NNDKP Tax Flash No.1/2025 – Budgetary Measures to Strengthen Romania’s Long-Term Financial Sustainability
Draft law PL-x nr. 230/2025 on some fiscal-budgetary measures was published on the website of the Chamber of Deputies.
The law is currently in draft form and has not yet been enacted. While last-minute changes cannot be entirely ruled out, we will provide updates on any further developments or changes once the law is enacted, as applicable.
The draft law provides some fiscal-budgetary measures to strengthen Romania’s long-term financial sustainability.
Dividend tax
- The dividend tax rate will be increased to 16% for dividends distributed starting 1 January 2026 (or from the first day of the modified fiscal year commencing in 2026), applicable to all categories of beneficiaries, whether legal entities or individuals, resident or non-resident.
Additional tax for credit institutions
- The additional tax applicable to credit institutions – Romanian legal entities and Romanian branches of foreign credit institutions – will be increased from 2% to 4%, effective from 1 July 2025 until 31 December 2026, and will be applied to turnover.
Income tax
- Income obtained by individuals from the disposal of waste originating from personal assets will no longer qualify as non-taxable income and will instead fall under the category of “income from other sources”, for which economic operators are required to calculate, withhold, and pay income tax at source.
- Regarding the taxation of gambling income, the minimum tax rate will be increased from 3% to 4% for income up to RON 10,000 (inclusive), and the fixed amounts used in the calculation of the progressive tax for higher income brackets will be updated, while maintaining the rates of 20% and 40%.
- For interest income earned by Romanian resident individuals from holding bonds issued by Romanian companies on capital markets outside Romania, the obligations to calculate, withhold at source, and report the tax will be removed from the payers of income. Consequently, the obligation to calculate, declare, and pay the tax will rest with the beneficiaries of such bonds.
Health insurance contribution
- A health insurance contribution payment obligation will be introduced for individuals receiving pension income exceeding the threshold of RON 3,000.
- Exemptions from the payment of the health insurance contribution (CASS) will be removed for certain categories of people, such as individuals dependent on an insured person (spouse, parents without own income), individuals receiving unemployment benefits etc.
- For people who opt to pay the social insurance contribution, a requirement to pay 25% of the related contribution on the date of submitting the option declaration is introduced.
Excise duties
- The level of excise duties will be increased for products such as alcoholic beverages and alcohol-based products, processed tobacco, as well as for energy products (e.g., gasoline, diesel).
Value added tax
Starting 1 August 2025:
- The standard VAT rate will increase from 19% to 21%;
- A single reduced VAT rate of 11% will be provided, respectively:
- The reduced VAT rate of 5% will be removed, and the operations that have been subject to the reduced VAT rate of 5% until now will be subject to the reduced rate of 11%;
- Some of the goods/services for which the reduced VAT rate of 9% applies until 1 August 2025 will be subject to the reduced VAT rate of 11%, while for others the standard VAT rate will be applied (e.g., delivery and installation of photovoltaic panels, services consisting in allowing access to sporting events).
- The possibility for private individuals to purchase housing as part of the social policy with the reduced VAT rate of 9% is removed. However, transitional measures are provided for contracts concluded until 1 August 2025, for advance payments for the purchase of such a dwelling, under certain conditions.
- The VAT exemption with deduction right provided for operations carried out to non-profit entities and their wholly-owned companies is removed. Transitional measures are provided for the application of the VAT exemption, by refund, for operations for which the chargeable event occurred up to 1 August 2025, under certain conditions.
The Romanian version of this newsletter is available here.
