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Major tax changes in Romania starting August 1, 2025: increases in VAT rates, excise duties, and the introduction of stricter rules for taxpayers| News Flash

August 5, 2025
This article is also available in
Romanian

In the Official Gazette of Romania, Part I, No. 699 of July 25, 2025, Law No. 141/2025 on certain fiscal-budgetary measures (hereinafter referred to as “Law 141/2025”) was published, introducing major tax changes in Romania starting August 1, 2025.

Among the most notable changes are: an increase in the standard VAT rate to 21%, the redefinition of a single reduced VAT rate of 11%, the elimination of certain VAT exemptions, an increase in the dividend tax to 16% starting January 1, 2026, adjustments to the health insurance contribution payment system (hereinafter referred to as “CASS”), higher excise duties, an increase in the additional tax for credit institutions, and others.

Below, we present the most important tax-related changes introduced by Law No. 141/2025.

Value Added Tax (“VAT”)

Law no. 141/2025 introduces a wide range of changes to the VAT regime in Romania, with a significant impact on Romanian taxpayers, especially in the retail, construction, real estate, food industry and NGOs sectors. The changes are valid from 1 August 2025.

Increasing the standard VAT rate to 21%

The standard VAT rate increases from 19% at 21%, applicable to all operations that do not benefit from exemptions or reduced rates.

Increasing the reduced VAT rate to 11%

A single reduced VAT rate of 11% is introduced, replacing the old VAT reduced rates of 9% and 5%, which will be applicable to the following types of operations:

  • Supplies of medicines for human use;
  • Supplies of food and drinking water whose CN codes will be established by Methodological Norms (with some exceptions – e.g. food supplements, foods with high added sugar content);
  • Water supply and sewage services;
  • Water supply for irrigation in agriculture;
  • Supplies of fertilizers and pesticides, under certain conditions;
  • Supplies of school textbooks, books and magazines;
  • Supplies of thermal energy in the cold season under certain conditions to certain beneficiaries;
  • Supplies of constructions as part of social policy (nursing and retirement homes, foster homes and recovery centers)
  • Supplies of catering /restaurant services (excluding alcoholic beverages).

Elimination of the VAT exemption for certain supplies of goods and services in the medical sector

Law 141/2025 also introduces a readjustment of the following categories of operations, which fell within the scope of the reduced VAT rate until 31 July 2025 and will be subject to the standard VAT rate of 21% as of 1 August 2025:

  • Supplies of food supplements;
  • Supplies of veterinary medicines;
  • Supplies of new construction to individuals, under certain conditions (transitional measures will exist until July 31, 2026, as listed below);
  • Supplies and installation of photovoltaic panels, solar thermal panels, heat pumps and other high-efficiency, low-emission heating systems, etc.

Transitional regime for the 9% VAT rate, applicable to the delivery of constructions to individuals until July 31, 2026

The reduced 9% VAT rate is maintained for the supplies of constructions to individuals during the period August 1, 2025 – July 31, 2026, under certain cumulative conditions:

  • Useful area of the construction ≤ 120 sq m;
  • Price ≤ 600,000 Lei (excluding VAT);
  • The construction must be delivered and ready to be occupied by July 31, 2026;
  • The beneficiary has not purchased any other home with a reduced VAT rate;
  • A legal act should be concluded with the object of the advance payment for the purchase of such a construction by August 1, 2025.

In addition, for the above-mentioned legal act, concluded between July 3 and July 31, 2025, a proof of payment of a minimum 20% advance by July 31, 2025 is also required in order to benefit from the reduced VAT rate of 9%.

Elimination of VAT exemption for certain supplies of goods/ services in the medical field

For the following supplies of goods and services that previously benefited from VAT exemption, the standard rate of 21% will apply:

  • Construction, rehabilitation and modernization services of hospital units provided to nonprofit entities, if they are offered free of charge to public hospitals or owned by nonprofit entities;
  • Similar services provided to companies wholly owned by nonprofit entities;
  • Deliveries of medical equipment, devices, accessories and sanitary supplies provided to nonprofit entities (under certain conditions).

Dividend tax

The dividend tax increases from 10% to 16% on dividends distributed starting January 1, 2026, respectively starting on the first day of the amended fiscal year starting in 2026.

