Romania Taxes





Romania Tax Rates 2021

(Last partial update, April 2020)

Individual Income Tax: Romania's individual income tax rate for 2020 is flat at 10%.
Corporate Tax: Romania's corporate tax rate for 2020 is 16%.
Micro companies pay 1%/3% tax.

Capital Gains: Capital gains of companies are taxed at 16%.
For individuals the standard capital gain tax rate is 10%.
For gains from sale of real estate the rate is 3%.
Dividend income received by a resident Romanian individual is taxed at 5%.



Romania taxes: Residence

Romanian companies and individuals pay tax on their Romanian and worldwide income. Non -residents companies and individuals pay tax only on Romanian source income.
A foreign company is resident if the management is in Romania.
An individual is resident if the center of living is in Romania, or if staying in Romania for 183 days within 12 months.

Romania Tax Deductions

  • Losses are carried forward for seven years. There is no carryback for losses.
  • Depreciation is deducted using one of the 3 methods,the straight line method, the reduced balance depreciation and the accelerated method.
  • Provisions for bad debts are allowed under certain terms.
  • There is no company consolidation for tax purpose.




Romania Deduction of Tax at Source

In Romania tax is deducted at source from the following payments to non-residents:
Dividend- 5%.
Interest- 16%.
Royalties- 16%.
Technical Fees – 16%.

Note: the tax withholding rates are subject to double taxation treaties and EU interest and royalties directive.

Romania Social Security

The contributions by the employer and the employee are subject to ceiling defined by law.
Emploers - Pay 4%/8% for pension.
- Pay 2.25% for labor fund.

Employees-Pay 25% for pension.
- Pay 10% for health fund.



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