In general, when an employee does not draw all their vacation leave in the Czech Republic, the remaining days get transferred to the next year and must be scheduled till the 30th of June.
If an employee’s contract is terminated, but their vacation leave has not been fully drawn, the employee is entitled to a salary compensation for the remaining days of their leave. In some cases, when a new employment immediately follows the terminated one, the remaining leave may be transferred to the new employer upon the employee’s request, based on an agreement between all parties involved.
If an employee’s contract is terminated and their vacation leave has been overdrawn, the employee must return to the employer the salary compensation paid in excess.
During the probation period, the proportional vacation entitlement is applicable. The general basic rule is, however, that not the employee schedules the vacation leave but the employer, who must respect the employee´s legitimate interests and take into consideration their operational needs. Therefore, in principle, the employer may rule out the possibility of taking a vacation during the probationary period either generally or in specific cases, which is then subject to the principle of equal treatment. Regardless, taking vacation proportionately prolongs the probationary period in the amount of days drawn.
Maternity leave, which lasts 28 weeks in the Czech Republic, is considered as work performance for the purposes of leave entitlement, and thus the entitlement for vacation leave emerges during the maternity leave. On the other hand, no vacation entitlement arises during parental leave, which can last up to 3 years of the child’s age, and the allowance may be decreased according to the statutory provisions. The Labour Code allows an employee to take their remaining vacation between maternity and parental leave, but not during any of them.
The paid paternity leave lasts 1 week (i.e. 7 calendar days without interruption) and starts based on the employee’s choice. The paternity leave may be taken within the first 6 weeks from the date of the child´s birth, or from the date when the child is taken into foster care. The father may also take parental leave starting from the day when the child is born.
Regarding health-related absences, an employee is entitled to an unlimited paid time off during medical examination or treatment in a health care institution for the necessary time period, if such procedure is performed in a suitable facility nearest to the employee´s home or workplace and could not have been performed outside the working hours. The same applies to doctor´s visits during an employee´s pregnancy.
As stated above, the vacation allowance equals the proportional part of leave, where less than 1 day is rounded to half a day. The same applies when calculating one twelfth of the leave entitlement.
Salary compensation is calculated in the amount of average earnings, i.e. the average gross earnings from the decisive period (including bonuses and other variable payments), which is the preceding calendar quarter, divided by the hours of work performed in the given period.
The average earnings are ascertained on the first day of the calendar month following the decisive period. In case the employee did not perform work for at least 21 days within the decisive period, probable earnings are taken into consideration according to Section 355 of the Labour Code.
Taking the vacation leave after a quarter when premiums, extraordinary monthly or quarterly bonuses were paid, the value of average earnings is increased based on the calculation. However, this does not apply to the payment of annual bonuses, as those are distributed within the 4 quarters when the average earning is calculated.
Hungarian employees have the right to take 20 working days of vacation leave annually, which is granted in a proportional amount to the time spent at work in the given year. Vacation days are allocated by the employer and should contain at least 14 consecutive calendar days once in a calendar year, when the employee is exempt from work and availability. The weekly rest period, public holidays and any further days off are taken into consideration.
Additional leave is granted to workers according specific criteria, based on:
Additional leave is also granted for employees with reduced ability to work, employees eligible for disability allowance or employees eligible for special aid for the blind and employed minors under the age of 18.
In Hungary, there are 11 public holidays in one calendar year, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
In Hungary, in case an employee’s contract is terminated but they still have remaining days of vacation leave left, compensation shall be provided. No certain rule applies in case an employee’s contract is terminated and their vacation leave has been overdrawn, but the compensation paid in excess might be reclaimed by the employer.
During the probation period, which can last no longer than 3 months, an employee may take vacation leave only based on the employer’s decision. In principle, the employer may rule out the possibility of granting a vacation during the probationary period.
Maternity leave lasts 24 weeks in Hungary and is considered as time spent at work in terms of the calculation of annual leave. Male employees are granted a fathers’ leave of 5 days; in case of twins the amount of extra days off is 7. In both cases, the leave may be drawn only once. Additional unpaid parental leave may be taken for the purposes of taking care of a child up to 3 years of age, or a prolonged unpaid leave for taking a personal care of a child until the age of 10 years.
The Hungarian Labour Code does not specify any entitlement of an employee to a paid doctor’s visit, neither in the case of pregnancy.