Dividends distributed based on the interim financial statements prepared in 2025 (or within a modified financial year beginning in 2025) are subject to the previous tax rate of 10%, without being subject to any regularization subsequent to the preparation of the annual financial statements.

Supplementary tax for credit institutions

The additional tax due by credit institutions according to art. 46^1 of the Fiscal Code, is increased from 2% to 4%, starting with July 1, 2025.

By way of exception, credit institutions with a market share of less than 0.2% (by reference to the total net assets of the Romanian banking sector) will remain subject to the 2% rate.

The newly introduced rate by Law 141/2025 will remain valid for 2026, as well.

Increase of excise duties

Starting August 1, 2025, the level of excise duties will increase, on average, by 10%, for various product categories, including: gasoline and diesel, alcohol, beer, wines, as well as non-alcoholic beverages with added sugar.

Subsequently, in 2026, a new increase is planned, also around 10%.

At the same time, excise duty was established for still wines and fermented beverages, other than beer and wine (eg, apple and perry cider).

Changes regarding income tax and CASS

Law 141/2025 introduces a series of changes in income tax and CASS, the most important of which are listed below.

Income tax:

  • Increase of the tax rate for dividend income, which will be distributed starting January 1, 2026 from 10% to 16%;
  • The tax treatment of interest income from bonds issued by Romanian legal entities on foreign capital markets is clarified, i.e., they will be taxed at 10% and declared through the Unique Declaration;
  • Increase of the tax rate for the minimum range applicable to gambling gains (4%, instead of 3%).
  • Introducing into the category of taxable income from other sources, the income of any kind, received as a result of the surrender of ferrous and non-ferrous metals and their alloys, from personal assets, classified as waste.

CASS:

  • Pension income will be subject to CASS in Romania for the part exceeding the ceiling of 3,000 Lei. The new regulation applies to income related to the period between August 1, 2025, and December 31, 2027, including pensions received from abroad.
  • Along with pension income, other incomes will be subject to CASS such as:
    • Childcare allowance;
    • Employment insertion stimulus;
    • Adoption accommodation allowance;
    • Allowance for caring for a disabled child up to 7 years old.
  • The following list of individuals who were previously exempt from paying CASS will no longer benefit from this exemption starting with September 1st 2025: spouses and parents without their own income, supported by an insured person, people receiving unemployment benefits or other forms of support from the unemployment insurance allowance, persons on maternity leave, beneficiaries of other social assistance, etc.
  • A new procedure is introduced for the option to pay CASS for dependents (such as spouses, parents without their own income). This will require that, for each dependent, the CASS contribution must be paid to a base level, established at the level of 6 gross minimum wages in force on January 1 of the year in which you make the declaration. The option must be exercised by submitting the Unique Declaration, which will highlight the CASS due, and the payment will be made in two installments, i.e., 25% of the amount is paid upon filing the declaration, and 75% of the amount is paid by May 25 of the following year.

Changes in the calculation of medical leave

Medical Certificates (code 01 – common illness):

Starting August 1, 2025, the medical leave benefit for temporary work incapacity will be calculated differently based on the duration of the medical episode:

  • 55% of the calculation base for certificates issued for periods of up to 7 days;
  • 65% of the calculation base for certificates issued for periods between 8 and 14 days;
  • 75% of the calculation base for certificates issued for periods longer than 15 days.

Exception: For medical leaves related to long-term cardiovascular diseases, the benefit will continue to be calculated at 75% of the calculation base regardless of the duration.

Support for implementing these major tax changes in Romania

These major fiscal changes in Romania pose significant challenges for companies and individuals. If you are affected by the new regulations and need support to understand the impact on your business, Accace Romania specialists are here to assist you. Contact us for personalized consultation and effective solutions or discover our tax advisory and tax compliance services in Romania.

Tax changes introduced by GEO 156/2024 in Romania

At the end of 2024, major tax changes were adopted in Romania through Emergency Ordinance no. 156/2024, which will have a significant impact on the business environment and taxpayers starting in 2025. The normative act introduces significant changes to the tax legislation, including the removal of certain tax incentives and the establishment of new conditions in specific economic sectors.

In the Official Gazette no. 1334 of December 31, 2024, the Emergency Ordinance no. 156/2024 was published concerning certain fiscal-budgetary measures in the field of public expenditures for the substantiation of the consolidated general budget for the year 2025, the amendment and supplementation of certain legislative acts, as well as the postponement of certain deadlines.

