Taxation system in the European Union

Income tax in Romania

In Romania, the following persons are liable for payment of income tax:

• resident natural persons;
• non-resident natural persons who carry out a self-employment activity through a permanent establishment in Romania;
• non-resident natural persons engaged in salaried employment in Romania;
• non-resident natural persons who receive income under Article 29 of the Fiscal Code.

Income tax is levied on the following income:

• for Romanian resident natural persons, domiciled in Romania, income obtained from any source, within and outside Romania;
• for resident natural persons, other than those referred to above, income obtained from any source, within and outside Romania, from the date on which they became resident in Romania;
• for non-resident natural persons who carry out a self-employment activity through a permanent establishment in Romania, the net income attributed to the permanent establishment;
• for non-resident natural persons engaged in salaried employment in Romania, the net salary income from such employment;
• for non-resident natural persons who receive income under Article 68(d) of the Fiscal Code, the income determined as per the rules laid down in this Title, corresponding to the relevant income category.

The tax rate is 10% and is applied to the taxable income corresponding to each source of each category of income for determining the tax on the income from:

• self-employment;
• intellectual property rights;
• wages and salary equivalents;
• rental income;
• investments;
• pensions;
• agricultural, forestry and fish farming activities;
• prizes;
• other sources.

Corporation tax in Romania

In Romania, the following categories of persons are liable for payment of corporation tax:

• Romanian legal entities;
• foreign legal entities carrying out a business activity through a permanent establishment or several permanent establishments in Romania;
• foreign legal entities whose place of effective management is in Romania;
• foreign legal entities receiving income under Article 12(h) of the Fiscal Code.
• legal entities with their registered office in Romania, established in accordance with EU law;
• foreign legal entities resident in a third country carrying out their business activity in Romania through one or several arrangements treated as permanent establishments, for cases involving the existence of hybrid mismatches or tax residency mismatches;
• tax-transparent entities, for cases (...)

A corporation‏ tax rate of 16% is applied to the taxable profit.