Romania

Value-added tax (VAT)

The standard VAT rate is 19%. The standard VAT rate is applied to all supplies of goods and services (including imports) that neither qualify for an exemption (with or without credit) nor for a reduced VAT rate.

The reduced VAT rate of 9% is levied on the supply of medicine for human and veterinary use; supply of food and beverages, excluding alcoholic beverages, for human and animal consumption; domestic animals and livestock; seeds, plants, and other ingredients used in food preparation; products used in order to complete or substitute food, which NC codes are stated through normative acts, with the exception of alcoholic beverages, non-alcoholic beverages that fall under NC code 2202, and food with added sugar, which total content of sugar is of minimum 10g/100g, other than powder milk for newborns, infants and toddlers, sweet bread and biscuits; supply of irrigation water used in agriculture; supply of fertilisers and pesticides used in agriculture; seeds and other agricultural products intended for sowing or planting; water supply and sewerage services; and supplies of housing as part of the social policy (useful surface of a maximum of 120 sqm, exclusive of household annexes, the value of which, including the land on which they are built, does not exceed the amount of RON 600,000 excluding VAT; the reduced rate applies only to homes that, at the time of supply, can be inhabited as such); supply and installation of photovoltaic panels, solar thermal panels, heat pumps and other high-efficiency, low-emission heating systems, including installation kits, as well as all necessary components purchased separately for central or local public housing/buildings except for commercial companies; the supply and installation of components for repairment and/or expansion of photovoltaic systems as a component part of construction supplies or as extra options when delivering a construction; access to fun fairs, amusement parks, recreational parks for which economic activities fall under the following NACE codes: 9321 and 9329 and fairs, exhibitions, cinemas, and cultural events, other than the tax-exempt ones; and access to sports events.

The supply of school manuals, books, newspapers, and some magazines are subject to the reduced VAT rate of 5%. Moreover, the 5% reduced VAT is applicable for:

• Services consisting of giving access to castles, museums, memorial houses, historical monuments, archaeological and architectural monuments, zoos, and botanical gardens.
• Supplies of thermal energy to population, hospitals, public and private schools, NGOs, churches, and social services providers (either public or private).
• Supplies of firewood (e.g. tree trunks, logs, brushwood, branches, sawdust, waste, and agglomerated wood scraps in the form of wood pellets, wood briquettes, or similar forms) to individuals, companies, schools, hospitals, medical offices, and social assistance units, based on a declaration on own responsibility issued by the beneficiary.

VAT exemption without credit applies to a range of activities, including the supply of services in relation to banking, finance, and insurance. However, some financial services are subject to the standard VAT rate of 19% (e.g. factoring, debt collection, managing and safekeeping certain equity papers).

The VAT exemption without credit also applies to medical, welfare, and educational related activities if performed by licensed entities. Moreover, the following activities are exempt without VAT with the right of deduction:

• Construction, rehabilitation, and modernisation services for hospital units in the state public network, as well as construction, rehabilitation, and modernisation services for hospital units provided to non-profit entities if they are intended for hospital units owned and operated by the non-profit entity or those in the state public network.
• Supplies of medical equipment, apparatus, devices, articles, accessories, and protective equipment, materials, and consumables for medical purposes normally intended for use in the healthcare field or by disabled persons, essential goods for assisting with and overcoming disabilities, as well as the adaptation, repair, rental, and leasing of such goods, to hospital units in the state public network and to non-profit entities if they are intended for hospital units owned and operated by the non-profit entity or those in the state public network.

There are also operations exempt with credit (i.e. deduction right for the related input VAT), such as the following:

• Supply of goods shipped or transported outside the European Union and related services.
• Intra-Community supply of goods.
• International transport of passengers.
• Goods placed into free trade zones and free warehouses.
• Supply of goods to a bonded warehouse, a VAT warehouse, and related services.
• Supply of goods that are placed under suspensive customs regimes.
• Supply of services in connection with goods placed under suspensive customs regimes or goods placed into free trade zones.
• Supply of goods and services to diplomatic missions, international organisations, and North Atlantic Treaty Organization (NATO) forces.

VAT consolidation

Companies established in Romania that are legally independent but are closely related in terms of financial, economic, and organisational purposes may choose to form a tax group, as long as they apply the same fiscal period. However, transactions between the members of the group fall within the scope of VAT.

