Romania's corporate taxation system includes various direct and indirect taxes, with CIT and VAT being the most significant taxes for companies operating in the country. Understanding the various tax rates, tax brackets, and legislation is crucial for corporations doing business in Romania.
Corporate Income Tax
Corporate Income Tax (CIT) in Romania is a direct tax levied on the net income of companies operating in the country. The Fiscal Code (Law No. 227/2015), along with subsequent amendments, governs corporate income tax in Romania.
Domestic Companies:
Domestic companies in Romania are taxed on their worldwide income. As of 2021, the standard CIT rate is 16%.
Foreign Companies:
Foreign companies with a permanent establishment in Romania are subject to CIT only on the income attributable to the Romanian permanent establishment. The standard CIT rate of 16% applies.
Value Added Tax (VAT)
VAT is an indirect tax in Romania, applicable to the sale of goods and services. The Fiscal Code (Law No. 227/2015) governs VAT in Romania. VAT is levied on every stage of the supply chain, from production to consumption. There are three VAT rates in Romania:
- Standard rate: 19% (applied to most goods and services)
- Reduced rate: 9% (applied to specific goods and services, such as food products, medicines, and hotel accommodations)
- Super-reduced rate: 5% (applied to certain goods and services, such as social housing, newspapers, books, and cultural events)
Sales Tax
Romania does not impose a separate sales tax, as the VAT system covers the taxation of goods and services.
Import Duties
Import duties in Romania are governed by the European Union (EU) customs legislation, as Romania is a member of the EU. Romania follows the EU's Common Customs Tariff (CCT) for imports from non-EU countries. Import duties vary depending on the product and its classification under the Combined Nomenclature (CN) code. Rates can range from 0% to 17% or higher, depending on the type of goods. In addition to import duties, imported goods are also subject to VAT.
Export Duties
Romania, as an EU member, does not impose export duties on goods exported to other EU countries. For exports to non-EU countries, Romania follows the EU's export regulations, which generally do not impose export duties except in specific cases, such as the export of certain agricultural or cultural goods.
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