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Corporate tax compliance in Romania

Updated on Sunday 17th April 2016

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The fiscal legal relationship between a body and the Romanian State determines the responsibility of legal persons (and individuals) to legal payment obligations for the state budget in a certain amount and period of time and, in this sense. Our Romanian accountants can help you drive your company throughout the corporate tax compliance in Romania.
 
The tax obligation is a legal obligation as it defines the contents of a legal relationship that arises between the state and those which are taxpayers according to law. Failure to comply in part or in full results in penalties, fines and other coercive measures.
 

Taxes for companies in Romania

 
There are several taxes and contributions payable by each company incorporated in Romania. Branches or subsidiaries of foreign companies that operate on Romanian territory will also have to comply with the tax laws and the requirements for accounting and auditing.
 
The most important taxes for companies in Romania include:
- the profit tax: 16% applicable on the Romanian-source profits; a minimum 5% rate can apply for certain business activities;
- the withholding tax on dividends, interest and royalties: 16% (5% starting with January 2016);
- the micro-enterprise income tax;
- the Value Added Tax: with a newly reduced rate of 9% for all foodstuffs and a normal rate of 24% (20% starting with January 2016);
- the real property tax: between 0.25%-1.5% of the entry value of the building - a tax levied at a local level for owned buildings and land;
 
There are no stamp duty taxes or transfer taxes. Employers in Romania must also pay social security: 15.8% of the gross salary for normal working conditions, a health fund contribution of 5.2%, an unemployment contribution of 0.5% and other contributions. 
 
Depending on the business filed in which they operate, investors may have to pay additional taxes to run their business (like energy taxes or some for the pharmaceutical industry).
 

Requirements for taxpayers

 
The tax year is generally the same as the calendar year. However, companies are allowed to opt for a different fiscal year if it corresponds with their financial accounting year. Corporate income tax is payable on a quarterly basis and payments must be made until the 25th day of the month following the month when the quarter ends. Advanced payments on a quarterly basis are also possible.
 
Failure to comply with the filing requirements results in penalties: late payment is taxed with 0.03% for each day of delay.
 
In order to avoid double taxation, Romania has signed an important number of double tax avoidance treaties with other countries worldwide.
 
For a complete and customized advice in accordance to your businesses’ economic and fiscal indicators and for audit services in Romania please contact our Romanian Accountants.
 
 

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