Fiscal volatility – tax increases and greater stringency on companies’ “corporate hygiene”

Under budgetary pressure, Romania has been going through a period of rapid change over the past few months: “Package 1” of fiscal measures is already producing effects, while “Package 2,” still under public debate, announces structural changes: the elimination of the Minimum Turnover Tax (IMCA), counterbalanced by a drastic reduction in certain expenses recorded with group companies, a significantly higher minimum share capital, the obligation to hold a bank account in Romania, and stricter rules regarding inactive taxpayers. In this context, taxpayers must react quickly through monitoring, implementation and adaptation of their IT systems, and also adopt a conservative long-term strategy in order to limit fiscal and operational risk and to manage budgetary and administrative pressure, say TPA Romania specialists, a leading Central and Eastern European firm specialised in accounting, taxation, financial audit and legal advisory.

“Package 2 of fiscal measures builds on decisions already in force: as of 1 August 2025, the standard VAT rate has increased to 21% (with 11% for the reduced rate), excise duties on fuel have risen, and from 1 January 2026 the dividend tax will reach 16% and excise duties will be increased again. What do these changes mean for taxpayers? In the short term, to avoid penalties, a rapid response is needed to monitor and implement the mandated changes, as well as to adapt IT systems to these new rules which, all too often, have the unpleasant habit of entering into force very soon after publication. From a financial perspective, with long-term effects, the approach should be rather conservative: the impact on budgets, cash flow and operational processes should already be analysed and estimated as if the measures were to enter into force on 1 January 2026, with targeted adjustments if the final form in the Official Gazette differs. Thus, although the resources required would be significant, taxpayers can reduce fiscal and operational risk and can anticipate and counteract the negative effects of fiscal and administrative burdens,” explains Daniela Zar, Tax Partner at TPA Romania.

What changes could apply from 1 January 2026, if “Package 2” – currently under public debate – is adopted

“Package 2” is a very extensive draft legislative act that covers numerous changes of a fiscal and tax procedural nature. It is currently under public consultation, which means that its final form may undergo (potentially significant) changes until adoption and publication in the Official Gazette. At this stage, among the most significant proposed changes are:

Eliminating IMCA, the minimum turnover tax of 1%, which is currently owed by companies whose turnover exceeds Euro 50 million.

Drastic limitation of the deductibility of intra-group expenses: The draft initially proposed that expenses representing intellectual property rights, interest, management and consultancy services recorded in relation with related parties would be deductible up to 3% of the total expenses of the same nature.

“Following discussions in recent days, however, the rule may be slightly relaxed, while remaining very restrictive. More specifically, the restriction could target expenses related to intellectual property rights and management/consultancy services in relation with non-resident related parties – therefore, it would no longer target interest and would no longer severely affect purchases from Romanian affiliates. The deduction cap could also be changed to 1% of total expenses recorded. Even if these changes to the limitations were adopted, this regime would still be highly debatable, for example from the point of view of double tax treaties, which stipulate that such services are taxable in the state of the service provider (and not in Romania, the beneficiary country) – to mention just one of the legal counter-arguments,” says Daniela Zar.

Increase in minimum share capital: The draft provides for a substantial increase in the minimum share capital from RON 200 to RON 8,000; existing SRLs (limited liability companies) would have a compliance window of up to two years to increase their capital, under penalty of dissolution. At this time, a possible amendment is also being discussed whereby the share capital level would vary according to the previous year’s turnover (RON 500 for newly established companies and for turnover below RON 395,000; RON 5,000 for turnover up to RON 7,000,000; and RON 90,000 for volumes higher than RON 7,000,000). It is worth noting that, although increasing share capital implies a financial effort for the shareholders, the capital remains fully available to the company for day-to-day operations.

Stricter rules on companies’ inactive status: The draft aims to fundamentally change the rules for companies with no activity, through proposals such as:

• New cases in which ANAF would declare the inactive status: no bank account exists in Romania, or the financial statements have not been filed within five months after the statutory deadline.
• Time limits: a maximum of one year for fiscal inactivity; a maximum of three years for temporary inactivity registered with the trade registry. If the company is not reactivated within these time limits, ANAF is obliged to request insolvency or liquidation.
• Reactivation is possible within the time limits by meeting all applicable conditions (e.g. opening a bank account in Romania, filing financial statements and outstanding tax returns etc.).

What has already changed as of 1 August 2025

The standard VAT rate has increased to 21%, and the reduced rate has been unified at 11%. The implementing norms published at the end of July detail the specific rules for certain types of transactions, for example: 11% for food (with certain exceptions), medicines, books, thermal energy during the cold season, and others; 21% for houses previously covered by social-policy measures that qualified for the reduced rate (with certain transitional measures). Excise duties have also increased for fuel (gasoline and diesel) and alcohol, among others. For the banking sector, the supplementary turnover tax owed by credit institutions has increased to 4% (from 2%) for the second semester in 2025, with an exception for institutions with a market share below 0.2%.

Changes already adopted that will apply from 1 January 2026

The dividend tax rate will increase from 10% to 16% for dividends distributed starting 1 January 2026. This change will primarily affect individuals and minority shareholders holding less than 10% of a company’s share capital. Companies that are shareholders in a Romanian company will continue to benefit from exemption from dividend tax, provided they hold at least 10% of the participation rights for at least one year.

“For non-resident shareholders located in countries with which Romania has concluded double tax treaties, it will become even more important to verify and apply the provisions of those treaties, as they often allow lower withholding tax rates,” says Daniela Zar.

In addition, from 1 January 2026, excise duties on gasoline, diesel and alcohol will increase again by approximately 10%.

VAT for small enterprises – changes expected for 1 September 2025

According to a draft ordinance under debate, which aims to transpose into the Fiscal Code the provisions of the EU VAT Directive regarding the special scheme for small enterprises, the VAT registration threshold is expected to increase from RON 300,000 to RON 395,000 as of 1 September 2025.

“At the same time, rules are being introduced that will require taxable persons to closely monitor the threshold, in the sense that the normal VAT regime will apply from the date the threshold is exceeded, starting with the transaction that causes the exceedance. VAT registration will have to be requested no later than the date the threshold is exceeded; by comparison, the rules (still) in force allow a 10-day period from the date the threshold is reached or exceeded, during which entities may apply for VAT registration,” the TPA Romania specialist explained.