Below, you will find details about the major tax changes in Romania and its impact.

Dividend tax for legal entities

1. Increase in the tax rate from 8% to 10%.

Dividend tax is determined by applying a 10% rate to the gross dividend paid to a Romanian legal entity.

Effective Date: The new rate applies to dividends distributed after January 1, 2025.

Microenterprise income tax

1. The income threshold for eligibility for this tax system is reduced.

A microenterprise is a Romanian legal entity that, as of December 31 of the previous fiscal year, has earned income not exceeding  the equivalent of €250,000 in lei (or €100,000 starting January 1, 2026). It must also meet all the other conditions specified in Article 47 of the Fiscal Code.

Previous threshold: €500,000.

Effective Date: January 1, 2025.

2. Removal of the condition regarding the share of consultancy or management income in total revenues,    which had to be below 20% to qualify for microenterprise income tax.

Effective Date: January 1, 2025.

3. Application of a 3% tax rate, starting January 1, 2025, to certain activities corresponding to the following CAEN codes:

  • 6210: Custom software development activities (client-oriented software).
  • 6290: Other IT service activities.
  • 5611: Restaurants.
  • 5612: Mobile food service activities.
  • 5622: Other catering services n.e.c.

Effective Date: January 1, 2025.

4. If a microenterprise earns income exceeding €250,000 (or €100,000 starting January 1, 2026) during a fiscal year, it will owe profit tax starting with the quarter in which the threshold was exceeded, without the possibility of opting for the microenterprise income tax system in subsequent periods.

Effective Date: January 1, 2025.

5. For fiscal year 2025, the income threshold of €250,000 (or €100,000 starting January 1, 2026) will be verified based on revenues earned by December 31, 2024 (or December 31, 2025, for 2026). The condition regarding the share of consultancy and/or management income in total revenues as of December 31, 2024, does not apply when calculating the €250,000 limit.

Income tax changes in Romania

1. The income tax exemption for employees in IT, construction, agriculture and food industry is abolished.

Effective Date: Starting with income earned in January 2025.

2. The tax rate for dividend income earned by individuals increases from 8% to 10%.

Dividend income, including gains from holding participation titles defined by legislation on collective investment schemes,    will be taxed at a final rate of 10%.

Effective Date: The new rate applies to dividends distributed after January 1, 2025.

Non-resident income tax

The tax rate for dividends received by non-residents increases from 8% to 10%.

Effective Date: The new rate applies to dividends distributed after January 1, 2025.

Construction tax

The construction tax is reintroduced. It is calculated by applying a 1% rate to the value of constructions existing in the taxpayer’s   assets as of December 31 of the previous year, minus the value of buildings subject to building tax.

This provision also applies to the value of buildings in industrial, scientific, and technological parks that, according to the law, are not exempt from the building tax.

For constructions owned by the public domain of the state or local administrative units, the tax is payable by the taxpayers who manage, lease, or use them for free.

Payment deadlines: The construction tax is payable in two equal installments by June 30 and October 31.

Effective Date: January 1, 2025, with the mention that within 90 days of the entry into force of this emergency ordinance, the Ministry of Finance will issue methodological guidelines for the application of the new provisions regarding the construction tax.

Elimination of tax incentives for certain categories of employees

Starting with income related to January 2025, Emergency Ordinance No. 156/2024 eliminates the tax incentives previously granted to employees in the following sectors:

  • IT – the exemption from income tax for employees involved in software development activities is repealed.
  • Construction – the exemption from income tax applicable to workers in the construction sector is repealed.
  • Agricultural Sector and Food Industry – the exemption from income tax for employees in the agri-food sector is repealed.

As a result, employees in these sectors will pay the full amount of income tax (10%), pension contributions (CAS – 25%), and health insurance contributions (CASS – 10%).

Establishment of a differentiated gross minimum wage

The gross minimum wage for certain economic sectors is set as follows:

  • Construction Sector: The guaranteed gross minimum basic salary is set at RON 4,582 per month, excluding allowances, bonuses, and other additions, for an average normal working schedule of 165.334 hours per month, representing an average of RON 27.714 per hour.
  • Agricultural Sector and Food Industry: The guaranteed gross minimum basic salary is set at RON 4,050 per month, excluding allowances, bonuses, and other additions, for an average normal working schedule of 165.334 hours per month, representing an average of RON 24.496 per hour.

