Reviewed: January 2026 by Eduard Perlanovschi, Junior Associate
Romania has established itself as one of Europe’s most business-friendly tax environments. With flat tax rates, low incorporation costs, and full EU market access, it has become a preferred destination for entrepreneurs, digital nomads, and investors who want to base their EU operations in a stable, low-cost jurisdiction.
This guide explains the Romanian tax system in 2026 including corporate tax, Micro-company rules, VAT, dividends, payroll, self-employed taxation and mandatory digital compliance (RO e-Factura and SAF-T) so you can structure your investment or freelance activity efficiently and remain fully compliant.
LegalHunt Platform glance: Every step from company setup to invoicing, VAT, payroll, and accounting can be managed through LegalHunt’s all-in-one platform. The system auto-generates compliant documents, syncs with your accountant, and handles all filings with ANAF digitally.
Why Romania’s Tax System Is Attractive
Romania’s tax framework has long been one of the country’s strongest competitive advantages in the region. While EU-aligned and increasingly modernized, it remains simpler and more investor-friendly than many Western jurisdictions. Several features consistently stand out for foreign businesses assessing market entry.
Romania offers one of the lowest and most predictable flat-tax regimes in the EU.
Corporate profits are taxed at 16 %, personal income at 10 %, and Micro-companies benefit from a 1% turnover tax in 2026.
Advantages:
Predictable flat taxes — no progressive brackets.
Low effective corporate burden — often under 15 %.
Full foreign ownership — no local partner required.
Extensive treaty network — 90+ double-tax treaties reduce or eliminate withholding.
EU & OECD alignment — compliance systems (e-Factura, SAF-T, e-Tax) already implemented.
Tax incentives — R&D and reinvested profit enjoy reductions or exemptions.
LegalHunt insight: the platform can instantly compare micro vs corporate tax outcomes for your projected turnover, so you can pick the most efficient regime before incorporation.
Corporate & Business Taxation in Romania (2026 Update)
Romania operates a dual corporate taxation system that allows founders and investors to choose the most efficient structure depending on business size, profitability, and cost profile:
Micro-company tax — 1% turnover tax for eligible small companies.
Corporate Income Tax (CIT) — 16 % on net profit.
Micro-company Tax (1 %)
The Micro-company regime remains Romania’s most accessible and predictable corporate tax option in 2026, particularly for early-stage companies and service-based businesses.
Eligibility conditions (2026):
annual turnover of up to 100,000 €;
at least one full-time employee (the company director may be employed with the minimum gross wage which is currently EUR 795 / month);
an active Romanian limited liability company (SRL);
full tax compliance (timely filings and payments).
Tax treatment:
1% tax on turnover, regardless of the turnover level within the eligibility threshold.
Once the 100,000 € threshold is exceeded or the eligibility conditions are no longer met, the company automatically transitions to the 16% corporate income tax regime starting with the relevant fiscal period.
Example Calculation for Micro-company
Item | Amount € | Explanation |
Turnover | 100,000 | Total annual revenue |
Micro-company tax (1%) | 1,000 | 1% |
Salary taxes | 3,672 | Taxes associated with the minimum wage. |
Salary (net) | 6,068 | Amount to be disbursed into the Director’s bank account, as salary. |
Net profit before dividend tax | 89,260 | 100,000 − (1,000 + 6,068 + 3,672) |
Dividend tax (16%) | 14,281 | 16% × 89,260 |
Net profit after dividend tax | 74,979 | Remaining company profit |
TOTAL NET EARNINGS (Salary + Net profit) | 81,047 | 74,979 + 6,068 |
Corporate Income Tax (CIT – 16 %)
Companies that exceed the Micro-company eligibility threshold or opt for the standard regime are subject to 16% corporate income tax on taxable profit (revenues minus deductible expenses).
Deductible expenses include, among others: salaries and related social contributions, rent, professional and consulting services, depreciation, R&D expenses, marketing costs, and interest expenses within EU thin-capitalization rules. Fiscal losses may be carried forward for seven years, and dividends received from qualifying EU subsidiaries are exempt under Romania’s participation exemption regime.
