Tag: Romanian Fiscal Code

Amendments of Romanian Fiscal Code in 2025

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by Florin Gherghel, Tax Manager Ensight Finance

 

The Romanian Fiscal Code was modified in 31.12.2024 and the below main amendments are applicable starting with the next day, 01.01.2025, as Emergency Ordinance 156/2024 was published in 31.12.2024 in the Official Gazette.

 

1. Dividend tax
The dividend tax has increased to 10% (from 8%) for dividends distributed after 01.01.2025, regardless of the year when the profits were obtained.
The new dividend tax is applicable to dividends distributed to Romanian legal entities, Romanian natural persons, non-resident Romanian natural persons / legal entities.
The exemptions / reductions based on EU Directive / Double Tax Treaties are applicable.
The dividend tax of 8% for interim dividends distributed in 2024, to be settled in 2025, is not changed.

 

2. Micro-enterprise income tax
The turnover for applying micro-enterprise tax regime has decreased to EUR 250.000 (from 500.000 EUR), based on 2024 revenues. From 2026, the turnover will be decreased to EUR 100.000, based on 2025 revenues.
The threshold of consultancy / management revenues out of total revenues is no longer applicable.
New NACE codes are eligible for 3% micro-enterprise tax: 6210 – software; 6290 – information technology activities, 5611 – restaurants, 5612 – public food activities, 5622 – other food services.

 

3. Salary tax
The facilities granted to salaries of employees of IT / constructions / agriculture companies are repealed starting with January 2025 salaries, which are subject to undiminished social contributions.
Starting also with January 2025 salaries, the non-taxable amount of RON 300 RON /month is maintained for which no income tax is due and is not included in the monthly base of mandatory social contributions, if the following conditions are cumulatively met:

  • the level of the basic monthly gross salary established according to the individual employment contract, without including increments and other additions, is equal to the level of the minimum gross salary per country, respectively RON 4,050;
  • if the total gross income does not exceed the value of RON 4,300.

 

4. Tax on special constructions
A tax of 1% is introduced again for the value of special constructions (mentioned in group 1 “Constructions” of the catalogue regarding fixed assets) recorded in accounting as of 31 December of the previous year (the buildings for which building tax is due are not taken into consideration).
The tax is due by Romanian legal entities and Romanian permanent establishments of foreign companies.
The tax on special constructions is paid in 2 equal installments until 30th of June, respectively 31st of October and 2025 tax must be declared until 25th of May 2025.

Significant amendments of Romanian Fiscal Code

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by Florin Gherghel, Tax Manager Ensight Finance

 

The Romanian Fiscal Code was significantly modified in end of 2023 and you may find below the main amendments.

The changes are applicable, mainly, starting with 01.01.2024.

 

1. Corporate Income Tax

Starting 01.01.2024, the fiscal losses may be recovered up to 70% of their value in maximum 5 years.

The fiscal losses as of 31.12.2023 may be recovered up to 70% of their value in maximum 7 years.

The expenses (including depreciation) related to the owned premises registered as headquarters, which are not used exclusively for economic activities, are deductible up to 50% (the related VAT is subject to the same limitation).

The provisions for bad receivables have decreased up to 30% of the provision value for receivables incurred after 01.01.2024.

Starting 01.01.2024, entities with a turnover in the previous year a turnover higher than EUR 50,000,000 will owe a minimum tax of 1% on turnover (applied to a specific formula), if the corporate income tax is lower than the tax on turnover. In this case, the due corporate income tax will be the minimum tax on turnover.

 

2. Micro-enterprise income tax

Starting 01.01.2024, the tax rates due by micro-enterprises will be as follows:

  • 1% for micro-enterprises with revenues below EUR 60,000 inclusive, obtained from other activities than those listed below;
  • 3% for micro-enterprises with (i) revenues above EUR 60,000 or (ii) with activities with NACE codes 5832, 5829, 6201, 6209, 5510, 5520, 5530, 5590, 5610, 5621, 5629, 5630, 6910, 8621, 8622, 8623, 8690 (software development / editing, HoReCa, legal assistance, medical and dental assistance).

 

Also from the same date, the regime of micro-enterprise taxpayers was significantly tightened as follows:

  • A micro-enterprise must submit annual financial statements in due time.
  • 2023 financial statements must be submitted until 31.03.2024.
  • The threshold of EUR 500,000 will be computed by taking into consideration both the revenues of the company and the revenues of the associated companies according to Law 346/2004.
  • A shareholder may own, directly or indirectly, more than 25% of the shares in only 1 micro-enterprise tax-payer.
  • A micro-enterprise cannot use as fiscal credit the sponsorships performed.

 

3. VAT

Starting 01.01.2024, a 9% VAT rate will be applied to the following transactions currently under the 5% VAT rate:

  • Sale of houses;
  • Sale of photovoltaic panels, solar thermal panels and other related items in specific cases.

 

The standard 19% VAT rate will be applied for several services / goods with reduced VAT rates (e.g. non-alcoholic drinks, food with added sugar).

Starting 01.01.2024, the VAT exemption for deliveries of medical items will be amended.

 

4. RO e-Invoice

Starting 01.01.2024, entities established in Romania are compelled to submit invoices through the RO e-Factura system for B2B transactions with place of supply in Romania.

Similarly, foreign entities not established but registered for VAT purposes in Romania are compelled to submit invoices through the RO e-Factura system for B2B transactions with place of supply in Romania.

E-invoices must be sent to SPV in 5 calendar days from the issuance date.

Starting 01.07.2024, the fine for Romanian entities / Romanian VAT fixed establishments of foreign companies is of 15% of the value of the invoice for non-sending / non-receiving invoices through e-invoice national system (and not the value of VAT disclosed in the invoice as previously published). The fines between RON 1.000 and RON 10.000 remain applicable for the period 01.04 – 30.06.2024.

Non-resident companies registered for VAT purposes are subject to a fine from RON 1,000 to RON 2,500 starting with 01.04.024.

No sanctions are applied during the period January 1 – March 31, 2024.