Employers are entitled to a salary compensation for the time spent on vacation, which is calculated from the wage base or fixed supplement in effect at the time when the vacation was drawn or from the performance-based wage or wage compensation paid in the preceding six calendar months before the vacation.
According to the Polish Labour Code, employees are entitled to a specific amount of vacation days, based on the number of years worked, such as:
Furthermore, employees in Poland shall draw at least 14 consecutive calendar days at once, which is precisely the half of the overall vacation leave. However, there are no sanctions foreseen for not meeting the obligation and, upon request, the vacation can be shorter than 14 days in bulk, being divided into parts.
Additional paid leave may be granted upon the occurrence of extraordinary family events, mainly:
In Poland, there are 13 public holidays in one calendar year, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
In case the allocated leave has not been drawn in full extent due to the termination or expiry of an employment relationship, an employee shall receive an equivalent compensation. In case the allocated leave has been overdrawn by the employee and their contract has been terminated, the employer cannot reclaim any compensation.
An employee during the probationary period is entitled to a leave proportional to the period they carry out working. They acquire the right to take vacation after each month of work amounting to one twelfth of the leave they are entitled to after one full year of employment.
Maternity leave lasts 20 weeks in Poland, while a compulsory time off is 14 weeks. The length of the leave increases in case of the birth of twins. During maternity, employees retain their vacation rights, whereas the amount of days depend on the number of years worked, just as during regular employment. The vacation leave may be taken all at once, right after returning from maternity leave. In addition, employees are entitled to 32 or 34 weeks, depending on the number of children born in one delivery, while male employees may also take two weeks of paid paternity leave in the first 24 months of the child.
In case a medical examination prescribed by a doctor in connection with pregnancy cannot be carried out outside of working hours, the employer is obliged to grant paid time off to the pregnant employee.
Regarding health-related absences, employees in Poland are not granted a limited amount of days for sick leave, however, the employer reimburses the sick leave up to 33 days of illness per calendar year (or 14 days, in case the employee is aged over 50). After this period, a sickness allowance is paid by the Social Insurance Institute up to 182 days, or 270 in case of tuberculosis or the incapacity to work occurs during pregnancy.
Employees are entitled to remuneration for their vacation leave, in case they fulfilled their working duties during their employment. Remunerations are due for periods no longer than one month and are calculated based on the total amount paid to the employee during the preceding calendar quarter.
If the preceding three months, which are subject to the calculation of the remuneration, include a considerable fluctuation, such as annual bonuses, the salary compensation shall be calculated based on the total amount paid to the employee during a period which does not exceed 12 calendar months preceding the month when the vacation was drawn by the employee.
The remuneration for vacation days are calculated the following way:
In case of substantial differences in the amounts of remuneration within one year, the period over which the basis for assessment is calculated may be extended up to 12 months. Therefore, there is no specific period in a year when taking a vacation is financially more advantageous.
The Romanian Labour Code specifies 20 working days as annual paid leave, which is guaranteed to all employees. Vacation days are granted based on the labour contract and are mandatory in case of employment. While the effective duration of the vacation leave is established in the individual employment contract, in compliance with the law and the applicable collective labour contracts, the minimum duration of the vacation leave defined in general is 20 working days.
If vacation leave is scheduled in fractions, the employer falls under the obligation to do the distribution of vacation in one calendar year in a way that each employee benefits from at least 10 workdays of uninterrupted leave.
Additional leave may be granted up to at least 3 working days per calendar year, according to the following specifications:
In Romania, there are 11 public holidays in a year, counting up to 15 days of lawful holiday annually, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days. Statutory public holidays are considered non-working days.
In case of a terminated employment, the rest of unused vacation days, to which the employee is entitled to, shall be compensated due to the contract termination. The employee who draws more vacation days than entitled to is obliged to return the allowance related to these days, for this allowance represents an undue payment.
During the probationary period, the employee benefits from all the rights provided by the Labour Code, as well as in the individual employment contract. However, it is generally recommended not use vacation days during probation, as this period serves for verifying the employee’s professional and personal skills in order to assess its ability to handle the job.
Maternity in Romania lasts at least 126 calendar days, while the salary received by the female employee is calculated from the amount equal to the 85% of their average salary in the preceding 2 quarters. Male employees are entitled to a paternity leave of 5 workdays within the first 8 weeks after the birth of a child, and additional 10 workdays, if the father of the newborn child has obtained a graduation certificate from a childcare course. Employees may also take up to two years of additional childcare leave.