Place of VAT taxation

The rules for establishing the place of VAT taxation for supply of goods and services are determined based on the same rules as those presented in the EU 2006/112/EC and EU 2008/8/EC Directives. Services provided by non-resident entities to Romanian companies with deemed place of supply in Romania are subject to Romanian VAT under the reverse-charge mechanism, provided that no VAT exemption is applicable.

Reverse-charge mechanism

Under the VAT reverse-charge mechanism, VAT is not actually paid, but only shown in the VAT return as both input and output tax, provided that both the beneficiary and the supplier are registered for VAT purposes.

As a rule, the reverse-charge mechanism applies either for intra-Community acquisitions of goods performed in Romania or for services performed by non-resident entities that are not established, nor have a fixed establishment, in Romania. Under the general rule, the place of supply of services is where the beneficiary is established or has a fixed establishment (e.g. consultancy, marketing, legal services).

The reverse-charge mechanism is applicable for the supply of buildings, parts of buildings, and plots of land, and, until 31 December 2026, to the supply of mobile phones, PC tablets, laptops, gaming consoles, and devices with integrated circuits (provided that the value of such goods, excluding VAT, mentioned on an invoice is equal to/higher than RON 22,500). Also, the reverse-charge mechanism is applicable for the supply of energy under certain conditions.

Limited VAT deduction right

The VAT deduction right related to the acquisition of road vehicles used for the transport of passengers and vehicles that meet certain characteristics, as well as the acquisition of fuel and all related services used for the respective vehicles, is limited to 50%, except for some specific exceptions (e.g. vehicles used by sales agents, taxis, transport services).

The right to deduct the tax related to the purchase, rental, or leasing of buildings/living spaces, regardless of their destination, located in residential areas or in housing blocks and the tax related to the expenses related to these buildings/spaces has been limited to 50% for the living area if they are not used exclusively for the purpose of the economic activity. The limitation applies as of the first day of the month following the date from which Romania receives for this measure a derogation decision regarding the provisions of Directive 2006/112/EC on the common VAT system.

VAT compliance

The annual turnover threshold for VAT registration in Romania is the Romanian leu equivalent of EUR 88,500, computed based on the exchange rate from the date of EU accession (i.e. RON 300,000). Companies surpassing the VAT registration threshold will be liable to charge VAT for the advance payments received before registering for VAT purposes related to goods delivered/services performed after the registration date.

As a rule, the fiscal period is the calendar month. For taxable persons registered for VAT purposes whose previous year-end turnover (from taxable operations, VAT exempt, and outside the Romanian VAT scope operations with deduction right) did not exceed EUR 100,000, the fiscal period is the calendar quarter. Also, the fiscal period will change to the calendar month, if the taxpayer performs intra-Community acquisitions.

Taxable persons must keep complete and detailed records for calculation of VAT liabilities.

VAT return (300 Statement) should be submitted to the tax authorities by the 25th day of the month following the end of the fiscal period; the VAT payment is due by the same date. The VAT return can be submitted by electronic means.

The recapitulative statement for intra-Community transactions (390 Statement) should be submitted only by companies performing intra-Community transactions by the 25th day of the month following the one in which the intra-Community transactions were performed. The content of the 390 Statement has been changed by introducing an obligation to declare goods dispatched under the call-off stock regime from Romania to other member states starting with the transactions performed in February 2020. 

Taxable persons not registered for VAT purposes in Romania and not required to register are liable to pay VAT and to submit a special VAT return in connection to services rendered by/provided to non-residents. These obligations should be fulfilled by the 25th day of the month following that when the services are supplied.

Taxable persons are required to file VAT statements related to acquisitions/supplies of goods/services performed on Romanian territory on a monthly/quarterly basis, based on invoices issued/received to/from taxable persons registered for VAT purposes in Romania. These obligations should be fulfilled within 30 days.

A taxable person registered for VAT purposes who does not exceed the threshold of RON 300,000 during the course of a calendar year may request de-registration from the VAT registered persons record between the first and tenth day of each month following the fiscal period used (month or quarter).

