Romania, as part of the European Union and the Schengen area, including land borders, has agreed to adopt a fiscal recovery plan starting January 1, 2025, to get the economy back on track, in line with the economic strategies adopted by the European Commission. EU countries, including Romania, had to adopt a bunch of rules to adjust their taxes so they can get through the global crisis caused by various geopolitical and military stuff.
These tax increase measures were adopted in a balanced manner, so that Romania continues to enjoy tax advantages for starting and carrying out investments on its territory. The table below provides an overview of the standard VAT and corporate income tax rates in EU countries.
In our opinion, even with the slight increase in taxation, Romania still offers foreign investors a number of advantages, including low overall labor costs, low wages compared to other countries, digitization—the digitization process is ongoing (numerous fully digitized procedures are currently being implemented, documents can be signed remotely using e-signatures, which ensures the speed and ease of commercial transactions), Romania is and will continue to be an important commercial hub due to its geostrategic position. Romania is a country with a high level of security for citizens and property. Romania’s landscape and natural potential are key arguments for the development and maintenance of a wide range of businesses on its territory.
Currently, as a result of the adoption of new fiscal measures:
- The tax rate is increased from 10% to 16% for dividends distributed starting January 1, 2026,
- the standard VAT rate is increased from 19% to 21%, with the application of a reduced VAT rate on housing until August 1, 2026, and an increase in the reduced VAT rate from 9% to 11% for a more limited range of goods and services.
- The corporate income tax rate remains at 16%;
- the 1% tax, respectively 3% for micro-enterprises that meet the legal conditions (Note: please find the legal conditions on our website www.legality.ro) remains in place.
This article provides a general overview and should not be considered personalized tax advice. Individual circumstances and specific tax situations may require further analysis by a qualified professional.
| EU COUNTRY | COMPANY PROFIT TAX (%) | VAT (%) |
| Austria (AT) | 23.0% | 20 |
| Belgium (BE) | 25.0% | 21 |
| Bulgaria (BG) | 10.0% | 20 |
| Croatia (HR) | 10-18.0% (>1mil euros) | 25 |
| Cyprus (CY) | 12.5% | 19 |
| Czechia (CZ) | 21.0% | 21 |
| Denmark (DK) | 22.0% | 25 |
| Estonia (EE) | 22.0% | 24 |
| Finland (FI) | 20.0% | 25.5 |
| France (FR) | 25.8% | 20 |
| Germany (DE) | 29.9% | 19 |
| Greece (GR) | 22.0% | 24 |
| Hungary (HU) | 9.0% | 27 |
| Iceland (IS) | 21.0% | 24 |
| Ireland (IE) | 12.5% | 23 |
| Italy (IT) | 27.8% | 22 |
| Latvia (LV) | 20.0% | 21 |
| Lithuania (LT) | 16.0% | 21 |
| Luxembourg (LU) | 24.9% | 17 |
| Malta (MT) | 35.0% | 18 |
| Netherlands (NL) | 25.8% | 21 |
| Norway (NO) | 22.0% | 25 |
| Poland (PL) | 19.0% | 23 |
| Portugal (PT)* | 20% (16% in case of MSC) | 23 |
| Romania (RO) | 16.0% | 21 |
| Slovakia (SK) | 21.0% | 23 |
| Slovenia (SI) | 22.0% | 22 |
| Spain (ES) | 25.0% | 21 |
| Sweden (SE) | 20.6% | 25 |
* The Portuguese Parliament has approved a one percentage point reduction in the standard corporate income tax rate (from 21% to 20%), as well as the reduced rate (from 17% to 16%) applicable to small and medium-sized enterprises and small/medium-sized enterprises for the first EUR 50,000 of taxable income.
Start-ups benefit from a reduced corporate income tax rate of 12.5%, subject to European rules on de minimis aid.