The amount of RON 300 net, without taxes, for the minimum wage

Starting with the income earned in January 2025 and until December 31, 2025, the measure regarding the tax exemption for RON 300 per month from the gross minimum wage will remain in place. This amount is exempt from income tax and mandatory social contributions if the following conditions are met:

  1. The gross monthly basic salary, excluding bonuses and other additions, equals the guaranteed gross minimum wage set by Government decision.
  2. The gross monthly income from wages and wage-like income, excluding the value of meal vouchers, vacation vouchers, and meal allowances, if applicable, granted according to the law under the same individual employment contract for the same month, does not exceed RON 4,300, inclusive.

Mandatory contribution to pillar II private pensions

With the elimination of tax incentives for the IT, construction, and agri-food sectors, the mandatory full contribution to Pillar II private pensions is reinstated. Until now, employees in these sectors paid a reduced CAS contribution of 21.25%, with the difference intended for Pillar II being transferred only if the employee opted in writing.

Following the changes, the legal percentage of 4.75% from CAS will be automatically transferred to Pillar II, without requiring an explicit request from employees. Thus, the contribution to private pensions becomes mandatory again, similar to the regime applicable to other employees in Romania.

Support for implementing these major tax changes in Romania

These major fiscal changes in Romania pose significant challenges for companies and individuals. If you are affected by the new regulations and need support to understand the impact on your business, Accace Romania specialists are here to assist you. Contact us for personalized consultation and effective solutions or discover our services for tax advisory and tax compliance services in Romania.

Tax changes introduced by GEO 115/2023 in Romania

In the Official Gazette no. 1139/2023, the Government Emergency Ordinance no. 115/2023 was published on fiscal budgetary measures for 2024, which introduces significant changes to the fiscal measures previously introduced by Law no. 296/2023. These changes are summarised below:

Corporate income tax

The most relevant changes in the area of corporate income tax concern the following:

  • The following are listed as social expenses subject to the 5% limitation on salary expenses: (i) amounts paid by the taxpayer for the children of employees with their placement in early education units, within the limit of Lei 1500 per month per child and (ii) expenses incurred by the taxpayer in respect of units managed by itself as well as for nurseries and kindergartens.
  • A 50% limit is introduced for operating expenses relating to a registered office owned by an individualor acquired by the taxpayer, which are not used exclusively for business purposes (i.e. also used for personal purposes).
  • Private scholarships are no longer eligible for the tax credit. Private scholarships granted according to the law up to Lei 1500 per scholarship will be cumulated with other social expenses in order to fit within the 5% ceiling applied to salary expenses.
  • The deductibility ceiling is reduced from 50% to 30% for adjustments for impairment of receivables that are uncollected within a period exceeding 270 days from the due date, applicable to receivables registered after 1st January 2024.
  • Changes are brought to the depreciation of head offices which are not used exclusively for business purposes. Also, in case of use of registered offices for the benefit of shareholders, tax depreciation will not be deducted upon the computation of the corporate income tax.
  • Tax losses incurred by the taxpayer will be carried forward up to 70% over a period of 5 years. Tax losses incurred in years prior to 2024 will be carried forward for the remaining 7 years up to a maximum of 70%.
  • Changes are made to the excess borrowing costs. Excess borrowing costs which do not finance the acquisition/production of fixed assets which will be subject to an ANAF Order and which are incurred in relation to related parties are deductible up to a limit of €500,000. The ceiling of 500,000 Euro relating to excess borrowing costs incurred with related parties does not apply to credit institutions – Romanian legal entities, Romanian branches of credit institutions – foreign legal entities, non-banking financial institutions and investment firms defined by law. Excess borrowing costs incurred in relation to affiliated/non-affiliated parties may not exceed the ceiling of EUR 1,000,000 in a tax period.
  • The corporate income tax may be redirected to sponsorship actions within the eligible limit up to the deadline for filing the corporate income tax return.
  • Amounts for electronic cash registers will no longer be eligible for tax credit. Amounts of electronic fiscal cash registers remaining to be carried forward at the end of 2023 are items similar to expenses and their tax depreciation is not deductible.

