NAFA Income Tax Rates in Romania for 2024

Rich in natural resources, Romania has projected itself on the world map, showcasing its cost-competitive business environment and a conducive investment climate. Romania’s tax system boasts one of the lowest flat tax, VAT and income tax rates in the European Union (EU). The country’s highly skilled workforce with the third lowest minimum wage in the EU makes Romania an attractive location for starting a business in Europe.

The tax system is administered by the official tax body, the National Agency for Fiscal Administration (Agenția Națională de Administrare Fiscală). 

The Fiscal Code provides guidance and support in the form of income tax tables for individuals and businesses. Taxpayers must familiarize themselves with these tax tables and the corresponding income tax brackets and income tax rates, for effective tax planning and to remain compliant with Romanian tax laws. What are income tax brackets? These are divisions at which tax rates may change in a progressive tax system.

In Romania, taxpayers also need to contend with mandatory social contributions. Employers and employees are required to contribute to the social fund, the health fund, an unemployment fund and to the state budget through payroll taxes.

Here you will learn more about:

• headline tax rates
• personal income tax (PIT) rates
• corporate income tax (CIT) rates
• capital gains tax (CGT) rates
• withholding tax rates for residents and non-residents
• value-added tax (VAT) rates

Headline Tax Rates in Romania

Personal Income Tax (PIT) Rate for Individuals in Romania for 2024

In Romania, tax residents are taxed on their worldwide income. Non-residents and Romanian citizens who are not domiciled in Romania are taxed only on income sourced in Romania. Residency can be proved by means of tax residence certificates.

A flat PIT rate of 10% applies to individuals in Romania. However, there are exceptions to this rule:

• different tax rates for income from dividends and for capital gains in certain circumstances
• different tax rate for income from the transfer of immovable property
• different tax rate for income from gambling activities

As a fiscal incentive, the Fiscal Code provides for a personal income tax exemption for salary income for employees in IT or those who carry out research & development and innovation projects.

Personal Income Tax Due Dates

Corporate Income Tax (CT) Rates in Romania for 2024

Applicable Corporate Income Tax (CIT) rates in Romania are summarized below.

As a fiscal incentive, the Fiscal Code provides for a 16% corporate tax relief for profit reinvested in new technological equipment used for business purposes.

Corporate Income Tax Due Dates

Capital Gains Tax (CGT) in Romania

Capital Gains Tax (CGT) in Romania is generally subject to the standard CIT and PIT rates respectively, with exceptions under the law for individual taxpayers.

Withholding Tax Rates for Residents and Non-Residents in Romania

In general, withholding tax (WHT) is levied on residents and non-residents in Romania. WHT rates may vary depending on the source of income. Income can include dividends, interest and royalties. All income obtained by a non-resident is subject to WHT. 

Certain categories of income obtained by non-residents may be tax-exempt. These include interest income, income derived from the sale of government bonds, and prizes obtained from an artistic, cultural or sports festival or competition.

As Romania is a signatory to several double taxation treaties (DTTs), WHT rates may be affected by these individual treaties. A taxpayer may benefit from the provisions of these DTTs. 

Value-Added Tax Rates in Romania

Value-Added Tax (VAT) rates in Romania are summarized below with non-exhaustive examples of their application.