This model suits larger, cost-intensive businesses — manufacturing, logistics, retail, or agencies reinvesting profit.
Tax regimes Comparison
Feature | Corporate Income Tax (CIT) | Micro-company Tax |
Tax base | Net profit (accounting profit ± fiscal adjustments) | Turnover (revenue), not profit |
Tax rate | 16% | 1% |
Eligible companies | Most companies, especially higher turnover | Small businesses under the annual turnover threshold |
Deductions / incentives | R&D super-deduction, reinvested profit exemptions, sector-specific reliefs | Limited — generally none beyond the standard flat rate |
Administrative burden | Medium — annual CIT return, fiscal adjustments, documentation for deductions | Low — simpler filing and accounting obligations |
Best for | Companies with profits that benefit from deductions, reinvested profit, or capital-heavy investments | Early-stage companies, service providers, or businesses with predictable revenue but low expenses |
Conclusion
Under the Micro-company regime (1% + one employee) with no operational expenses, the total effective fiscal load — including company tax, salary contributions, and dividend tax — is ± 19% of turnover.
That means out of 100,000 € revenue, the entrepreneur personally keeps about 81,047 € (salary + dividends).
This makes Romania’s micro-company system one of the most efficient in the EU, especially for solo founders and digital entrepreneurs operating through their own SRL.
LegalHunt glance: the dashboard tracks your turnover, warns before exceeding thresholds, and switches filings automatically from 1% to 16%.
Optimize Your Tax Strategy
Whether you’re launching an SRL or scaling beyond the micro-company threshold, the right tax structure can mean keeping over 80% of your revenue. LegalHunt tracks your turnover, alerts you before thresholds, and switches filings from 1% to 16% automatically so you stay compliant and maximize profit.
Value-Added Tax (VAT) & Digital Compliance (e-Factura / SAF-T)
VAT Basics
Romania’s standard VAT rate is 21%, with reduced rates of 11% (food,medicines,hotel services,books,energy).
VAT applies to all domestic supplies of goods or services, intra-EU transactions, and certain imports.
Registration & Thresholds
VAT registration becomes mandatory once your Romanian turnover exceeds 395 000 RON (≈ 77 000 €).
Below this threshold, VAT registration is optional, allowing early-stage companies and freelancers to operate without charging VAT, provided they do not voluntarily opt into the VAT system.
Place-of-Supply Rules
Goods → taxed where goods are delivered.
Services B2B → taxed at customer location (reverse-charge in EU).
Services B2C → taxed in supplier’s country (Romania).
For cross-border EU services, the reverse-charge mechanism shifts VAT to the customer, simplifying compliance for exporters and consultants billing EU clients.
e-Factura System
Since 2024, all B2B invoices between Romanian companies must be issued through RO e-Factura, the national electronic invoicing portal operated by the Ministry of Finance.
Invoices to foreign clients or private individuals are not required to go through e-Factura.
Client Type | e-Factura Required? |
Romanian B2B | ✅ Yes |
Public Institutions (B2G) | ✅ Yes |
Foreign Clients (EU / non-EU) | ❌ No |
Private Individuals (B2C) | ❌ No |
SAF-T Reporting
All Romanian taxpayers must periodically submit the Standard Audit File for Tax (SAF-T) — an XML-based dataset containing accounting and transaction records.
Reporting frequency depends on the taxpayer’s size:
Large taxpayers → monthly
Medium taxpayers → quarterly
Small taxpayers → annually
Failure to submit on time triggers fines up to 10 000 RON (≈ 2 000 €).
LegalHunt Platform glance: the built-in invoicing tool issues compliant e-Factura invoices, exports SAF-T XMLs, and syncs them with your accountant automatically. You see all VAT obligations and payments in one dashboard.
Self-Employed & Freelancer Taxation (PFA, II, IF)
Romania offers several forms of self-employment, the most common being:
PFA (Authorized Individual)
II (Individual Enterprise)
IF (Family Enterprise)
The Romanian tax framework for independent activities — whether organized as PFA, II or IF — offers a high degree of flexibility, but also brings specific compliance obligations.
