Taxes in Romania... A Real Tax Heaven within UE!

Romania have always been a LOW TAX country, but we have registered a significant tax change starting from January 1 2018,
when the new Tax Legislation went into effect...
From that moment, Romania has become a REAL TAX HEAVEN , totally legal and within European union,
making possible for "Micro Enterprise" companies (Companies NOT exceeding 500.000 Euro/Year gross income... ) TO PAY
NEAR TO ZERO CORPORATE TAX RATES!

The romanian Corporate Tax system is very simple, effective and cheap!
It is based on just TWO different Corporate Tax Rates, plus VAT, plus Dividend Tax:
Micro Company Tax Rate (turnover not exceeding 500.000 EURO/Year)

AND

Macro Company Tax Rate (turnover exceeding 500.000 EURO/Year)

AND

Dividend Tax = 8% in both scenarios

= All Romanian Tax details Below =


Regime fiscale competitivo

MICRO COMPANY CORPORATE TAX

The Micro Company Corporate Tax include all companies whith a turnover not exceeding 500.000 EURO/Year in gross sales. Do not matter which is the Business sector... The parameter to take into consideration is the gross sales turnover. These companies are taxed as follow:

  • Flat Tax 1% on gross revenues, for companies with at least 1 employee
  • Dividend Tax: 8% on dividends distributed

MACRO COMPANY CORPORATE TAX

The Macro Company Corporate Tax include all companies which turnover exceed 500.000 EURO/Year in NET sales (difference between the gross income and the business expenses incurred...).
So, these Companies are taxed on profit, and taxations goes as follow

  • Flat Tax 16% on net profits
  • Dividend Tax: 8% on dividends distributed




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Romania Vat Rates

Accordinge with the EU VAT Regulation, foreign companies are requested by law to register for VAT in certain circumstances (not all companies are required to register for VAT, but only those which trigger the Romanian list of VAT obligation), in order to comply EU rules and VAT to be charged by Government.

  • Standard VAT Rate = 19%
  • Reduced VAT Rate = 9% (medicines, hotel, museums...)
  • Reduced VAT Rate = 5% (school books, magazines, newspapers, admission fees to museums, historical places, sport events, cinemas, etc.)

INDIVIDUAL INCOME TAX

Any personal income obtained by romanian people and strangers officially resident is Romania are taxed at 10%.
The tax period for Personal Income Taxes in Romania is yearly..

  • Personal Income Tax: 10%
  • Deductible expenses




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WITHHOLDING TAX

A withholding tax is due for individuals making revenues from royalties, commissions, interests, sportive activities, management services, entertainment services...

  • Standard withholding tax = 10%