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Paying taxes in Romania

Updated on Sunday 17th April 2016

paying_taxes_in_romania.jpgFor most entrepreneurs, the bookkeeping, the management, employment services and paying taxes in Romania represent an unpleasant obligation and a waste of time. For our experienced team this is the field in which they can excel in supporting partners to develop without care regarding bureaucracy, statements and fines.

We offer customized service and advice for the main taxes which must be paid in Romania:

The social security contributions which are paid by both employers and employees in Romania are:

- Individual social insurance contribution deducted from policyholders: 10.5%, of which 3.5% are distributed to private pension funds available according to Law no. 411/2004, republished, with subsequent amendments

- Social insurance contribution for the payment of persons paid from the unemployment insurance budget which is paid by the Territorial agencies for labor: a share of 31%

- Social insurance contribution payable by the employer, paid by natural and legal persons who act as employers and employer related entities that have the capacity of paying the income from dependent activities and any payment of wage income or treated as wages: 20.8% for normal working conditions, 25.8% for difficult working conditions, 30.8% for special working conditions and other special conditions provided by the Law.

The VAT tax in Romania is charged to taxable bodies registered for VAT purposes according to art.153 from the tax code.

The standard VAT rate is 24%. The 9% reduced VAT rate is provided by the Tax Code for certain services and/or supplies of goods, including all kinds of bread and bakery products and different varieties of wheat. The reduced rate of 5% applies to the tax base for the delivery of housing as part of social policy, including the land on which they are built. VAT exemptions are provided in the Fiscal Code.

The Income tax is payable by Romanian legal entities and permanent establishments in amount of 16%. The same percent of the income tax is also applied to foreign legal entities that run their business in Romania.

The tax on dividends distributed by Romanian legal person is also 16%.

The tax offices is paid in Romania by foreign entities under the provisions of the Law no. 571/2003 regarding the Fiscal Code, in amount 4000 euros per year, paid in RON (the national currency).

The unemployment insurance contribution in Romania payable by the natural and legal persons who act as employers and employer related entities that have the capacity of paying the income from dependent activities and any payment of wage income or treated as wages, in amount of 0.5%.

The Micro-enterprise income tax in amount of 3% is a tax payable by any Romanian legal person which is categorized as a micro-enterprise.

The indirect taxes paid in a developing country like Romania exceed the amount of direct taxes in the total tax revenues of the state.

The indirect taxes are imposed by the state on sales of goods and services. The shares used to calculate these taxes are not differentiated by income, property or personal circumstances of those who buy goods or services. 

The customs duties must also be paid in accordance to the commercial policy measures established by Community acts and national level and applied to the import and export of certain categories of goods. Trade policy in Romania includes quantitative restrictions and bans trade foreign policy (embargoes and sanctions).

In general, the taxes and contributions may be paid in Romania by using the bank services offered by the bank institution where the taxpayer has opened an account.

For more information and customized offer, please contact us. 

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