Trading with Romania

By Helen Cowley, tax partner at Cassons.

Broadly, an entity is tax resident in Romania if it is incorporated in accordance with Romanian legislation or its place of effective management is in Romania.

Non-resident companies are liable to Romanian tax only on Romanian-sourced income. Calculated and paid on a quarterly basis, the standard rate of corporate tax is 16 per cent of taxable profits.

For ‘micro-enterprises’, a mandatory revenue tax is payable on turnover, instead of corporate profit tax, at one per cent for entities with at least one employee, and a rate of three per cent for entities with no employees.

In addition, newly established entities with capital of less than €10,000 are required to follow this tax regime for at least the first fiscal year and until certain conditions have been met.

If you are planning to establish a presence you should be aware that the ‘micro-enterprise’ regime could result in a start-up paying tax from the outset even if losses are sustained in the early years of trade. For advice on taxes in Romania it is imperative you take specialist advice.