Romania

In Romania, the standard VAT rate is 21%, in force since 1 August 2025. VAT applies to all supplies of goods and services, including imports, unless an exemption applies. A single reduced rate of 11% replaced the former 9% and 5% reduced rates and covers essential goods and services such as medicines for human use, food and beverages (with some exclusions), water supply, books and school textbooks, access to cultural sites, firewood, thermal energy, social housing, hotel accommodation, and restaurant and catering services. VAT exemptions exist for certain medical, financial, and insurance services. The VAT registration exemption threshold for small businesses is RON 395,000 (since 1 September 2025).

Corporate income tax in Romania is levied at a headline rate of 16%. CIT returns are due annually by March 25th following the fiscal year, and quarterly returns are due by the 25th of the month following the first, second, and third quarters; companies with a different fiscal year follow correspondingly adjusted deadlines, and advance tax payments are made quarterly. Qualifying micro-companies (annual revenues up to EUR 100,000 from 2026 and at least one employee) may instead pay a 1% tax on revenues. Large companies with turnover above EUR 50 million in the previous year may be subject to a 0.5% minimum turnover tax (IMCA), scheduled for elimination from fiscal year 2027.

Personal income tax in Romania is levied at a headline rate of 10%. Taxpayers must submit their PIT return by May 25th for income earned in the previous year. This applies to both residents and non-residents earning income from Romanian sources. Final payments for personal income taxes are due on the same date. Dividend income is taxed separately from the flat rate — dividends distributed from 1 January 2026 are subject to a 16% tax.

Romania imposes two main types of property taxes: building tax and land tax. Building tax rates range from 0.08% to 0.2% of the taxable value for residential buildings and from 0.2% to 1.3% for non-residential buildings. Land tax is a fixed annual amount per square metre, based on land classification. Both taxes are paid annually in two equal installments, by March 31st and September 30th, with a reduction (typically up to 10%, set by the local council) for full advance payment by March 31st. From 2025, a construction tax of 0.5% applies on the net value of constructions (0.25% for constructions in certain public- or private-domain holdings), due by May 25th.

Withholding tax in Romania is imposed on dividends, interest, and royalties. Dividends distributed from 1 January 2026 are subject to a 16% withholding tax (raised from 10%), for both residents and non-residents; interest and royalties paid to non-residents are also taxed at 16%. Dividends are exempt where the receiving company has held at least 10% of the shares in the distributing company for an uninterrupted period of at least one year, including under the EU Parent-Subsidiary Directive. Interest and royalties may be exempt under the EU Interest and Royalties Directive for a minimum 25% holding maintained for at least two years. Double-tax treaties may provide lower rates upon presentation of a tax residency certificate.