Understanding the available taxation systems, thresholds, and reporting requirements is essential for optimizing costs and avoiding penalties.
Taxation for Self-Employed Individuals (PFA) in Romania Updated for 2026
Taxation for Persoane Fizice Autorizate (PFA) in Romania is designed to be flexible and accessible, offering individuals the ability to carry out independent economic activities with simplified administrative and accounting obligations.
Romania offers two taxation systems for self-employed individuals (PFA) :
Real-income taxation (based on actual profit).
Norm-income taxation (based on fixed income per CAEN code).
While both systems are easy to operate, the real-income system provides greater flexibility for growing activities, as it allows the deduction of professional expenses and has no revenue ceiling.
1. Real-income taxation
PFA (Venit Real)
Contributions in 2026
Type | Rate | How it’s calculated | Minimum / Maximum Rules |
CASS (Health Insurance) | 10% | Applied to annual net income (revenues – expenses) | – If income < 24,300 RON → minimum contribution 2,430 RON. |
CAS (Pension) | 25% | Based on income brackets tied to gross minimum wage (4.050 RON in 2026) | – Under 48,600 RON → no CAS. |
Income Tax | 10% | 10% × (net income – CAS – CASS) | Exempt: disabled persons gr. 1–2. |
Important: Both CAS and CASS thresholds are updated annually, as they are directly linked to the gross minimum wage.
Example 1 — Small Freelancer (~ 120,000 RON ≈ 24,000 €)
Net income: 120,000 RON
CASS = 10% × 120,000 = 12,000 RON
CAS = 24,300 RON (highest bracket)
Tax base = 120,000 – 12,000 – 24,300 = 83,700 RON
Income tax = 10% × 83,700 = 8,370 RON
Total taxes = 44,670 RON (~ 8,700 €)
Effective rate ≈ 37% of net income
Example 2 — High-Earning PFA (~ 1,000,000 RON ≈ 200,000 €)
Net income: 1,000,000 RON
CASS = 29,160 RON (capped)
CAS = 24,300 RON (capped)
Tax base = 1,000,000 – 29,160 – 24,300 = 946,540 RON
Income tax = 10% × 946,540 = 94,654 RON
Total taxes = 148,114 RON (~ 29,100 €)
Effective rate ≈ 14.5%
2. Norm-Income taxation
PFA’s at norm-income pay taxes based on a fixed annual income set by ANAF for each CAEN code(e.g. consultancy, IT, transport).
This model is available only if:
the activity’s CAEN code is listed in the official ANAF norm table; and
total revenues in the previous year were below 25 000 €.
Contributions in 2026
Type | Rate | Notes |
CASS | 10% × norm income | Capped at 29,160 RON |
CAS | 25% × 12/24-salary bracket | 12 150 RON or 24 300 RON depending on norm value |
Income Tax | 10% × norm income | No expense deductions |
No accounting obligations, but the taxpayer cannot deduct actual expenses (subscriptions, rent, laptop, etc.).
Summary Table (Real vs Norm System)
Real Income | Norm Income | |
Tax base | Actual profit | Fixed by ANAF |
Deductible expenses | | |
Accounting required | Double entry | Simplified |
Income ceiling | None | 25 000 € / year |
Best for | Professionals with variable costs | Small, stable activities |
No
Practical insight
For most freelancers earning above 25 000 € / year, switching to a micro-SRL (1% turnover tax) is significantly more efficient than remaining a PFA:
liability is limited;
social contributions are much lower proportionally;
and dividends can be distributed flexibly.
LegalHunt Platform glance
LegalHunt’s calculator module compares PFA (real & norm) with micro-SRL side by side.
It automatically applies 2026 CAS/CASS thresholds and highlights your effective tax burden at any income level — including when incorporation becomes more profitable.
Hence many freelancers migrate to the micro-SRL model, where total taxes fall to around 19 %.
Other Rules
PFA’s can hire employees but must maintain double-entry accounting above 100 000 € turnover.
Social insurance thresholds update annually.
PFA’s are not legal persons; liability is unlimited.
