Prepared by Robert Trăilescu, Romanian business lawyer and Bucharest Bar member.
Last reviewed: July 2026
Companies operating in Romania are generally subject to one of two main corporate income taxation systems: the standard 16% profit tax or, if the relevant statutory conditions are met, the 1% micro-company income tax.
The applicable regime determines how the tax base is calculated, which company-level changes must be monitored and when a business may have to move from one system to the other.
Romanian tax legislation changes relatively frequently. Some amendments affect tax rates, while others modify eligibility conditions, calculation rules or reporting obligations. As a result, a tax position that was correctly established when a company started operating may need to be reviewed as the law, the ownership structure or the company’s activity develops.
This guide provides an overview of the main corporate income tax rules applicable in Romania. It does not cover VAT, payroll taxation, dividend taxation or other withholding/not withholding taxes.
The main corporate income tax regimes in Romania
The Romanian Tax Code provides two principal taxation regimes for companies:
- Corporate profit tax, charged at 16% of taxable profit.
- Micro-company income tax, charged at 1% of the taxable revenue base for qualifying Romanian companies.
Several conditions must be satisfied for the micro-company regime, and some of them must continue to be monitored throughout the company’s activity.
Certain sectors are also subject to additional turnover-based taxes. These rules currently apply, among others, to credit institutions and oil & gas companies.
The standard 16% corporate profit tax
The standard corporate income tax rate in Romania is 16% of taxable profit. It generally applies to Romanian legal entities that do not apply the micro-company regime, as well as to Romanian permanent establishments of foreign legal entities and other taxpayers covered by the Romanian Tax Code.
Generally, the fiscal result is determined by adjusting accounting income and expenses in accordance with the Tax Code. This may involve deducting non-taxable income, adding non-deductible expenses and applying specific rules concerning depreciation, provisions, interest expenses, tax losses and other items.
Who normally pays the 16% profit tax?
The standard regime is generally relevant for:
- Romanian companies that do not qualify for, or do not apply, the micro-company regime;
- companies that cease to meet one or more of the conditions required for the micro-company regime;
- Romanian branches or permanent establishments of foreign companies;
- companies that choose to apply the profit tax regime instead of the micro-company regime;
- Romanian non-government organizations (NGOs), such as associations and foundations.
The 1% micro-company income tax
The micro-company income tax is calculated at a rate of 1% of the taxable revenue base, rather than on the company’s profit.
This distinction has an important practical impact. A company may owe micro-company income tax even when its expenses are high or when it records little or no profit.
The tax base is established under the specific rules of the Tax Code. It is generally linked to revenue recognised under the applicable accounting rules, subject to the additions and exclusions required by law. Therefore, the tax is not postponed until the company’s customers pay their invoices.
A company with unpaid invoices may consequently have a tax liability even though it has not yet received the corresponding payments. This should be taken into account when planning the company’s operating capital and contractual payment terms.
Conditions for applying the micro-company regime
A Romanian company may apply the micro-company income tax only if it meets the statutory conditions.
As of the date of this review, the main conditions include the following.
The EUR 100,000 revenue threshold
The company’s relevant revenue must not exceed the RON equivalent of EUR 100,000.
The threshold is not always verified by looking only at the revenue of the company applying the regime. Where the company has linked enterprises, their relevant revenue must also be taken into account.
For this reason, a Romanian company that appears to be below the threshold when considered separately may still be unable to apply the micro-company regime once the income of its linked enterprises is included.
Linked enterprises
The linked-enterprise rules may apply where persons or companies have direct or indirect holdings, voting rights or other forms of control exceeding the statutory threshold.
In certain circumstances, the calculation may also have to take into account income generated through an authorised individual activity, individual enterprise or similar form of business connected to the Romanian company through a shareholder holding more than 25%.
The analysis should not be limited to the immediate shareholder shown in the Romanian company’s corporate documents. Direct and indirect ownership, common control and parallel business activities may also be relevant.
The employee requirement
The company must generally have at least one employee.
This condition may be met through:
- one full-time employment agreement;
- several part-time employment agreements that together represent the equivalent of one full-time position; or
- a management agreement concluded with the company’s director for which the remuneration is at least equal to the national minimum gross salary. As of 1 July 2026, the national minimum gross salary is RON 4,325 per month.
