Romania has introduced major fiscal reforms for 2025 and 2026, impacting dividend taxation, VAT rates, excise duties, payroll compliance, and interest income reporting. These updates are designed to boost government revenue while aligning with broader European tax strategies. Businesses operating in Romania must prepare for the upcoming adjustments and ensure they remain compliant across all areas.
Key 2025–2026 Tax Updates for Businesses
1. Higher Dividend Tax Rates
From 1 January 2026, dividend tax in Romania will rise from 10% to 16% for distributions between local legal entities and also for non-resident individuals. Dividends distributed in 2025 under interim financial statements may still benefit from the current 10% rate.
2. VAT Rate Changes in Romania
The standard VAT rate will increase from 19% to 21%. The reduced 5% VAT will be replaced by an 11% rate for applicable goods and services, including publications and cultural access. The 9% VAT category will also shift to 11% but cover a narrower range of essentials like food, medicine, and utilities. VAT on new housing remains at 9% for eligible properties until August 2026.
3. Tax on Bank Turnover
A new 4% turnover tax will apply to banks from 1 July 2025, with rules expected to clarify its application and recalculation.
4. Excise Duty Increases
Romania will increase excise duties from August 2025 on alcohol, tobacco, sugary drinks, diesel, and gasoline. New excises are being introduced for still wines and fermented drinks. Specific duties on cigarettes are scheduled until March 2026.
5. Medical Leave Indemnity Reform
Indemnities will vary based on sick leave duration: 55% for up to 7 days, 65% for 8–14 days, and 75% for longer periods. Cardiovascular-related leave will remain at 75% of the base income.
6. Scrap Metal Income Taxation
Income from selling personal scrap metal will now be treated as taxable income, with tax withheld by the buyer at source. This closes a gap where previously such income was non-taxable.
7. New Rules for Tax on Bond Interest
As of 1 August 2025, individuals earning interest from Romanian-issued bonds must report and pay a 10% final tax via their personal tax return. The issuing company will no longer withhold this tax.
Eurofast’s Take: Prepare for the 2025–2026 Fiscal Transition
The 2025–2026 Romanian tax reforms signal a shift toward tighter compliance and greater transparency. Eurofast can help your business assess the financial impact, amend contracts and payroll, and align your reporting systems with the new regulatory framework. Whether you’re a local company or a cross-border investor, proactive planning is essential.
For personalised assistance, please, contact us at [email protected]