Starting with 2022, SAF-T has been implemented in Romania and additional reporting obligations arise at the level of the taxpayers. As per the legislation in force, the large taxpayers have the obligation to comply with the SAF-T reporting obligations starting with 2022. As an exception, banks, NBFIs, and assurance/reassurance companies are required to file the SAF-T statements starting with January 2023. Also, medium taxpayers are required to fulfil such obligations starting with 2023. Non-resident taxpayers registered only for VAT purposes in Romania will have the obligation to submit the declaration starting from 1 January 2025; the same deadline is also applicable in case of small taxpayers.

In February 2024, the Romanian tax authorities published the most recent structure of the SAF-T scheme to be used in Romania for SAF-T tax reporting.

The cash accounting VAT scheme (CAVS)

The CAVS is optional for taxpayers with a turnover lower than RON 4,500,000 registered in the previous year and for newly founded companies. The right to deduct the input VAT for the acquisitions of goods/services from companies applying the CAVS is deferred until the date the payment is performed.

GO no. 278/2021 establishes the possibility of the taxpayer to apply the system at any time during the year. Also, the taxable persons who have been removed from the register of taxable persons applying the CAVS as of 1 March 2021 will have the possibility of continuing the application of CAVS, provided that they would have become eligible for application of CAVS according to the new rules.

VAT quick fixes

The provisions of Directive 1910/2018, which establishes a common regulatory framework at the EU level for the simplification of call-off stock arrangements, allocation of transport for chain transactions, and the conditions for applying the VAT exemption for intra-Community supplies (the so-called 'quick fixes'), were transposed in the national legislation and entered into force on 3 February 2020, as follows:

VAT exemption for intra-Community supplies

The VAT exemption for intra-Community supplies of goods, other than new transport means or excisable goods, is not applicable in case the supplier does not correctly report the transactions in the recapitulative statement. 

The provisions regarding the conditions for the application of VAT exemption for the intra-Community supplies are completed with the provisions of Regulation no. 1912/2018, which modifies EU Regulation no. 282/2011, introducing two relative presumptions regarding the documents necessary for proving the transport of the goods to another member state.

According to the Regulation, if the transport of goods is performed by the supplier, in order to prove that such transport took place, the supplier should hold two relevant items of evidence issued by two entities independent of each other, as well as of the supplier and the client. If the transport is performed by the client, additionally to the above-mentioned documents, the latter has to provide the seller with a written statement confirming that the goods were transported by the client. That statement should contain the issue date, the buyer’s name and address, the nature and quantity of the goods, the date and place of receipt of the goods, and, in the case of means of transportation, the vehicle identification number and the identification details of the person who accepted the goods in the buyer’s name. The statement should be provided by the tenth day of the month following the delivery.

In the above, it is presumed that the goods are transported to another member state if two of the following means of proof are held: documents relating to the dispatch or transport of the goods, such as a signed CMR document or note, a bill of lading, an air freight invoice, or an invoice from the goods carrier, or one means of proof of those previously mentioned and one document from the following: (i) an insurance policy with regard to the dispatch or transport of the goods, or bank documents proving payment for the dispatch or transport of the goods; (ii) official documents issued by a public authority, such as a notary, confirming the arrival of the goods in the member state of destination; or (iii) a receipt issued by a warehouse keeper in the member state of destination, confirming storage of the goods in that member state.

Call-off stock arrangements

The quick fixes for call-off stock arrangements are introduced in the Fiscal Code with a set of application conditions slightly different from those previously stated in Ministry of Public Finance Order no. 4120/2015. Under the new conditions, a taxable person established in one member state that transfers goods to another taxable person established in another member state, within a call-off stock arrangement, does not perform a transfer and does not have to register for VAT purposes in the territory where the goods are in stock if the following conditions are cumulatively met: 

• The goods are shipped by a taxable person to another member state in order to be supplied in that member state to another taxable person, based on a previous agreement.
• The taxable person is not established and does not have a PE in the member state to which the goods are shipped.

• The taxable person to which the goods are shipped is registered for VAT purposes in the member state to which the goods are shipped, with its identity and VAT code known to the taxable person shipping the goods.

• The taxable person shipping the goods records the transfer of goods in a special ledger provided by Regulation no. 1912/2018 and includes in the recapitulative statement both the identity and VAT code of the taxable person that purchased the goods. 