When establishing the duration of the vacation leave, the periods of temporary incapacity for work related to the maternity leave, the maternal risk leave and the leave for the care of the sick child are considered as periods of activity. Therefore, the respective periods do not affect the number of rest days to which the employee is entitled each year.
Based on the maternity protection at workplace, pregnant employees are entitled to undergo medical examinations during pregnancy up to 16 hours per month without loss of pay, in case the medical check-ups can take place only during working hours.
For health-related reasons, Romanian employees are entitled to medical leave. In case of temporary incapacity for work, employees may take sick leave up to 183 days per year, based on a medical certificate issued by the doctor in accordance to law provisions.
When the vacation days are drawn, an employee is entitled to an allowance which may not be lower than the basic wage, emoluments and permanent additions due for that period, as stipulated in the individual labour contract. This allowance represents the daily average of the wages in the preceding calendar quarter, multiplied by the number of leave days.
According to the Labour Code in Serbia, for each calendar year an employee has the right to no less than 20 working days of vacation. The duration of the leave is determined in the general act and employment contract, while the number of vacation days per year is determined by the work contribution, conditions of work, work experience, professional qualifications and other criteria. Based on that, the min. amount of 20 days of vacation leave may be increased.
The right to vacation arises after a month of continuous work from the stating date of employment. In general, an employee is entitled to one-twelfth of the vacation leave under Article 69 of the Labour Code for each month of work in which the employment either started or got terminated.
The vacation leave can be drawn at once or in two or more parts, based on a mutual agreement with the employer. If an employee takes it in parts, the first part shall be used in the duration of at least two consecutive working weeks during the calendar year, while the remaining shall be used by 30th of June of the following year the latest.
An employee is entitled to take a paid leave from work for a total duration of 5 workdays in a calendar year, which may be drawn either for getting married, due to a spouse’s childbirth, a serious illness of a close family member or in other cases determined by law or the employment contract.
In addition, the employee is entitled to paid leave in the amount of:
Close family members include spouse, children, brothers, sisters, parents, adoptive parent, adoptee or legal guardian. The employer may grant the leave to the employee for relatives other than listed and for other persons who live in the same family household with the employee, for a period specified by the employer. Furthermore, the duration of paid leave may be exceeded upon agreement.
In Serbia, there are 10 public holidays in one calendar year, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
When terminating the employment contract of an employee who did not draw the full amount of their vacation days, the employer shall reimburse the remaining leave. In case the employee took more vacation days than entitled to, the employer can request a compensation. However, this is not common practice.
As for the probation period, an employee gains the right to vacation after a month of continuous work starting from the date of employment.
Female employees during pregnancy are entitled to a leave in case of temporary incapacity due to complication related to pregnancy. During the leave, they are entitled to a salary compensation in the amount of 100% of the average salary from the preceding 12 months.
Maternity leave in Serbia lasts for 3 months and can be extended with parental leave up to additional 9 months. In case of 3 or more children, the leave can be extended with 12 months. Male employees are entitled to 5 days of paid paternity leave (as listed among the additional leave). An employee, who has not taken vacation leave within a given calendar year due to absence from work for maternity leave, the absence for childcare and special child care, has the right to use the remaining vacation leave till the 30th of June at latest of the following year.
When it comes to health-related absence, female employees during pregnancy are entitled to a paid leave from work for medical examinations related to pregnancy, as instructed by a physician, and in accordance with the law, whereof she is obliged to notify the employer in time.
Furthermore, all employees are entitled to salary compensation for the time of absence from work due to temporary impairment lasting up to 30 days, as follows:
The compensation for the annual vacation is calculated from the amount of average earnings in the previous 12 months, in proportion to the number of days of vacation leave. The allowance and compensation are calculated according to the general act and the employment contract. Due to the way of calculation, there is no specific period when the allowance is financially more advantageous.
The basic scope of the paid vacation leave in Slovakia is at least 4 weeks, i.e. 20 working days. The paid vacation leave of an employee who at the end of the relevant calendar year will be at least 33 years old, increases to 5 weeks per year, i.e. 25 working days.
