TAX CHANGES FOR 2025

At the beginning of 2025 some important legislative changes regarding the Romanian tax system came into force.

We believe that it is important to inform entrepreneurs about these changes, as information is an important tool for conducting business in a safe way with respect to the current tax rules.

1. Changes to the definition of microenterprise:

Definition of micro-enterprise

We recall that a microenterprise is a Romanian legal entity that cumulatively meets the following conditions on December 31 of the previous tax year:

1. a) It realized income up to the limit of EUR 250,000, respectively EUR 100,000 as of January 1, 2026; exceeding these ceilings determines the transition to the tax regime of entity paying corporate income tax as of the quarter in which this limit was exceeded, without the possibility to opt for the following period to apply the provisions of this title (thus some companies will switch from the microenterprise income tax (3% on income) to corporate income tax (16%), having in Consider that the previous ceiling was set at EUR 500,000).

The exchange rate for determining the euro equivalent is that valid at the close of the financial year in which the income was recorded.

1. b) its share capital is held by persons other than the State and administrative-territorial units;
2. c) it is not in the process of dissolution, followed by liquidation, registered in the commercial register or with the courts, according to the laws
3. d) has at least one employee
4. e) has associates/shareholders holding, directly or indirectly, more than 25% of the value/number of equity securities or voting rights and is the only legal person determined by the associates/shareholders to be declared as a microenterprise;
5. f) has filed its annual financial statements on time,
6. Amendments regarding tax rates for companies (mainly limited liability companies, the main form of organization of entities in Romania).

(1) The tax rates on the income of micro-enterprises are:

(a) 1%, for microenterprises which realize income not exceeding 60,000 euro inclusive and which do not carry out certain activities (see below)

1. b) 3%, for micro-enterprises which:
2. realize revenues over 60,000 euro; or
3. carry out activities, principal or secondary, corresponding to CAEN codes (in brackets the current correspondence is indicated -2025 – according to CAEN REV 3):

5821 – Publishing activities of computer games,

5829 – Publishing of other software products,

6201 (6210) – Custom software production activities (customer oriented software),

6209 (6290) – Other information technology service activities,

5510 – Hotels and similar accommodation,

5520 – Holiday and short-stay accommodation facilities,

5530 – RV parks, camping and camping sites,

5590 – Other accommodation services,

5610 (5611,5612) – Restaurants,

5621 (5621,5622) – Event catering activities,

5629 (becomes 5622) – Other food service activities n.e.c.,

5630 – Bars and other beverage serving activities,

6910 – Legal activities – only for incorporated businesses that are not fiscally transparent entities formed by attorneys at law,

8621 – General health care activities,

8622 -Specialized nursing activities,

8623 – Dental activities,

8690 (8691, 8692, 8693, 8694, 8695, 8696, 8699) – Other human health activities.

Important notes!

1. As of January 1, 2025, it should be taken into consideration that when classifying the above activities (for the purposes of determining the tax regime), both principal and secondary activities are taken into account.
2. An employee means a person employed on a full-time individual employment contract or persons employed on a part-time individual employment contract if the fractions of the working time provided for therein, added together, represent the equivalent of a full time or have concluded management or agency contracts, in accordance with the law, if their remuneration is at least at the level of the gross minimum basic salary per country guaranteed in payment.
3. If, during the tax year, the income realized by a microenterprise exceeds 60,000 euro or the microenterprise starts to carry out the activities referred to above, starting from the quarter in which such situations occur, the 3% tax rate is applicable.
4. If, during the tax year, a micro-enterprise ceases to carry out the activities referred to above and the income does not exceed 60,000 euro, from the quarter in which such situations arise, the tax rate of 1% is applicable.
5. The limit on the income realized is verified by taking into account the income realized by the Romanian legal entity, cumulated with the income of the related companies.
6. The condition restricting the income from consultancy and/or management has been removed from the microenterprise regime.
7. Tax facilities for employees in IT, construction, agriculture, food processing are eliminated
8. Changes in the dividend tax rate

Increases the tax rate from 8% to 10% for dividends distributed on or after January 1, 2025. Increases the dividend tax rate from 8% to 10% also for dividends distributed/paid to non-resident persons, to correlate with the tax regime applicable to dividends distributed/paid to resident persons.

4. Increase in the gross minimum wage:
5. a) from 3700 lei to 4050 lei (therefore the net minimum wage is 2739 lei, and the employer will pay 4685 lei per month, including the contributions due by the employer)
6. b) in construction, it increases to 4582 lei (therefore the net minimum wage is 2574 lei, and the employer will pay 4134 lei per month – including the contributions due from it)