Taxes in Romania (2026)

Romania has one of the lowest tax burdens in the European Union for small companies. Below are the main taxes that apply to a Romanian company and its shareholders in 2026, after the changes introduced by Law 141/2025 and Law 239/2025.

Corporate income tax

The standard corporate income tax rate is 16% of taxable profit. It applies to Romanian companies and to foreign companies that operate in Romania through a permanent establishment, such as a branch.

The micro-enterprise regime: 1% of revenue

Small companies can pay a 1% tax on revenue instead of the 16% profit tax. From 1 January 2026 the main conditions are:

• revenues of up to EUR 100,000 in the previous year, counted together with the revenues of linked companies;
• at least one employee, or an administrator paid under a mandate contract at least at the level of the minimum gross salary;
• the share capital is held by persons other than the state or local authorities;
• an associate who holds more than 25% of the shares can do so in only one micro-company;
• the company is not in dissolution or liquidation;
• some activities, such as banking, insurance or gambling, cannot use the regime.

The 3% rate that used to apply to micro-companies without employees no longer exists. More details are on our page about the micro-company in Romania.

Dividend tax

Dividends paid from 1 January 2026 are taxed at 16%, for individuals and for non-resident shareholders. The company that pays the dividend withholds the tax. Dividends paid to a company that has held at least 10% of the shares for at least one year can be exempt, including under the EU Parent-Subsidiary Directive, and a double tax treaty can reduce the rate for a non-resident shareholder.

Withholding tax for non-residents

Interest, royalties, commissions and certain services paid by a Romanian company to a non-resident are subject to a 16% withholding tax. The rate can be reduced under one of the approximately 90 double tax treaties signed by Romania, if the non-resident presents a certificate of tax residence.

VAT

• Standard rate: 21%, since 1 August 2025.
• Reduced rate: 11%, for certain goods and services such as food and medicines.
• Registration threshold: a Romanian company must register for VAT when its annual turnover exceeds 395,000 lei (since 1 September 2025). It can also register voluntarily.
• Companies established outside the EU that carry out taxable operations in Romania must register regardless of their turnover.

More details are on our page about VAT registration in Romania.

Payroll taxes

• Personal income tax: 10%.
• Pension contribution (CAS): 25%, paid by the employee.
• Health contribution (CASS): 10%, paid by the employee.
• Work insurance contribution (CAM): 2.25%, paid by the employer.

Local taxes

Companies also pay local taxes on the buildings, land and vehicles they own. Each local council sets the rates, within the limits of the Fiscal Code.

Romanian tax rules changed several times in 2025 and 2026. Contact us for an analysis of your situation before you set up your company.