Corporate Tax in Romania

The corporate tax in Romania is one of the several taxes that are applied to local businesses, as well as to non-resident entities developing commercial activities here. The corporate tax rate in Romania is applicable to foreign entities operating through a permanent establishment as well. According to the latest modifications of the tax law, the corporate tax in Romania can be charged at a standard rate, but also at reduced rates to which businesses can qualify in certain conditions. 

If you need to register for taxes in Romania, including for the corporate tax, you can always rely on the services of our Romanian law firm. Our local lawyers are specialized in providing top legal services to its clients that can refer to the procedure for starting a business, registering with the local institutions, registering for taxes and complying with the local tax law and numerous other legal matters that can be of interest for persons entering the business environment. 

What is the corporate tax rate in Romania?

As presented above, the rates at which the corporate income can be taxed in Romania can vary, and they are divided between the standard tax rate and the tax regime applicable to micro-companies. The micro-company regime is applicable starting with the beginning of the fiscal year (which generally coincides with the calendar year). Some of the basic aspects concerning the corporate tax rate in Romania are presented in the list below:

• the basic rate at which the corporate tax in Romania is charged is of 16%;
• a micro-company can be charged with a tax rate of only 1% if the company’s turnover is of less than EUR 1 million;
• the 1% tax rate will be applied if the company has at least 1 employee, while in the case of micro-companies with no employees, the tax will be of 3%;
• in the case in which the company’s minimum share capital is of at least RON 45,000 (approximately EUR 9,300) and  it has at least 2 employees, the company can opt to pay the standard corporate tax rate in Romania, even if its turnover is less than EUR 1 million;
• there is another tax rate category, which refers to the revenues of nightclubs and gambling units, where such companies can pay either 5% on the yearly revenue, either 16% on the taxable profit (the company will have to pay whichever sum is higher). 

With regards to the manner in which the corporate tax rate in Romania is calculated, one should know that the tax resident companies will be charged for their global income, while foreign companies operating on the local market will be charged for the income tax only for the income that they have obtained from their activities developed here. 

Basic information on the corporate tax in Romania

Foreign investors who consider starting a business in Romania can find out more details on the overall tax regime from our Romanian law firm. Our team of lawyers in Romania can provide a clear image on the tax obligations of any company, be it foreign or local and can also help you in the relation with the local tax authority, which in this case is the National Agency for Fiscal Administration. 

As presented above, the manner in which a company will have to pay the corporate tax in Romania will vary based on its residence, this being one of the main aspects that are crucial to this this type of tax. The corporate tax due will be generally calculated on a quarterly basis and for the first three quarters of the year, the company will need to calculate and submit the tax returns no later than the 25th of the next month after the end of each quarter. 

However, for the last quarter of the financial year, the company can calculate the overall corporate tax due and to submit the required tax documents up until 25th of March of the next financial year. Please be aware that certain entities will need to conclude this procedure no later than 25th of February of the next financial year if they are registered as non-profit organizations, religious cult entities, educational units and other specific categories of taxpayers. You can receive more information on this particular case from our team of Romanian lawyers. 

A company in Romania can benefit from tax exemptions on the payment of the corporate tax. For instance, this can be applied to reinvested profit that is invested in purchasing and using technological equipment. However, the equipment can be used for a period of maximum 5 years and, at the same time, the product must be used for more than 50% of its useful lifetime. 

We invite you to contact our team of Romanian lawyers for more information on the manner in which the corporate tax rate in Romania is calculated, on the types of deductions that are available, on the tax law related to investments in research and development and numerous other aspects referring to the corporate tax.