Romania

The standard CIT rate is 16% for Romanian companies, foreign companies operating through a permanent establishment (PE) in Romania and foreign companies that are tax resident in Romania due to place of effective management. Resident companies are taxed on their worldwide income unless a double tax treaty (DTT) stipulates otherwise. 

The CIT due for nightclubs and gambling operations is either 5% of the revenue obtained from such activities or 16% of the taxable profit, whichever is higher.

Minimum turnover tax (IMCA)

Taxpayers (other than credit institutions and oil and gas companies) that registered a turnover of over EUR 50 million in the previous year and for which the CIT is lower than the IMCA will be required to pay CIT at the level of the IMCA. In the case of a tax group, the IMCA is calculated by the responsible legal entity by summing all the group members’ turnovers.

As an exception, companies that have activities in the oil and gas sectors and that registered in the previous year a turnover of more than EUR 50 million will owe, in addition to the CIT, a specific turnover tax.

Credit institutions (i.e. Romanian legal entities and Romanian branches of credit institutions – foreign legal entities) are liable for a newly-introduced turnover tax in addition to the CIT.

Economic operators that exclusively conduct activities of distribution/supply/transport of electricity and natural gas that are regulated/licensed by the National Energy Regulatory Authority are exempt from the application of the IMCA.

Micro-company tax regime

A Romanian legal entity can opt for the application of micro-company revenue tax in lieu of the standard CIT if it cumulatively meets the following conditions as of 31 December of the previous year:

• The revenues derived did not exceed the Romanian leu equivalent of EUR 500,000.
• The share capital is owned by persons other than the state and administrative-territorial units.
• It is not under dissolution, followed by liquidation.
• At least 80% of its total revenues are generated from other than consulting and management activities, except tax consultancy.
• Has at least one employee, except tax consultancy.
• Has associates/shareholders that hold, directly or indirectly, more than 25% of the value/number of participation titles or voting rights and is the only legal entity established by the associates/shareholders to apply the micro-company provisions.
• Has submitted the annual financial statements on time if it has this obligation according to the law.

The micro-company regime cannot be applied by Romanian legal entities conducting activities in banking; insurance and reinsurance of the capital market, including intermediation activities in those fields; gambling; or exploration, development, or exploitation of oil and natural gas deposits.

Romanian legal entities, with the exception of those that carry out activities corresponding to the CAEN HORECA (Hotels, Restaurants, Bars, and Coffee shops) codes, can opt to apply micro-company tax as of the fiscal year following that in which they meet the conditions. Romanian legal entities that carry out activities corresponding to the CAEN codes for HORECA can opt for the payment of micro-company tax (without having to fulfil the above conditions) or for the payment of CIT.

The tax rate on micro-company revenues is:

• 1% for micro-companies with revenues that do not exceed EUR 60,000 and do not carry out certain specific activities.
• 3% for micro-companies with revenues of more than EUR 60,000 or that carry out certain specific activities.

If a micro-company derives revenues of more than EUR 500,000 or its revenues from consulting and management are 20% or more of the total revenues during a fiscal year, it owes CIT as of the quarter in which they exceeded those limits.

The calculation and payment of tax for micro-companies shall be performed quarterly, by the 25th day (inclusive) of the month following the quarter for which the tax is calculated. 

The dividend income received from a subsidiary located in another member state of the European Union can be deducted when calculating the micro-company tax, to the extent that both the micro-company and the subsidiary meet the EU Parent-Subsidiary Directive conditions.

Local income taxes

There are no county or local taxes on corporate income.