A newly incorporated company that wishes to apply the micro-company regime must generally satisfy the employee condition within 90 days of its registration. If it does not do so, it becomes subject to corporate profit tax according to the timing rules provided by the Tax Code.
Specific rules apply when the company’s only employment agreement is terminated or suspended. For example, the condition may remain satisfied if a replacement employee is hired within the statutory period. These situations should be assessed before the company’s tax status is changed.
The shareholder limitation
Where a shareholder holds, directly or indirectly, more than 25% of the participation titles or voting rights in several Romanian companies, the micro-company regime may generally be retained for only one of those companies.
The shareholders must identify which company will continue to apply the micro-company regime. The other relevant companies must move to the corporate profit tax system in accordance with the applicable transition rules.
This rule is particularly important for founders and investors who operate several Romanian companies or use separate entities for different business activities.
Annual financial statements
A company must submit its annual financial statements within the applicable legal deadline.
Failure to meet this condition can result in the company becoming subject to corporate profit tax. The filing status should therefore be verified as part of the annual review of the company’s eligibility for the micro-company regime.
Excluded activities
Certain regulated or specifically listed activities cannot benefit from the micro-company regime. These include, subject to the detailed statutory provisions, activities in areas such as banking, insurance, capital markets, gambling and the exploration or exploitation of oil and natural gas deposits.
A company’s registered activity codes are not always sufficient to determine its eligibility. Its actually performed activities must also be considered.
How the EUR 100,000 threshold is calculated
The EUR 100,000 threshold is verified using the RON equivalent calculated at the exchange rate applicable at the end of the relevant financial year.
For the ongoing monitoring of the threshold, the calculation is based primarily on revenue included in turnover under the applicable accounting regulations. Certain income from transfers of fixed assets or land may also be included in the circumstances established by law.
Where linked enterprises exist, the relevant revenue of those enterprises must be combined.
Practical example
Assume that a Romanian company records relevant annual revenue equivalent to EUR 70,000. Considered separately, it remains below the EUR 100,000 threshold.
However, one of its shareholders also controls a linked Romanian company with relevant revenue equivalent to EUR 45,000. If the linked-enterprise rules require the revenue to be combined, the total amount becomes EUR 115,000.
In that situation, the first company cannot rely solely on its individual revenue of EUR 70,000 to retain the micro-company regime.
This is why ownership and control should be reviewed alongside the company’s accounting figures.
What happens when the EUR 100,000 threshold is exceeded?
If a micro-company exceeds the EUR 100,000 threshold during the fiscal year, it becomes subject to the 16% corporate profit tax starting with the quarter in which the threshold was exceeded.
The transition is not postponed until the following year.
The company must therefore monitor its revenue during the year rather than wait until the annual financial statements are prepared. This is especially important where:
- the company is close to the threshold;
- revenue increases rapidly;
- a significant transaction is expected;
- assets or land are being transferred, exceeding the legal thresholds;
- the company is part of a group of linked enterprises.
A late assessment can lead to incorrect tax declarations, payment differences and additional fiscal obligations.
What happens if another condition is no longer met?
A company may also leave the micro-company regime if it no longer satisfies the employee condition, fails to submit its financial statements on time, enters an excluded field of activity or becomes affected by the shareholder limitation.
However, the effective date of the transition to profit tax depends on the condition that is no longer satisfied.
For example, exceeding the revenue threshold normally produces the transition from the quarter in which the threshold is exceeded. By contrast, failure to maintain the employee condition may produce the transition from the following quarter, subject to the replacement and suspension rules provided by law.
The company should therefore identify both the event that triggered the change and the precise quarter from which the new regime applies.
Can a company return to the micro-company regime?
Starting with the 2026 fiscal year, a Romanian company may opt to return to the micro-company regime in a subsequent fiscal year if it meets the applicable legal conditions.
The return is not automatic. The company must verify that it meets the conditions and must exercise the option in accordance with the applicable procedure and deadlines.
Additional turnover tax for credit institutions
Romanian credit institutions and Romanian branches of foreign credit institutions are required to pay a specific turnover tax in addition to corporate profit tax.
For the period from 1 January to 31 December 2026, the applicable rate is generally 4%.
A reduced rate of 2% applies to qualifying credit institutions whose market share is below 0.2% of the total net assets of the Romanian banking sector, calculated according to the statutory rules.