The taxable person has to register for VAT purposes and declare an assimilated intra-Community acquisition of goods in the following situations: if any of the above-mentioned conditions are not met, if the goods stay in stock for more than 12 months, if the goods are destroyed or stolen, or if the goods are sent to another member state or exported. 

Chain transactions

Chain transactions are a set of successive supplies of goods performed by an operator to an intermediary operator, which supplies the goods to a final client, with the goods being transported from the initial operator directly to the final client, from one member state territory to another. 

The transport is allocated only for the delivery performed by the operator to the intermediary operator. By exception, the transport is allocated to the supply performed by the intermediary operator if it communicated to the supplier its VAT registration code from the member state from which the goods are delivered.

Customs and international trade

Customs duties

Customs duties are those specified in the EU Common Customs Tariff and are expressed as a percentage applied to the customs value (i.e. ad valorem taxes), as a fixed amount applied to a specific quantity (i.e. specific taxes), or as a combination of the above.

Agricultural products (i.e. products from Chapters 1 to 24 of the EU Common Customs Tariff) are subject to specific taxation.

In certain cases (e.g. meat), the customs duty rate is established with regard to the cost, insurance, and freight (CIF) or the entry price of the products. In other cases, the customs duty rate is established by adding additional duties, such as agricultural components, to the ad valorem tax.

Customs value

The customs value is determined and declared by importers in accordance with the provisions of the Union Customs Code and its Delegated, Implementing, and Transitional Regulations, which took over the rules set up by the World Trade Organization (WTO) Customs Valuation Agreement (i.e. the Agreement pertaining to the implementation of Article VII of the General Agreement on Trade and Tariffs [GATT]).

Authorised Economic Operator (AEO) status

Operators that obtain AEO status benefit from simplifications regarding customs controls, obtaining certain customs authorisations, and performing customs formalities.

Moreover, through the AEO authorisation, the holder is recognised by the customs authorities as a reliable partner, giving comfort as regards observance of the safety and security standards, and can benefit from easier admittance to certain customs simplifications.

Operators authorised as an AEO will be checked at least once every three years for assessing whether they comply with the certification criteria.

Binding Tariff Information (BTI) / Binding Origin Information (BOI)

Companies can obtain rulings (BTI) from the Romanian customs authorities on the tariff classification of imported goods that are binding for the customs authorities for a three-year period, whenever goods identical to those described in the BTI are imported.

A similar type of ruling can also be obtained regarding the origin of goods (BOI). They are also valid for a period of three years from the date of issue.

The BTI and BOI shall also be binding for the holder of the decisions.

Trade measures

For some agricultural products, the European Union generally imposes specific measures (e.g. values or quantitative allowances) on imports from other third countries. It is mandatory to obtain an import licence before importing such products.

Moreover, import/export licences from relevant authorities are also required for commodities regarded as potentially hazardous to human health or to the environment (e.g. some chemical products, certain types of waste and scrap), for commodities the end-use of which is controlled (e.g. explosives), or for dual use products (i.e. both civil and military).

Excise duties

Harmonised excise products

The following products are subject to harmonised excise duties: alcohol and alcoholic beverages, manufactured tobacco, energy products (e.g. unleaded gasoline, diesel, gas, coal), and electricity.

Excise duties are due when excise products are released for consumption (e.g. imported into Romania, taken out of an excise duty suspension arrangement).

Ethyl alcohol and other alcoholic products are exempt from the payment of excise duties if they are denatured and used in the pharmaceuticals or cosmetics industry.

Some energy products subject to movement control are exempted from excise duty, provided that an end-user authorisation is obtained and the payment of excise duties is secured.

Manufactured tobacco is also exempt from excise duties when exclusively intended for scientific and quality testing.

In some cases, traders can claim a refund of the excise duties paid (e.g. excise duty paid for goods released for consumption in Romania, but intended for consumption in other EU member states; excise duties paid for goods released for consumption and then returned to the production tax warehouse for recycling, reconditioning, or destruction; excise duties paid for goods released for consumption in Romania and then exported).

For cigarettes, the excise duty is equal to the sum of the specific excise duty and the ad valorem excise duty. The specific excise duty expressed in RON/1,000 cigarettes is annually determined based on the weighted average retail price, the legal percentage related to the ad valorem excise duty, and the total excise duty. The specific excise duty for cigarettes has been set at RON 543.81/1,000 cigarettes for the period 1 April 2024 through 31 March 2025.