An employee who, during the continuous duration of an employment relationship with the same employer, performed work for at least 60 days in the calendar year, is entitled to a paid leave or a proportional part thereof. Under Section 102 of the Labour Code, the proportional part of the paid vacation leave for each whole calendar month of continuous duration of the same employment relationship shall be one twelfth of paid leave.
An employee who is not entitled to paid vacation nor the proportional part, as they have not performed at least 60 days of work in the calendar year with the same employer, shall be entitled to a paid vacation leave for days worked to the extent of one twelfth of leave for each 21 days worked in the particular calendar year.
At least one part of the paid vacation leave must have a duration of minimum two weeks, according to the Section 111(5) of the Labour Code, unless the employee and employer agree otherwise.
5 working days are granted as additional paid leave according to the Slovak Labour Code for specific professions. For instance, an employee working underground over a whole calendar year in the extraction of minerals, drilling tunnels or passages and an employee who performs particularly difficult or health-endangering work, shall be entitled to additional paid leave of one week. If the employee works under such conditions for only a part of the calendar year, they are entitled to one twelfth of additional paid leave for each 21 days of work.
To be more precise, the additional leave is granted for employees, who are:
These types of particularly difficult or health detrimental professions or workplaces can be found in more details in a generally binding regulation Directive No. 75/1967 Coll. issued by the Ministry of Labour, Social Affairs and the Family of the Slovak Republic and the Ministry of Foreign Affairs and European Affairs of the Slovak Republic on such employees and their compensation for the loss of earnings resulting in the incapacity for work due to certain occupational diseases.
In the Slovakia, there are 15 public holidays in one calendar year, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
In case the vacation leave is not fully drawn by an employee, who’s contract has been terminated, Section 116(3) of the Labour Code allows financial reimbursement of unused leave due to termination of the employment relationship.
If an employee uses all their vacation entitlement for a current year before it is fully accrued, which is possible only with the approval of the employer, they are deemed as not legally entitled to the full vacation leave but only to a proportional part based on the length of the employment relationship in the respective year, and therefore they should return the wage compensation or part to which they are not entitled. In case the employee does not return the wage compensation voluntarily, the amount is deduced from the employee’s wage according to the Section 131(2)(g) of the Labour Code.
During the probationary period, the same rules and conditions apply for vacation rights as for the annual leave in general. According to Section 113(1) of the Labour Code, the employer may let the employee to take a leave, regardless whether the employee met the conditions to be entitled to vacation days, given that they are expected to fulfil them by the end of the calendar year in which the vacation is taken. In conclusion, taking a vacation leave during probationary period depends on individual agreement between the employer and employee.
Maternity leave or paternity leave for men employees (i.e. as other insured person for the purposes of social insurance) is justified work leave provided by an employer in accordance with the Labour Code related to childbirth or care of a newborn. Male employees can take parental leave on the first 6 weeks from the birth if they take care of the child personally.
The basic extent of leave and financial support granted to women by legislation in respect to child birth and taking care of a child is a 34-weeks long leave. In case of a single parent the leave is 37 weeks; in case of 2 or more children born at the same time it increases to 43 weeks. For other insured individuals for the purposes of social insurance the leave amounts to 28 weeks; in case of a single parent it is 31 and in case of 2 or more children born at the same time it equals 37 weeks.
During maternity and parental leave, which is considered as performance of work, the employee is entitled to regular annual leave, if the full extent or part of the maternity or parental leave falls into the time period which is treated as a performance of work in extent of 60 days within the calendar year.
Parental leave for women and men is considered as a justified leave from work, which is provided by the employer to the employee (the parent) until the day the child turns three years old for the purpose of deepening the care of the child if the employee requests so. If a child requires special care due to a long-term unfavourable health state, the employer shall be obliged to provide the employee with parental leave until the day the child turns six years old. Parental leave shall be provided for the length requested by the parent, but not less than one month. The vacation days for parental leave can be reduced or not granted at all, as parental leave is not considered as work performance for the purposes of annual leave entitlements.
For health-related absence, the employer must grant the employee time off from work according to Section 141(2) of the Labour Code for the following reasons:
The wage compensation for vacation leave is calculated based on the average earnings during the preceding calendar quarter in which the vacation is drawn, which is therefore considered as the decisive period. The average earnings are always ascertained on the first day of the calendar month following the decisive period and used during the entire following quarter. The average earnings are ascertained as average hourly earnings and rounded to four decimal places.
