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Romania

Taxes

Want to setup a company in Romania? Reading this will help you becoming knowlegeable on the specific tax laws and rates for a LLC (SRL) which is the most common company type in Romania.

Romania taxes resident entities on their worldwide income. The usual tax rate for income earned abroad remitted back, from our research, and these things do change, is 16%. The country does not have major incentives to transfer in income earned abroad. Taxes are lower than average in Romania because the highest corporation tax rate is 16%. This ranks Romania as 57th overall in terms of corporate tax rate worldwide.

The value added tax (VAT) rate is 19.00%, that ranks Romania as 127th overall with regards to value added tax rate worldwide. In terms of other taxation, an employer will contribute 27.45% to the equivalent of a social security fund and an employee will contribute 16.50%. The overall complexity of the tax system is medium. This is measured by average time to comply with a country's labor tax requirements is as it is 80hours. Contributing to this is the number of yearly labor tax payments, which is 1 in RO.

Thin capitalisation mandates are officially enacted. This refers to any type of requirements on given company with respect to debt-to-asset ratios.
Dividends paid by a resident entity are subject to a final 5% withholding tax. Dividends received from a foreign company are usually subject to corporate income tax, unless dividends are paid by a EU resident entity or from a country that has concluded a tax treaty with Romania, and shareholder holds at least 10% of the share capital. A dividend is a distribution of a portion of a company earnings, passed by the board of directors, to shareholders. Dividends can be issued as stock, cash, or property.
Capital Gains are subject to Corporate Income Tax. However, an exemption may apply, for the gains from the disposal of shares, if the recipient holds at least 10% of share capital and company is resident or from a EU member state or from a country that has concluded a tax treaty with Romania. A capital gains tax is levied on the profits that a corporation or natural person realizes when he or she sells sells a capital asset for a price that is higher than the purchase price.

The interest withholding tax rate is estimated at 16%. Which means that the relevant tax authorities expects LLC (SRL)'s to withhold 16% of interests paid abroad. The dividends withholding tax rate is 5%. This should be interpreted that the relevant tax authorities expects legal entities to pay tax on 5% of dividends remitted abroad. The royalties withholding tax rate is 16%. This means that the taxman expects relevant legal entities to withhold 16% of royalties paid to non-residents. Payments to EU resident companies may be exempted if certain requirements are met. Withholding tax rates may be reduced under a tax treaty.
There is no known tax on wealth in Romania. There are no known inheritance and transfer taxes in Romania. There is a real property tax. We are aware of widely used R&D initiatives that provide breaks on taxation in this country.

The above is not tax or legal advice for your company circumstances. We can point you to an accountant in Romania who can answer all your questions. Want to work together? Click the free consultation button above.

Country details

Romania
RON
Bucharest
Europe
Romanian, Hungarian, rom
21,959,278

Tax treaties

Country Type Date Signed
Spain DTC  1979-05-24
Denmark DTC  1976-12-13
Turkmenistan DTC  2008-07-16
Korea, Democratic People's Republic of DTC  1998-01-23
Japan DTC  1976-02-12
Albania DTC  1994-05-11
Poland DTC  1994-06-23
Czech Republic DTC  1993-11-08
Luxembourg DTC  1993-12-14
Singapore DTC  2002-02-21
Belgium DTC  1996-03-04
Greece DTC  1991-09-17
Morocco DTC  2003-07-02
Slovakia DTC  1994-03-03
Mexico DTC  2000-07-20
Estonia DTC  2003-10-23
United Arab Emirates DTC  1993-04-11
Nigeria DTC  1992-07-21
Sweden DTC  1976-12-22
Belarus DTC  1997-07-22
San Marino DTC  2007-05-23
Turkey DTC  1986-07-01
Australia DTC  2000-02-02
France DTC  1974-09-27
Latvia DTC  2002-05-25
Georgia DTC  1997-12-11
Guernsey TIEA 2011-01-12
Slovenia DTC  2002-07-08
Pakistan DTC  1999-07-27
Azerbaijan DTC  2002-10-29
Ireland DTC  1999-10-21
Germany DTC  2001-07-04
China DTC  1991-01-16
Switzerland DTC  1993-10-25
Malta DTC  1995-11-30
Israel DTC  1997-06-15
Korea, Republic of DTC  1993-10-11
Austria DTC  2005-03-30
Bangladesh DTC  1987-03-13
Former Yugoslav Republic of Macedonia DTC  2000-06-12
Cyprus DTC  1981-11-16
Algeria DTC  1994-06-28
Egypt DTC  1979-07-13
Bulgaria DTC  1994-06-01
Malaysia DTC  1982-11-26
Indonesia DTC  1996-07-03
Jordan DTC  1983-10-10
India DTC  2013-03-08
Iceland DTC  2007-09-19
Portugal DTC  1997-09-16
Kuwait DTC  1992-07-26
Uruguay DTC  2012-09-14
Moldova, Republic of DTC  1995-02-21
Italy DTC  1977-01-14
Uzbekistan DTC  1996-06-06
Sri Lanka DTC  1984-10-19
Tunisia DTC  1987-09-23
United Kingdom DTC  1975-09-18
Canada DTC  2004-04-08
Philippines DTC  1994-05-18
South Africa DTC  1993-11-12
Norway DTC  1980-11-14
Montenegro DTC  1996-05-16
Netherlands DTC  1998-03-05
Serbia DTC  1996-05-16
Namibia DTC  1998-02-25
Saudi Arabia DTC  2011-04-26
Croatia DTC  1986-04-29
Russian Federation DTC  1993-09-27
Ecuador DTC  1992-04-24
Lebanon DTC  1995-06-28
Hungary DTC  1993-09-16
Lithuania DTC  2001-11-26
Qatar DTC  1999-10-04
Armenia DTC  1996-03-25
Bosnia and Herzegovina DTC  1986-04-29
Thailand DTC  1996-06-26
Ukraine DTC  1996-03-29
Kazakhstan DTC  1998-09-21
United States DTC  1973-12-04
Finland DTC  1998-10-27

Tax treaties Map

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Although we use our best efforts to keep the information of this site accurate and up-to-date, we make no representations or warranties with respect to the accuracy, applicability, fitness, or completeness of the contents of this website. We disclaim any warranties expressed or implied, merchantability, or fitness for any particular purpose. We shall in no event be held liable for any loss or other damages, including but not limited to special, incidental, consequential, or other damages. The contents of this website are just for illustrative purposes and are NOT to be considered as a legal opinion or tax advice and should not be relied upon as such. Far Horizon Capital Inc., and any associated company, is not engaged in the practice of law or tax. If you wish to receive a legal opinion or tax advice on the matter(s) in this website please contact our offices and we will refer you to an appropriate legal practitioner. Use of our websites FlagTheory.com, Incorporations.io, Residencies.io, Passports.io, is subject to our terms and conditions.

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