This is an additional sector-specific tax. It does not replace the standard corporate profit tax owed by the credit institution.
Additional turnover tax for oil and gas companies
Companies carrying out activities in the oil and gas sectors specified by the relevant legislation may also owe a specific turnover tax in addition to corporate profit tax.
For the 2026 fiscal year, the rate used in the statutory calculation formula is 0.5%. The tax is calculated according to a specific formula that takes into account the categories of income and deductions identified by the Tax Code. It should not be treated as a simple 0.5% charge on every amount recorded by the company.
The rules apply only to the taxpayers and activities covered by the relevant legal provisions. The company’s actual operations and activity classification must therefore be reviewed before the tax is calculated.
Why the applicable tax regime should be reviewed periodically
Corporate income tax in Romania should not be assessed only when the company is incorporated.
A periodic review becomes particularly important when:
- the company approaches the EUR 100,000 turnover threshold;
- its shareholders establish or acquire interests in other Romanian companies;
- a founder also conducts business through a PFA or individual enterprise;
- an employment or management agreement is terminated or suspended;
- the company changes or expands its activities;
- assets, land or a significant part of the business are transferred;
- the Romanian tax legislation is amended.
Frequent legislative changes do not necessarily mean that the company must restructure its activity each time the Tax Code is amended. However, each material change should be checked to determine whether it affects the applicable tax regime, the calculation method or the company’s reporting obligations.
The review should also cover changes within the company itself. A business may become subject to a different tax regime even when the wording of the law has not changed, simply because its revenue, group structure, workforce or activities have evolved.
How Robert Trăilescu can assist you
Robert Trăilescu – RT Legal can assist Romanian and foreign-owned companies in assessing the corporate income tax regime applicable to their Romanian operations.
Our assistance may include:
- reviewing whether the company meets the legal conditions for the micro-company regime;
- analysing ownership structures and linked-enterprise relationships;
- assessing the legal consequences of changes in revenue, shareholders, employees or business activities;
- identifying when a transition to the corporate profit tax regime becomes necessary;
- reviewing the legal framework applicable to foreign companies operating through Romanian entities or branches;
- coordinating the legal aspects of implementation with the company’s accountants or tax advisers;
- monitoring relevant legislative changes and explaining how they may affect the company’s existing structure.
The purpose of this review is not limited to identifying the applicable tax percentage. It is to help the company understand which rules apply, which events must be monitored and what steps may be required when its legal or commercial circumstances change.
Frequently asked questions
What is the corporate income tax rate in Romania?
The standard corporate profit tax rate is 16% of taxable profit. Romanian micro-companies may instead apply a 1% tax to the taxable revenue base, if they fulfil certain legal conditions.
Is the micro-company tax calculated on profit?
No. It is a revenue-based tax. Expenses do not reduce the tax base in the same manner as under the corporate profit tax regime.
Can a foreign-owned Romanian company apply the micro-company regime?
Foreign ownership does not exclude a Romanian company from the regime. However, the company must meet all applicable conditions, including the revenue threshold, employee requirement, shareholder limitation and linked-enterprise rules.
Is the 1% tax due only after the company collects its invoices?
Not necessarily. The tax base is generally determined by reference to revenue recognised under the applicable accounting and fiscal rules. Therefore, the company may owe tax before a customer has paid the corresponding invoice.
What happens when a micro-company exceeds EUR 100,000 in revenue?
It becomes subject to corporate profit tax starting with the quarter in which the threshold is exceeded. The linked-enterprise rules must also be considered when the threshold is calculated.
Can a company return to the micro-company regime after paying profit tax?
Yes. Starting from 2026, a company may opt to return in a subsequent fiscal year if it meets the applicable conditions and follows the required procedure.
Why should the company’s tax status be checked every year?
Both Romanian tax legislation and the company’s own circumstances may change. Revenue growth, new shareholders, linked businesses, staff changes or new activities can affect the applicable regime even if the company initially qualified as a micro-company.
Need assistance with company registration or corporate income taxation in Romania?
This material is provided for general information only and reflects the legislation reviewed as of the date indicated above. It does not constitute legal, tax or accounting advice and should not be relied upon as a substitute for an assessment of the company’s particular circumstances.
Romanian tax legislation may be amended after the date of publication. Professional advice should be obtained before making or implementing a decision based on the rules described in this guide.