In case an employee did not work at least for 22 days or 170 hours during the decisive period, the probable earnings are used for calculations instead of average earnings. Probable earnings are ascertained from wages that the employee has attained since the beginning of the decisive period, or from wages they would evidently attain.
Due to the way the wage compensation for vacation leave is calculated, the amount of wage compensation can be affected and increased, for example, due to the payment of bonuses and other monetary rewards in the decisive period. If an employee during the decisive period is provided with a wage or part of a wage that belongs to them for a period longer than one calendar quarter (e.g. yearly bonuses, etc), its proportionate part that pertains to the calendar quarter is determined and used for calculation of average earnings.
Slovenian employees are entitled to at least 20 working days of vacation each calendar year. With employment, the rights for vacation leave are automatically gained, however, additional leave is granted according to the amount of years spent working or the employee’s age, tariff class, having children under 15 years old or having a disability.
Furthermore, employees shall draw at least 14 consecutive calendar days at once, i.e. 10 working days, which is precisely the half of the overall vacation leave.
The amount of additional leave is not specified in the Slovenian Labour Code, but extra days off may be granted upon the death of a close relative, marriage of the employee, childbirth or for the purposes of relocation.
In Slovenia, there are 12 public holidays in one calendar year, however, they are not included in the paid annual leave; neither are national holidays and weekly rest days.
If an employee’s contract is terminated, but their vacation leave has not been fully drawn, the remaining days may be compensated upon agreement between the employer and the employee.
The law in Slovenia does not specify whether the allowance must be returned in case the employee overdrew the vacation leave and their contact has been terminated; it is a matter of agreement with the employer.
During the probation period, employees have the same entitlement to vacation days as employees who already finished their probation.
Employees, who leave for maternity, are entitled to 105 days of paid leave calculated from the average of their salary, or 30 days of paternity leave, both entitled to the same amount of vacation days as other working employees. The parental leave lasts 130 days for both parents or 260 in case only one of them takes them. In addition to child-related absences, pregnant women are entitled to a paid doctor’s visit during their pregnancy.
As for health-related absence, if not caused by a work-related illness or injury, the leave is compensated in an amount equal up to 80% of their wage. If the source of sick-leave is work-related, the compensation equals 100% of the wage. In general, the employer covers the costs of the first 30 working days of sick leave; after then the state finances the compensation.
Slovenian employees receive a vacation allowance for their vacation leave, which has to be paid until the 30th of June of the current year. The amount of the allowance must be at least equal to the amount of the gross minimum wage in Slovenia (approx. EUR 941) and is except from taxation. Allowance is not limited upward and is not taxed up to the amount of the average gross salary in Slovenia (which equals approx. EUR 1700). Allowance in excess of the gross national average wage is subject to taxation.
Vacation leave is part of the paid annual leave, usually granted by the local Labour Code to employees and financed by the employer, guaranteeing a reimbursed time off work. Most countries define a minimum duration of one vacation leave, e.g. 2 weeks, but in common practice the amount of days taken at once depends on a mutual agreement between employee and employer.
Public holidays are not included in the paid annual leave, but when not falling on a weekly rest day, i.e. weekend, they may bring the benefit of extra days spent off work for employees.
| No. of vacation days* | Min. duration of one leave* | No. of public holiday days | Total no. of paid vacation days and public holidays per year | |
| BIH | Min. 20, max 30 | 12 | 10 | 30 or 40 days |
| SRP | Min. 20 | 12 | 12 | Min. 32 days |
| HR | 20 | 10 | 14 | 34 days |
| CZ | 20 | 10 | 13 | 33 days |
| HU | 20 | 10 | 11 | 31 days |
| PL | 20 or 26 | 10 | 13 | 33 or 39 days |
| RO | 20 | 10 | 15 | 35 days |
| SR | 20 | 10 | 10 | 30 days |
| SK | 20 or 25 | 10 | 15 | 35 or 40 days |
| SI | 20 | 10 | 12 | 32 days |
*Expressed in working days; **Expressed in calendar days
Legend: Federation of Bosnia and Herzegovina (BIH), Republic of Srpska (SRP), Croatia (HR), Czech Republic (CZ), Hungary (HU), Poland (PL), Romania (RO), Serbia (SR), Slovakia (SK), Slovenia (SI)
When an employee’s contract is terminated, but they did not fully draw their vacation days, in most cases they have the right to compensation for the remaining leave. In case they took more vacation days than entitled to, sometimes they must compensate the employer. In both cases, the outcome depends on the local legislation.
