Romania's Tax System 2025

Corporate Income Tax: 16%

Taxpayers:

• Romanian legal entities, except those subject to the micro-enterprise tax regime and tax-transparent entities.
• Non-resident legal entities with a permanent establishment or place of effective management in Romania.

Loss carry-back is not permitted. Losses may be carried forward for up to 5 years, with a deduction limit of 70% of the taxable profit.

Only expenses incurred for income-generating purposes are deductible; some are subject to specific limits:

• Social expenses – up to 5% of total salary expenses.
• Vehicle-related expenses – 50% deductible for acquisition, operation, maintenance, and repair (including leasing and rental), unless used exclusively for business purposes.
• Headquarters-related expenses – 50% deductible if the registered office is located in a private residence or residential building; 100% non-deductible if used for personal purposes.
• Protocol expenses – up to 2% of the gross accounting profit; must be added back to the tax base.
• Expenses related to the sale of receivables – only 30% of the net loss is deductible.
• Management, consultancy, and similar services from entities in non-cooperating jurisdictions (no exchange of information treaty with Romania) are non-deductible if the transaction is considered artificial. A proposal is also under discussion to extend this to all intra-group services from non-resident affiliated companies.

Depreciation:

• Only straight-line depreciation is allowed for buildings.
• For vehicles with up to 9 seats, depreciation is capped at RON 1,500 per month.
• Goodwill amortization is not tax deductible.

Excess borrowing costs:

• EUR 500,000 threshold for loans not related to assets under construction.
• EUR 1,000,000 threshold for loans financing assets under construction.
• If exceeded, deductibility is limited to 30% of: Gross profit + Corporate income tax + Tax depreciation + Excess borrowing costs − Non-taxable income.

Minimum turnover tax:

To counter aggressive tax planning, companies with annual turnover above EUR 50 million must pay a 1% turnover tax if their corporate profit is lower than this amount or if they report a loss.