Latest tax rates in Romania

Below we cover all types of taxes in Romania and note what has changed in 2025 and which tax rates apply. Before we start and examine all Romanian taxes, we would like to discuss the differences in tax revenues within the EU. The differences within the countries are serious.
We clarify:   How much tax do you pay in Romania? (for example DE vs. RO) - how much is left?

Here are Germany's, a Western European country, revenues measured by GDP. Simply put, Germany generated 46.7% of revenue measured by the annual gross domestic product in 2019. The German state coffers were therefore filled with almost 50% of the total GDP.

Source: ec.europa.eu

The influence of politics in Germany and its strict tax policy with hidden and also openly visible tax increases accurately reflect the steadily increasing percentage of revenues. Starting from 43.8% in 2010 to over 46.7% in 2019.

One of the highest values ​​in the EU: 13.3% direct tax revenue*/GDP 2019

In addition, we provide further legal advice in this article to help you save taxes as best as possible.

Here are the revenues of Romania measured by GDP. Simply put, Romania generated 31.8% of revenues measured by the annual gross domestic product in 2019.

Source: ec.europa.eu

The tax policy in Romania reduces taxes year after year to stimulate investment and immigration. Starting from 1995 with 10.6% direct taxes/GDP to 4.8% in 2019.

Lowest value in the EU: 4.8% direct tax revenue*/GDP 2019
*Direct tax revenues: corporate tax, income tax, etc.

Here is an overview of the Romanian taxes:

1. Corporate Tax Romania (SRL)
2. Capital Gains Tax Romania Dividends
3. Profit Tax Romania
4. VAT Romania
5. Income tax Romania
6. Payroll tax Romania
7. Tax Consulting Romania Accounting
8. Company foundation Romania

The corporate tax, also known as a company tax, is calculated as a percentage of the profit or turnover of a company. First of all, it should be mentioned that there is no trade tax in Romania. The valid tax rate at company level for capital companies is 16% of the profit. A capital company or legal entity in Romania, like the Limited Liability Company, is equivalent to the Romanian legal form of the S.R.L.



There is a special case in Romania: In Germany, for example, limited liability companies or general companies are considered basic company structures and are taxed at the personal income tax rate. It is different in Romania: The two legal forms S.C.S. (limited partnership) and S.N.C. (general partnership) are also legally regarded as capital companies in Romania and are subject to this taxation.

However, there is a notable exception to the corporate tax of 16% on profits:

1. If the company's turnover falls below 250,000 EURO per year
a) The company can become a profit tax payer company, which results in paying 16% tax on the profit
b) Or only pay 1-3% tax up to 250,000 EURO on annual turnover


Example: The company "Baumann" has a turnover of €250,000 in 2025 and generates a profit of €200,000

Question: What taxes will be due?

Answer: If you have at least one employee, you have to pay a tax of 3% on your turnover of €250,000. You have to pay €7,500 in taxes - and that's with a profit of €200,000! (If you have no employees, it's 16% = €32,000 in taxes)

Mistake 1: If the corporate profit tax rate in Romania is 16%, €32,000 in taxes would have to be paid.
Mistake 2: If the corporate profit tax rate in Germany is 30%, €60,000 in taxes would have to be paid.

This only applies to corporate taxation - are profit distributions planned - DE and RO differ drastically again!

The capital gains tax, also known as withholding tax, is calculated as a percentage of the profit to be paid out. Whether profits are distributed in the form of a dividend from your own company or dividend payments from listed companies (shares) held, a dividend tax is payable. In Romania this is 10%.



Investments by Romanian companies in other Romanian companies and the payment of dividends between them do not trigger dividend tax and are completely tax-free. The condition that a stake of at least 10% has existed for at least 1 year has been removed. Dividends that a foreign company receives as a result of an investment in a Romanian company are taxed at 10% at source. Parent-subsidiary companies in Romania can therefore shift profits tax-free.

A profit distribution for natural persons triggers 10% dividend tax:

1. If the distribution falls below 48,600 RON (approx. 9,900€) per year:
a) There is no additional social security tax in Romania
b) If the limit is exceeded, natural persons residing in Romania will be charged 4,050 RON (approx. 800 EUR). Never more!
c) If the limit is exceeded, natural persons who do not reside in Romania will no longer have to pay any additional social security tax in Romania!
d) If the limit is exceeded, legal entities, regardless of where they are located, will no longer be required to pay any additional social security tax in Romania.

Example: The company "Erdmann" has a turnover of €240,000 in 2025 and generates a profit of €220,000. €220,000 in profit is now to be paid out to the managing director as a dividend.

Question: What taxes are due on the distribution of profits?

Answer: €220,000 is to be paid out, which means that 10% dividend tax is due. The managing director, Mr Erdmann, lives in a country with low taxes (for example the UK or Cyprus) and has his profits paid out there. Only 3% tax is due on €6,600. A dividend tax of 10% is not due due to the EU parent-subsidiary directive and his place of residence - and there are also no social security contributions. He has €213,400 of the €220,000 original company profit left to use as he pleases.

Mistake 1: Don't pay out profits too quickly. A company should mature for 1-3 years before paying out to individuals. Better: make real estate or other investments.
Mistake 2: Simply transfer profits (withdrawals) to your own private account in your home country.

Foreign natural persons who are not resident or registered as domiciled in Romania, regardless of their place of residence, pay, in the best case, only 10% dividend tax on profit distributions.