The same applies to probation period and vacation – country Labour Codes specify different rights when it comes to new employees, but usually grant only a part of what regular employees are entitled to for a specific time.
| Compensation of employee* | Compensation of employer** | Vacation days during probation | |
| BIH | yes | no | 1 day per months worked |
| SRP | yes | no | 1 day per months worked |
| HR | yes | no | 1/12 of vacation leave |
| CZ | yes | yes | 1/12 of vacation leave |
| HU | yes | individual*** | depends on the employer |
| PL | yes | no | 1/12 of vacation leave |
| RO | yes | yes | regular vacation leave |
| SR | yes | yes | regular vacation leave after a month of employment |
| SK | yes | yes | depends on the employer |
| SI | yes | individual*** | regular vacation leave |
*Financial reimbursement of employee for unused vacation leave in case of contract termination; **Financial reimbursement of employer for overdrawn vacation leave in case of contract termination; ***No specific rule applies in case of overdrawn vacation leave, but the employer might reclaim the compensation paid in excess
Legend: Federation of Bosnia and Herzegovina (BIH), Republic of Srpska (SRP), Croatia (HR), Czech Republic (CZ), Hungary (HU), Poland (PL), Romania (RO), Serbia (SR), Slovakia (SK), Slovenia (SI)
When a child is born, employees are entitled either to a maternity or paternity leave, based on their gender, and an additional parental leave. Their length depends on local legislation and may be voluntary, such as paternity and parental leave.
Health-related absence can be defined as time spent off work due to illness or health-related matters, such as medical examination. Labour Codes may define either paid or unpaid days of sick leave, with specified or unspecified number of days per year.
| Length of maternity leave | Length of paternity leave | Length of parental leave | No. of working days of paid sick leave | |
| BIH | 6 weeks | depends on the length of maternity leave* | not specified | no limitation |
| SRP | 12 weeks | depends on the length of maternity leave* | not specified | no limitation |
| HR | 14 weeks | depends on the length of maternity leave* | 8 years | 42 |
| CZ | 28 weeks | 1 week | 3 years | no limitation |
| HU | 24 weeks | 1 week | 3 to 10 years*** | not specified |
| PL | 20 weeks | 2 weeks | 32 to 34 weeks**** | no limitation |
| RO | 18 weeks | 1 week | 2 years | 5 |
| SR | 13 weeks | 1 week | 9 to 12 months** | 30 |
| SK | 34 weeks | 6 weeks | 3 to 6 years*** | 7 |
| SI | 15 weeks | 4 weeks | 130 to 260 days***** | no limitation |
*Parents may agree that the father and not the mother continues to use the leave after the expiration of the compulsory maternity leave, **Based on the number of children, ***Based on the health conditions of the child; ****The number of weeks increases in case of twins; *****Depends on whether both parents take the leave or only one of them
Legend: Federation of Bosnia and Herzegovina (BIH), Republic of Srpska (SRP), Croatia (HR), Czech Republic (CZ), Hungary (HU), Poland (PL), Romania (RO), Serbia (SR), Slovakia (SK), Slovenia (SI)
Vacation allowance is paid to employees for each day of vacation taken in a calendar year. They are calculated usually from the average wage from the decisive period, which varies for each country.
| Decisive period* | Calculation of compensation | |
| BIH | preceding calendar quarter | from 50% of average wage |
| SRP | preceding calendar quarter | from 100% of average wage |
| HR | preceding calendar quarter | from 100% of average wage |
| CZ | preceding calendar quarter | from 100% of average wage |
| HU | preceding 6 months | from 100% of average wage |
| PL | preceding calendar quarter | from 100% of average wage |
| RO | preceding calendar quarter | from 100% of average wage |
| SR | preceding calendar year | from 100% of average wage |
| SK | preceding calendar year | from 100% of average wage |
| SI | preceding calendar year | from 100% of average wage |
*The period from which the vacation allowance is calculated; **But not more than 2150,68 RUR per day
Legend: Federation of Bosnia and Herzegovina (BIH), Republic of Srpska (SRP), Croatia (HR), Czech Republic (CZ), Hungary (HU), Poland (PL), Romania (RO), Serbia (SR), Slovakia (SK), Slovenia (SI)
According to Romanian legislation, for employing foreign citizens in Romania, Romanian employers must fulfill certain obligations and must follow some steps that, in the case of citizens from outside the EU, are not very simple.