The excise duty rate for ethyl alcohol is RON 4,629.75/hectolitre of pure alcohol.

The excise duty level for still fermented beverages, other than beer and wines, is set at RON 555.58/hectolitre of product, while the excise duty level for apple and pear cider and mead and fermented beverages from berries is nil.

The excise duty level for fermented sparkling beverages, other than beer and wines, is set at RON 66.34/hectolitre of product, while the excise duty level for apple and pear cider and mead is nil.

The excise duty level for intermediary products is set at RON 555.58/hectolitre of product, and the level for beer is set at RON 4.62/hectolitre/1 Plato degree.

The current levels of excise duties are RON 2,375.48/1,000 litres for leaded gasoline, 2,019.60/1,000 litres for unleaded gasoline, and RON 1,850.95/1,000 litres for diesel, respectively.

Companies selling fuel in gas stations have to register with the customs authorities. The same obligation applies for companies performing wholesales of fuel, alcoholic drinks, or tobacco products.

Other excise products

Other excise products are:

• Products containing tobacco intended for inhalation without burning with tariff classification NC 2404 11 00, including those contained in reserves delivered together with electronic cigarettes and other similar personal electric vaporisation devices from NC code 8543 40 00.
• Liquids with or without nicotine intended for inhalation without burning with tariff classification NC 2404 12 00, 2404 19 90, including those contained in reserves delivered together with electronic cigarettes and other similar personal electric vaporisation devices from NC code 8543 40 00.
• Products intended for inhalation without combustion containing tobacco substitutes, with or without nicotine, with tariff classification NC 2404 12 00, 2404 19 10, including those contained in supplies delivered together with electronic cigarettes and other similar personal electric vaporisation devices to the NC code 8543 40 00.
• Non-alcoholic drinks with added sugar for which the total sugar level is between 5g and 8g/100 ml.
• Non-alcoholic drinks with added sugar for which the total sugar level is over 8g/100 ml.
• Tobacco heated products (THPs).
• Liquids containing nicotine.

Excise duties should be paid no later than the 25th day (inclusive) of the month following the one:

• in which they were sold on the national market for domestic products, or
• when the actual receipt takes place for products received from EU countries, except for the excisable goods imported, for which the excise duty is to be paid when the goods are released for free circulation.

Economic operators performing directly intra-Community acquisitions/imports of such goods are entitled to request a refund of the excise duties paid if the products are exported, supplied to another EU member state, or returned to the supplier. For the production/intra-Community acquisitions/imports of such products, prior authorisation is requested.

Property taxes

Building tax

The building tax calculation method differentiates between buildings depending on their destination usage:

• Residential buildings: Tax rate between 0.08% and 0.2% (applicable to the taxable value as per the specific table provided by the law for individuals and the value resulted from the evaluation report for legal entities).
• Non-residential buildings: Tax rate between 0.2% and 1.3%. In the case of a building used for agricultural purposes, the applicable tax rate is 0.4%.

Local authorities have been granted the authority to increase local tax rates by 50%.

The increased tax rate for building tax due by legal entities is 5% (if no revaluation was performed during the last five years).

If a building was acquired during a fiscal year, the building tax for the entire year is due by the seller. The buyer is liable to pay the tax starting with the next year.

Building tax is paid annually, in two equal instalments, by 31 March and 30 September. For the payment of the entire annual tax by 31 March, a reduction of up to 10% is granted by the Local Council.

Land tax

Owners of land are subject to land tax established at a fixed amount per square metre, depending on the rank of the area where the land is located and the area or category of land use, in accordance with the classification made by the Local Council.

Similar to building tax, land tax is paid annually, in two equal instalments, by 31 March and 30 September. A 10% reduction is granted for full advance payment of this tax by 31 March.

Transfer taxes

There are no transfer taxes for companies for the transfer of property. The income derived from such a transfer will be included into the taxable profits of the company and will be subject to the flat tax rate.

Stamp duty

For judicial claims, issue of licences and certificates, and documentary transactions that require authentication, stamp duty (in the form of notary fee) has to be paid.