If you invest in a Romanian property instead of a profit payout and have the rental income transferred to your private account in your home country - this income is exempt from tax. (Clearly regulated in the DBA)

For comparison: In Germany, 26.75% tax is levied on profit distributions.

A profit tax is, as the name suggests, a tax on profit. As discussed above, a profit tax of 16% is due for capital companies - or if you choose a micro-company with a turnover of up to EUR 250,000 per year - then the tax on turnover is 1-3%. Profit withdrawals (dividends) are taxed at 10%. For further details, please contact 1. Corporate tax and 2. capital gains tax / dividends to take a closer look.



Romania is bravely continuing to reduce all profit taxes year after year. Since 2018, income taxes for individuals have been reduced from 16% to 10%. The turnover level for capital companies has been increased from €100,000 to €250,000 in 2025 in order to benefit from the 1-3% tax rate. Dividend payments to private individuals were still subject to a 15% tax burden in 2015. Since 2025, a uniform 10% dividend tax has applied.

In order to prevent emigration and promote immigration, further tax relief is expected in the coming years.

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4. VAT Romania

VAT liability, which means an obligation to apply for a VAT ID and to register for VAT, is binding for sales of more than 300,000 RON per year. Depending on the exchange rate, this is around 60,000 EUR. Natural and legal persons who make more than the equivalent of around 60,000 EUR in sales per year are obliged to declare and pay VAT. The standard VAT rate is 19% in Romania.



When Romania joined the EU, it also adopted the so-called reverse charge procedure. If the reverse charge regulation is used, the invoice is issued without VAT. This regulation applies to corporate customers who also have a VAT ID. In the books of the supplier and customer as well as in the VAT returns, the VAT (which has not actually been paid) is recorded both as deductible and as collected VAT.

Exports to third countries are exempt from VAT

1. A reduced VAT rate or exemption from VAT shall only apply in these cases
a) Exemptions apply to: social, medical institutions, education and research
b) Exemptions apply to: investment firms, credit and insurance businesses
c) 9% VAT on medicines, food and hotels
d) 5% VAT for culture, cinema and magazines

Example: The entrepreneur "Rudermann" makes a turnover of €100,000 in 2025 with digital goods and therefore has no expenses (profit: €100,000). The turnover is 50% each from private and corporate customers within the EU.

Question: Which sales taxes are due?

Answer: Mr. Rudermann is subject to sales tax and does not pay sales tax on 50% of his sales thanks to the reverse charge procedure. He owns a second Romanian company that his private customers pay their invoices to. The second company has a turnover (50k) of less than €60,000 and is therefore a small business and exempt from sales tax.

Mistake 1: No splitting up in several companies to save VAT.
Mistake 2: No use of the reverse charge procedure

Up to three companies per person may be operated with a 60k EUR threshold to be exempt from VAT. Generally 3 companies at the same time per person.

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5. Income tax Romania

In general, a flat income tax rate of 10% applies to private persons. This only has to be paid by self-employed persons and freelancers who live in Romania and have chosen a sole proprietorship (SA) rather than a corporation. Romania, including Bulgaria, has the lowest income tax rate in the EU at 10%. However, there are exceptions for even lower tax rates: (e.g. tax rate for income from the transfer of real estate, etc.)



Exemption from income tax: The Romanian state has classified a few categories of employees as exempt from income tax. Among them: IT specialists – To obtain the tax exemption, a well-documented process must be followed under strict regulations.

A profit distribution (e.g. from a sole proprietorship) can trigger a small additional tax for natural persons:

1. If the distribution is less than 48,600 RON (approx. 9,900€) per year:
a) There is no longer any extra tax for private persons in Romania.
b) If the limit is exceeded, natural persons residing in Romania will have to pay an additional social security tax of RON 4,050.
c) If the limit is exceeded, private persons who are not resident in Romania and regardless of where they live will no longer have to pay any additional social security tax in Romania.
d) For corporations, regardless of where they are located, no additional social security tax is payable in Romania.

Example: The company "Wassermann" has a turnover of €250,000 in 2025 and generates a profit of €200,000. €100,000 in profit is now to be paid out to the managing director as a dividend.

Question: What taxes are due on the payout of winnings?

Answer: €100,000 is to be distributed, which means that 10% dividend tax is due. The managing director, Mr Wassermann, lives in a low-tax country and has his profits paid out there. He has €90,000 left over for his own use.

Mistake 1: Don't pay out profits too quickly. A company should mature for 1-3 years before paying out to individuals. Better: make real estate or other investments.
Mistake 2: Simply transfer profits (withdrawals) to your own private account in your home country.

Foreign natural persons who are not resident or registered as domiciled in Romania, regardless of their place of residence, are only charged 10% dividend tax in Romania - which can be credited against the domestic income tax return.

If you invest in a Romanian property instead of a profit payout and have the rental income transferred to your private account in your home country - these earnings are exempt from tax. (Clearly regulated in the European DBA)

For comparison: In Germany, 26.75% tax is levied on profit distributions.

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6. Income tax Romania

The income tax for salaries and wages is 10%. Social security contributions and income tax are calculated, withheld and paid by the employer. The total employee share is: 45%. The total employer share is: 2.25%



25% pension insurance employee share, of which 3.75% is for private pension provision
4-8%  Pension insurance for special employment conditions Employer's contribution
10% health insurance contribution of the employee's monthly gross income.
2.25% unemployment insurance contribution of the employer's monthly gross income.

4050 RON gross = 2450 RON net (employee share 45% = 25% pension insurance, 10% health insurance, 10% income tax)