New Amendments to the Romanian Fiscal Code

√     Revised legal framework for taxing the income of micro-enterprises
√     Tax incentives in HoReCa and construction sector diminished or even repealed
√     Increased gambling tax rates
√     Important changes regarding VAT, self-employment income tax, and mandatory social securities

On Friday 15 July 2022, Ordinance no. 16/2022 amending and supplementing Law no. 227/2015 on the Fiscal Code, repealing normative acts and other fiscal measures was published and substantially modified the current legal framework on several matters. The provisions will enter into force on 1 January 2023, respectively on 1 August 2022.

Most relevant amendments include:

  • Regarding the dividend tax, the tax rate will be increased from 5% to 8%, starting with 1 January 2023.
  • Regarding the excise duties on tobacco and alcohol, they will be increased, starting with 1 August 2022.
  • Regarding the VAT, the following changes are to be applied (starting with 1 January 2023):
    • The reduced VAT rate (5%) for delivery of houses will be applied only once per person and exclusively for houses that do not exceed 120 sqm, and the value of RON 600,000.
    • The following VAT rates will be increased:
Matter Before After
Restaurant and catering services 5% 9%
Sugary drinks 9% 19%
Non-alcoholic beer
  • Regarding the gambling tax, the thresholds and tax rates that come into force on 1 August 2022 will be amended as follows:
Before After
Below RON 66,750 1% Below RON 3,000 10%
Between RON 66,750-445,000 667.5 + 16% for what exceeds RON 66.750 Between RON 3,000-10,000 300 + 20% for what exceeds RON 3,000
Above RON 445,000 61,187.5 + 25% for what exceeds RON 445.000 Above RON 10,000 1,700 + 40% for what exceeds RON 10,000
  • The thresholds and tax rates indicated above are also applicable to gambling revenues related to casinos, poker clubs, slot-machines with a value higher than the non-taxable threshold of RON 600.
  • Regarding tax incentives, the following changes are to be applied:
    • As of 1 January 2023, the specific HoReCa tax will be repealed. Instead, undertakings in HoReCa may opt for the micro-enterprise income tax regardless of the annual turnovers.
    • As of 1 January 2023, the tax exemption for natural persons carrying out seasonal activities will be repealed.
    • The tax exemption on the salary of construction employees will be applied only if the activity is performed in Romania and the threshold to benefit from the tax exemption decreases from RON 30,000/month to RON 10,000/month. This amendment entered into force on 18 July 2022.
    • As of 1 January 2023, the system of personal deductions will be reformed. Additional deductions will be appliable to persons with children under the age of 18, as well as to young people under the age of 26.
    • As of 1 January 2023, tax exemptions for (re)invested profit in technological equipment, assets used in production, assets representing refurbishment, computer programs and others will be introduced. An Order of the Minister of Finance will specifically establish the list of assets that fall within the scope of this exemption.
  • Regarding incomes from salaries (or assimilated to salaries) from part-time employment contracts below the level of minimum wage, they will be taxed at the value of the minimum wage. Pupils, students (up to 26 years old), apprentices or people with disabilities are to be exempted. This amendment will enter into force on 1 August 2022.
  • Regarding the rental income tax, the 40% deduction will no longer be applied starting with 1 January 2023.
  • Regarding the tax on the micro-enterprise’s revenue, the following changes will enter into force starting with 1 January 2023:
    • To fall within the scope of this type of tax, legal entities must have at least one employee (as a result, the 3% income tax on micro-enterprises without employees is repealed; legal entities without any employees will apply the profit tax).
    • The revenue threshold up to which a legal entity is considered a micro-enterprise will be reduced from EUR 1,000,000/year to EUR 500,000/year.
    • Legal entities that receive more than 20% of their revenue from consulting and/or management activities will not be able to apply this type of tax.
    • Legal entities that have as associates or shareholders persons who hold over 25% of the value or number of participation titles (or voting rights) to more than three Romanian legal entities that apply the micro-enterprise income tax will not be able to apply this type of tax.
    • Romanian legal entities carrying out activities in the field of banking, insurance and reinsurance, capital market, gambling, and exploration, development, exploitation of oil and gas will not be able to apply the micro-enterprise income tax.
  • Regarding revenue from independent activities, starting with 1 January 2023, the threshold up to which taxpayers determine the annual net income based on the income norm decreases from EUR 100,000 to EUR 25,000. Exceeding the threshold obliges taxpayers to determine the annual net income on a single-entry bookkeeping.
  • Regarding the tax on the transfer of ownership of real estate, the new tax rates applicable starting with 1 January 2023 are the following (the tax rates apply directly to the value of the transfer, without the current deduction of RON 450,000):
Context Tax rate
Transfer of real estate owned for more than 3 years (>3 years) 1%
Transfer of real estate owned for less than 3 years (<3 years) 3%
  • Regarding mandatory social securities-pensions (CAS), starting with 1 January 2023, the taxable income is amended for persons earning income from self-employment or copyright:
Context Taxable income
Aggregated income (in one year) below 12 minimum wages Optional – 12 minimum wages
Aggregated income (in one year) of over 12 minimum wages and below 24 minimum wages 12 minimum wages
Aggregated income (in one year) of over 24 minimum wages 24 minimum wages
  • Regarding mandatory social securities-health (CASS), starting with 1 January 2023, the taxable income is amended for persons earning income from self-employment, copyright, associations with legal entities, rent, agricultural lease, investment, or agriculture:
Context Taxable income
Aggregated income (in one year) below 6 minimum wages Not applicable
Aggregated income (in one year) of over 6 minimum wages and below 12 minimum wages 6 minimum wages
Aggregated income (in one year) of over 12 minimum wages and below 24 minimum wages 12 minimum wages
Aggregated income (in one year) of over 24 minimum wages 24 minimum wages

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