Payroll taxes and social security contributions

Employers withhold, on a monthly basis, the mandatory employee’s social security contributions (35%) and the income tax (10%) from the employee’s gross/taxable salary and wire the amounts to the Romanian tax authorities.

The employer pays an insurance contribution for work of 2.25% and social insurance contribution of 4% for uncommon work conditions and 8% for special work conditions.

Certain tax incentives apply until 31 December 2028 in the construction sector, agriculture sector, food sector, and IT industry, under certain conditions.

Environmental taxes

For introducing on the national market packed goods/packaging materials, substances that are hazardous for the environment, tires/industrial oils/transport bags, electric and electronic equipment, batteries and accumulators, etc., companies have the obligation to declare and pay (by the case) related contributions to the Environmental Fund Administration.

Packaging and packaging waste management

In certain cases (e.g. for the contribution related to packaging materials introduced on the national market), the contribution to the Environmental Fund Administration is enforced for companies that fail to achieve the annual packaging waste recovery/recycling targets (i.e. for FY23-FY24, the global recovery target is 65% and the global target for recycling is 60%). Thus, the contribution to the Environmental Fund Administration is currently RON 2/kg and is owed for the difference between the annual packaging waste recovery/recycling target stipulated by law and the packaging waste recovery/recycling target actually achieved by companies.

Sale of waste

The economic operators that generate from their activities different types of waste streams and sell these items to waste collectors/recyclers have the obligation to pay a 2% contribution to the Environmental Fund Administration, amounting to 2% of the revenues obtained from the sale of all types of such waste.

Such contribution is withheld at source by the waste collectors/recyclers, which have the obligation to transfer the amounts to the Environmental Fund Administration.

Transport bags

Companies must declare the number of transport bags introduced on the national market and pay, on a quarterly basis, the related contribution (i.e. ecotax), amounting to RON 0.15/piece, for all types of transport bags, except those made with materials complying with SR EN 13432: 2002 requirements, e.g. biodegradable bags made of compostable materials. The ecotax is distinctly identified on the sales documents and its value is visibly displayed at the point of sale in order to inform end-users. The acquisition and sale of transport bags with a thickness below 50 µ is banned as of 1 January 2019.

Industrial oils

A tax amounting to RON 0.3/kg is levied (one time only) on industrial oils and lubricants introduced on the national market from outside Romania; the tax must be distinctly stipulated on the sale documents.

Air emissions

Companies conducting activities that result in the discharge of air emissions from fixed sources (e.g. nitrogen oxides, sulphur oxides, persistent organic pollutants, heavy metal emissions, such as lead, cadmium, mercury) have to pay the contributions to the Environmental Fund Administration of between RON 0.02/kg and RON 20/kg.

Electric and electronic equipment

Companies that introduce on the national market electrical and electronic equipment (EEE) have the legal obligation to declare and pay (should the legal targets not be met) to the Environmental Fund Administration a contribution (the amount of the contribution differs considering the type of equipment acquired) for the difference between the quantities of waste of electrical and electronic equipment (WEEE) corresponding to annual collection targets imposed by law and the quantities effectively collected.

Economic operators owning WEEE, including those from EEE imported for their own use, are required to hand over WEEE to the entities specialized in collecting WEEE in order to fulfil their WEEE collection/recovery targets.

Companies may fulfil the annual targets imposed by law either individually or by concluding an agreement with an operator specialised in taking over the responsibility regarding WEEE.

Batteries and accumulators

Economical operators introducing batteries and accumulators on the national market must hold evidence of the quantities and types of products introduced on the national market and must fulfil the minimum collection rates for the used batteries and accumulators. According to the legislation in place, economical operators that introduce on the national market batteries and portable accumulators have the obligation to declare and pay the related contribution of the mentioned products for the difference between the quantities of batteries and portable accumulators waste corresponding to annually collection targets imposed by law and the quantities effectively collected.

The Deposit-Return System (DRS)

Starting from 30 November 2023, Romanians will pay a deposit of RON 0.50 for each drink purchased in glass, plastic, or metal packaging, ranging from 0.1 to 3 litres. These packages will be marked with the ’Packaging with Guarantee‘ logo, indicating their eligibility for the system. Guarantee recovery will only be possible for these properly labelled packages.