Romania Income Tax - Advice for Foreign Investors

Income Tax in Romania

Updated on Wednesday 28th July 2021

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Income tax romania.jpg16% represents the standard income tax rate in Romania for companies with activities in this country. The tax rate in Romania is relatively low compared to other European countries, but for more details on this topic, you can discuss it with one of our Romanian accountants. Our specialists can help international entrepreneurs register for taxation in Romania and can handle a series of formalities.

Details about Romania income tax

As mentioned at the beginning of this article, the corporate income tax in Romania is set at a 16% rate. There are some exemptions and mostly involve companies carrying gambling activities in Romania. Below is information about the Romania income tax rate:
  1. If a foreign company has a place of business in Romania, such a company is considered a taxpayer.
  2. The difference between the revenues and expenses is the calculation base for the taxable profit of a company in Romania. More about Romania income tax calculator can be discussed with our Romanian accountants.
  3. In the case the income tax applies to worldwide income, the double taxation treaty signed by Romania applies.
  4. The income tax in Romania is calculated on a quarterly basis. Such tax is normally paid until the 25th of the first month that follows the end of the quarters, according to the Fiscal Code in Romania.
Our Romanian accountants can tell you more about Romania income tax, mentioning that assistance for tax registration and compliance can be offered on request.

Are any income tax exemptions in Romania?

Yes, according to the Romanian Fiscal Code, there is no income tax imposed for non-profit organizations established in Romania. The same tax exemption applies to specific companies having activities in the agricultural sector or generating revenues as religious cults or educational entities.

Can companies apply for corporate income tax advanced payments?

Yes, Romania income tax can be paid in advance, whether for the entire year or quarterly advanced payments, as stipulated by the same Fiscal Code. If you would like to discuss further details about Romania income tax rate, feel free to get in touch with our Romanian accountants and ask for a free case evaluation.

Romania income tax rate for residence and non-residence citizens

The current Romania income tax rate imposed for residents and non-residents in Romania is set at 10%. In order to align with this important tax rule, it is important to understand the definition of a tax resident in this country, especially by foreigners. As such, persons with domiciliation in Romania for more than 183 days are considered tax residents. However, there is also an exception that directs citizens of Romania working outside the country, but for the Romanian government. In this situation, such employees continue to have the status of Romanian tax residents and therefore, are subject to the same personal income tax in Romania
The same applies to foreigners living in Romania but working for the government in their countries, with the mention that the personal income tax varies. It is essential to note that non-residents living in Romania and generating incomes in this country will pay taxes only on the incomes registered here. We invite you to talk to our accountants in Romania and discuss about the personal income tax in Romania.

What happens if I no longer live in Romania? Do I need to pay taxes?

Foreigners who decide to leave Romania must notify the tax authorities within 30 days prior to the departure and declare if they remain fully taxable or not. If they close the work contracts in Romania, this means that the authorities will remove them from the tax records. Feel free to ask our specialists about Romania income tax calculator and find out information about the taxes you need to pay in this country. The same team can tell you more about the personal income tax in Romania.

Investing in Romania

Romania offers numerous investment opportunities for international players who want to access a free and competitive market. In addition to the favorable tax system and the experienced workforce, Romania offers other advantages to local and foreign investors, such as simplified company registration procedures, economic connections with major international markets, the opportunity to generate profits in areas such as IT, production, agriculture, tourism, and cars. Here are some statistics that outline the economic direction of Romania:
  1. In matters of total FDIs, Romania registered more than USD 97 billion.
  2. The 2020 Doing Business report ranked Romania 55th out of 190 worldwide economies for simplified business procedures and more.
  3. Germany, Austria, the Netherlands, Cyprus, and Italy are the key investor partners of Romania.
Interested in more about Romania income tax calculator? Would you like further details about Romania income tax rate? You can get in touch with our Romanian accountants and see how you can be helped.