Microenterprise income tax

  • The eligibility conditions for a legal entity to apply the micro regime are modified as follows:
    • The number of micro enterprises is limited to 1 (one) for each shareholder who owns, directly or indirectly, more than 25% of the shares/shares of the company; by 31st March of the following year, it shall be determined which of the companies will apply the microenterprise taxregime.
    • The requirement to have filed annual financial statements within the legal filing deadline is introduced. For the year 2024, the condition is deemed to be met if the financial statements for FY 2023 are filed by 31.03.2024.
  • In addition, for the determination of the ceiling of 500.000 Euro, the income obtained by other related micro-enterprises (definition according to Law no. 346/2006 on the stimulation of SME development) of the micro-enterprise under analysis will also be taken into account.
  • From 1st January 2024, the special provisions applicable to taxpayers operating in the Horeca sector – applying the same standard eligibility conditions – are repealed.
  • The micro-enterprises that are inactive at the Trade Register will apply the micro regime until they resume their activity, with a reassessment of the criteria after resuming the activity.
  • If, during a tax year, the condition of at least 1 employee is not met and/or the financial statements are not timely submitted, the legal entity will owe standard corporate income tax from the quarter in which one of the conditions is no longer met.
  • The tax credit for sponsorships/private scholarships/electronic cash registers is eliminated.

Payroll tax

Clarifications for the IT, construction, agricultural and food sectors:

  1. Wage and salary-related income

For individuals with income from wages and salaries in the IT, construction, agriculture and food industry sectors, who in the course of the same month earn income for a fraction of the month, in the basic function, with one or, as the case may be, several employers in succession, for the application of the exemption, each employer determines the part of the 10,000 lei monthly ceiling corresponding to this period and grants the exemption for the gross monthly income earned, within the limit of the fraction of the ceiling thus determined.

  1. Contributions to the privately administered pension fund

Individuals in the above-mentioned fields may opt to pay contributions to a privately administered pension fund. The option is filed with the employer and the contribution is deducted from the month following registration of the option. Employees may revoke the option by submitting a written request to their employer, and the waiver will take effect from the following month’s income.

  1. Reduction of the contribution rate for programmers

The social security contribution rate for programmers is reduced until 31 December 2028, for gross monthly income of up to 10,000 lei. The part of the income exceeding this ceiling does not benefit from tax relief.

Other amendments and additions:

  1. Teleworking allowance

The provision qualifying the teleworking allowance as a type of income that is non-taxable and not subject to social security contributions, up to a monthly ceiling of 400 lei is repealed, from January 2024.

  1. Sports facilities for employees

The ceiling for sports facilities paid by employers is reduced from €400/year to €100/year as from January 2024.

  1. Inclusion of previously non-taxable income in the 33% monthly ceiling

Income representing (i) amounts paid by employers for the early education of employees’ children, but not more than 1,500 lei/month for each child, and (ii) the favourable difference between the preferential interest rate and the market interest rate for loans and deposits, are excluded from the category of non-taxable income covered by Art. 76 para. (4) of the Tax Code and included in the category of income that is non-taxable and not subject to social contributions within the monthly ceiling of at most 33%.

  1. Calculation of the ceiling for the delegation/secondment/transnational secondment allowances

In the case of delegation, secondment, transnational secondment allowances and the benefits received by mobile workers referred to in H.G. 38/2008, as well as any other amounts of the same nature, the ceiling corresponding to the value of 3 basic salaries corresponding to the post occupied shall be calculated separately for each month by comparing the 3 salaries with the number of working days in that month, and the result shall be multiplied by the number of days corresponding to each month of the period of delegation/secondment/work in another locality, in the country or abroad.

  1. Inclusion of sick leave allowances in the basis for calculating health insurance contributions:

Starting with January 2024, sick leave benefits become part of the health contribution base, except for those for accidents at work or occupational diseases, which are exempt.

Tax on private income

An allowance of20% is introduced for rental income.

RO e-invoice

Regarding the obligation to issue e-invoices, equal sanctions are introduced for both the issuer and the recipient in case of non-compliance with the legal obligations – the fine is 15% of the total invoice value.

If you have any further questions regarding these fiscal changes, please do not hesitate to contact our Romanian team.

Anca Ghizdavu
Tax Director | Accace Romania
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