Taxes in Romania from the beginning of 2023

Corporate Income Tax 1%
If the LLC has a full-time worker, corporate income tax is 1%. Otherwise, without employees, 16% profit tax
Dividend 8%
In the case of profit distribution, you are subject to 8% tax. 4 profit distributions possible per year
VAT – 19%
Food, medicines, and tourism is subject to only 9% VAT
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A Romanian limited liability company [S.R.L.] will only pay 1% corporate income tax if it hires at least one full-time employee. If there are no employees in the company, 16% profit tax is charged to the company as corporate income tax.
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If you meet the conditions of the 1% tax, you will pay the 1% corporate income tax according to the total turnover.
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The 1% S.R.L. is referred to as a micro-enterprise, whereby a Romanian company in this category can remain below EUR 500,000 annual turnover.
In Romania, the VAT threshold is EUR 65,000,-. Up to this amount, a Romanian S.R.L. can remain exempt from VAT. In addition, VAT registration is automatic. It is important to know that even VAT-exempt companies can have a VAT number, which appears in the VIES. With this tax number, Romanian companies can invoice foreign countries for services. When purchasing goods, the VAT identification number is suitable for service providers up to a maximum of EUR 10,000,-.
If the investor expects low costs, then inclusion in the 1% tax bracket is worth considering under the condition of employing a person. The minimum wage in Romania is EUR 600, of which the contributions amount to EUR 220. According to our calculations, it is financially worthwhile to employ

an employee from EUR 40,000 per year, as the wage costs incurred after an employee require monthly expenses of EUR 220, i.e. you have an annual contribution expense of EUR 2,640 for an employee,-.
Profit tax 16%
However, if the investor establishes the company for commercial purposes, it is not necessary to employ anyone, because in this case the 16% corporate income tax is levied on the net profit. This means that you settle your costs and then pay 16% of your net profit to the treasury in the form of corporate income tax.
The amount of the dividend will increase to 8% from 2023 and the managing director can officially claim dividends four times a year. A dividend at the end of the year in May, with shareholders entitled to receive quarterly interim dividends. Main page:
VAT remains unchanged at 19%. A company can be operated VAT-free up to a turnover of 65000 EUR per year. In addition, the tax authority then classifies it as a VAT payer as part of an automatic VAT registration. However, this does not have a detrimental effect on those who invoice foreign partners, since with a VAT number, the Romanian company can invoice other European companies free of VAT if they also have a valid VAT number.
Micro-enterprises are companies that fall under the 1% corporate income tax rate. The favourable taxation of this type of company applies to up to half a million euros in turnover per year. In addition, the corporate income tax rate of 16% automatically applies. Or the customer starts a new company, which allows him to operate as a micro-enterprise again up to 500,000 EUR…