As such, the difficulty level in the employment process depends on the origin of the citizen that needs to be employed in Romania.
We will next detail the procedure that must be completed in the case of citizens coming both from and outside the EU space.
Considering that an employer wishes to employ in Romania a foreign citizen from the EU, EES or SC for more than 3 months, he must file for registration of residency for the expat citizen at the county offices of the General Inspectorate for Immigration.
A dossier must be filled, containing the following documents:
Based on the documents mentioned above, for the citizens of the EU, EES or SC employed on Romanian territory, the General Inspectorate for Immigration will issue a Certificate of Registration in the same day. This certificate is valid for a period of up to 5 years, but no shorter than 1 year.
At this time, based on the CNP received from IGI, the expat employee can be added to the 112 Statement without facing any issues at its validation and he will also be enlisted in the Social Security system.
The foreign employee must also request from the employer a certificate required for the doctor and must enlist at a family physician in Romania. This is due to the fact that one of the mandatory pieces of information required for declaring the CASS tax is the one in regard with the employee’s regional Health House.
For the individual work contract, the salary is calculated as for a resident employee, local legislation being enforced. As such, the employer will calculate and retain social contributions and income tax in conformity with the legal requirements in effect at the moment the calculation is made. Until the 25th of next month, all these are declared through the 112 Statement and are payed to the state in the name of the employee.
In order to obtain the Registration Certificate, depending on purpose, the following documents must be handed in:
Employment
Secondment
In this case, the employer must obtain an employment notification. The non-EU citizen may be employed with full-time 8 hours/day in Romania only by a single employer, be it an individual or a legal entity. Foreign citizens who hold a work permit may be employed by another employer with a part-time contract of up to 4 hours/day.The employer will obtain the employment notification from the local county branch of the General Inspectorate for Immigration where he has his head office. In order to do this, he must file a series of documents and pay a number of taxes.
Individuals that do not have Romanian citizenship or the citizenship of another EU or EES state may be employed in Romania, only if the following conditions are met:
Depending on the type of activity that the employee performs here, there are multiple categories in which he may be classified: permanent workers, probationary, seasonal etc. After obtaining the work permit, the employer must forward this document to the employee, and he will obtain a long-term visa for employment from the proper diplomatic missions and the consular offices of Romania.
In order to obtain the visa, a serie of documents must be filled. The visa tax is EUR 120 and must be paid in the state in which the application is made.
Long-term visa is granted for a period of 90 days, with one or more trips allowed. After this step, the employee must obtain his single permit. The required documents are filed personally by the applicant (a picture will be taken) at the local branch of the General Immigration Inspectorate with at least 30 days prior to the expiration of the visa.
The single permit is renewed with at least 30 days before the expiration of the prior one. The salary is handled the same as in the case for EU citizens, as long as he is employed and detached.
Exceptions:
An employment notice is required in order to be employed in Romania even in the following situations:
Depending on the type of activity that is to be performed in Romania, one can be employed as a:
The General Immigration Inspectorate solves the request for releasing the employment notice in a maximum term of 30 days from the requests’ registration. In the cases where extra checks are required, the term can be extended with a maximum of 15 days.
After obtaining the employment notice, the employer must send this document to the employee and he will obtain the long-term visa for employment from the diplomatic and consular missions of Romania.
Required documents:
For secondment, the following documents are required:
The visa tax is EUR 120 and is payed in the state where the solicitation is made.
The long-term visa is issued for a period of 90 days, with one or more trips included.
After entering Romania, a single permit must be obtained. The required documents are filed personally by the applicant (a picture will be taken) at the local branch of the General Immigration Inspectorate with at least 30 days prior to the expiration of the visa.
For the first extension of the right of stay (obtaining the first single permit) for employment the following documents must be filed:
The single permit is renewed with at least 30 days prior to the old one’s expiration.
The General Immigration Inspectorate solves the request for releasing the employment notice in a maximum term of 30 days from the requests’ registration. In the cases where extra checks are required the term can be extended with a maximum of 15 days.
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