LegalHunt insight: the platform compares PFA vs SRL scenarios automatically, showing your net income after taxes so you can decide when to incorporate for better efficiency.
Withholding Taxes & Cross-Border Payments
Dividends to non-residents: 16 % WHT (0 % under EU Parent-Subsidiary Directive).
Interest & Royalties: 10 % WHT, reducible via treaties.
Service fees: subject to WHT only if paid to non-treaty jurisdictions or for Romanian-sourced work.
To apply treaty benefits, you must file the residence certificate and beneficial ownership statement with ANAF.
Payroll Taxes and Employer Costs
Employees and directors pay a flat 10 % income tax, plus:
25 % CAS (pension),
10 % CASS (health),
2.25 % employer labour insurance.
The total labour cost ≈ 43 % of the gross salary (so a 1 000 € net requires ~ 1 430 € total employer spend).
LegalHunt glance: payroll and salary taxes are automatically calculated in your dashboard; you approve monthly reports and the accountant submits them digitally to ANAF.
Profit Repatriation & Exit Taxation
Dividends may be distributed quarterly or annually after filing.
Outgoing transfers are free of exchange controls and subject only to bank KYC.
EU shareholders benefit from 0 % WHT under the Parent-Subsidiary Directive.
Capital gains on share sales are taxed at 10 %, but participation exemption applies for qualifying holdings.
Compliance & Deadlines
Filing Type | Frequency | Deadline |
CIT return (Form 101) |
Annual (CIT payers only) |
25 March of the following year |
Micro tax return (Form 100) | Quarterly | 25 of the month following the quarter |
VAT returns (Form 300) | Monthly / Quarterly | 25 of the following month |
SAF-T reporting | Monthly / Quarterly / Annual | per size category |
Dividend WHT | At payment | same month |
Penalties: late filing or payment may result in fines generally ranging from 1,000 to 10,000 RON (200 – 2 000 €) + late-interest, depending on the type of tax and taxpayer category.
LegalHunt Platform glance: automatic alerts and real-time status tracking for CIT, VAT, and SAF-T filings ensure zero missed deadlines.
Summary of Key Rates (2026)
Tax Type | Rate | Notes |
Corporate Income Tax | 16 % | on net profit |
Micro Tax | 1 % | ≤ 100,000 € |
Dividend Tax | 16 % | 0 % in EU cases |
VAT | 21 % / 11 % | e-Factura mandatory for B2B |
Personal Income Tax | 10 % | flat rate |
PFA Social Contributions | 35 % (avg) | CAS + CASS |
Employer Costs | ≈ 43 % on gross | payroll charges |
Why Work with LegalHunt
Entering a new jurisdiction means more than company registration it means navigating local tax rules, digital reporting systems, compliance deadlines, and regulatory changes that directly impact profitability. Our mission is to eliminate this friction and provide foreign investors with a seamless, compliant, and efficient entry into the Romanian market.
In Romania’s 2026 compliance environment, with mandatory e-Factura, SAF-T reporting, and increasingly automated tax controls, having the right local partner is no longer optional it is essential.
Whether you are:
incorporating an SRL,
registering a Romanian branch,
relocating operations,
or optimizing an existing structure,
we combine local legal and tax expertise with a fully digital compliance platform to ensure accuracy and transparency
Your success in Romania starts with a trusted partner who knows the system inside out — and that’s exactly what we offer.
The LegalHunt Platform centralizes every compliance step:
company formation and qualified digital signature setup;
automated invoicing with RO e-Factura integration;
real-time tax simulations (micro vs. CIT, PFA vs. SRL);
VAT monitoring and SAF-T XML generation;
direct collaboration with accountants and banks;
secure document archiving and automated deadline alerts.
Book a Structuring Call with LegalHunt to design your optimal Romanian tax and corporate setup from incorporation to profit repatriation fully digital, fully compliant, and aligned with 2026 legislation.
Smarter Tax for Smarter Founders
From 1% micro-company tax to 16% corporate tax, LegalHunt helps you stay in the most efficient structure. Track turnover, avoid surprises, and protect your profits as you grow.
