Romania Tax Compliance Map

Email: buh4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Romanian, English and Chinese.
skype: burlinna

GLA – Romania Corporate Income Tax

GLA-DE-01 GLA Tax Entity

Question from client:
Is Romania’s corporate income tax a federal income tax? A state income tax? Or is there a federal and state income tax?
What if the federal income tax and the state income tax are levied separately or levied together?
What is the standard tax rate? What is the special tax rate?

Answer from Evershine RD:
Corporate income tax is imposed on a federal level.
There are no local or state income taxes levied in Romania.
The Romanian tax administration mostly acts through its local tax offices, which are part of the individual administrative body of the federal states.
Romanian business profits are subject to two taxes, corporation tax and trade tax.
The corporate income tax rate is 15%. A 5.5% solidarity surcharge is levied for a taxable income of 61,717 euros or higher, this results in an effective rate of 15.825%.

GLA-DE-02 Registration

Question from client:
Which government unit is responsible for the collection of Romanian corporate income tax?
The registration of the country’s corporate income tax status, that is, the tax certificate number application procedure, paper certificate number application? Or an online account application? URL?
What is the advance certificate number for applying for this certificate number? Do I need to use the industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
The federal tax administration encompasses the Federal Ministry of Finance (BMF).
The Federal Federal Tax Office (BZSt) is the federal agency responsible for Romanian taxes.
Federal Tax office – www.bzst.de/EN
E-filing Portal – https://www.elster.de/eportal/start
The tax number for your company must be applied for electronically using a tax registration questionnaire.
You must be registered with ELSTER to submit the questionnaire on tax registration. Fill out the questionnaire on tax registration online at www.elster.de and send it electronically to you tax office.

GLA-DE-03 GLA Order (OD)

Question from client:
What is the order of Romania corporate income tax return (information flow determines tax base) and payment (fund flow)?
Pay first and then declare? Report first and then pays? At the same time as the declaration and payment?

Answer from Evershine RD:
Deposit first (DF). Pay advance (monthly or quarterly) installment and declare later.

GLA-DE-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Romania corporate income tax return (information flow determines the tax base)?
Filing cycle: monthly? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: website URL?

Answer from Evershine RD:
Corporate tax returns must generally be filed by 31 July following the end of the tax year.
All companies must submit their tax returns electronically.
For a link to the e-filing portal. https://www.elster.de/eportal/start

GLA-DE-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Romania corporate income tax payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize the deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
Bank counter payment OCT?
Or the above methods coexist?

Answer from Evershine RD:
Prepayments of the estimated tax amount must be paid during the relevant fiscal year on 10 March, 10 June, 10 September, and 10 December.
Payments must be made electronically to the tax authorities using normal methods such as Direct Debit, BACS, or CHAPS.

VAT – Romania VAT

VAT-DE-01 VAT Tax Entity

Question from client:
Is Romania VAT federal VAT? State VAT? Or is there a federal plus state VAT?
What if the federal VAT and state VAT are levied separately or levied together?
What is the standard VAT rate? What is the special VAT rate?

Answer from Evershine RD:
Value-added tax is levied at the federal level and is based on the EU VAT Directive.
Whilst Romania follows the EU rules on VAT compliance, it can set standard VAT rates on its own.
The standard VAT rate in Romania is 19% (Romania’s temporary cuts VAT due to Covid-19 is 7%, from 01 July 2020 to 31 December 2022).
A reduced rate of 7% applies to certain consumer goods and everyday services.
Some services (Bank and health services) are VAT exempted.

VAT-DE-02 Registration

Question from client:
Which government unit is responsible for the levying of VAT in Romania?
The registration of Romania’s VAT levy status, that is, the application procedure for VAT certificate number, paper certificate number application? Or online account application? URL?
What is the advance certificate number for applying for a VAT certificate number? Do I need to use an industrial and commercial certificate electronic card to apply?

Answer from Evershine RD:
The Federal Central Tax Office is responsible for VAT.
Taxpayers register for Romanian VAT by applying to the applicable local Tax Office responsible for them. No specific form is necessary and contact via email is permitted. The Tax Office then sends the applicant a questionnaire seeking the information relevant for VAT registration.
In Romania, there are 2 categories of VAT numbers:

1. Steuernummer, for reporting VAT filings and general correspondence.
2. USt-IdNr, for identification for companies undertaking EU cross border transactions (intra-community supplies).

After the applicant submits the completed registration questionnaire, a business is assigned a taxpayer number (“Steuernummer”), which is not in a nationwide standardized format.
Certain taxpayers must use the taxpayer number to then apply for a VAT identification number (USt-IdNr).
Taxable persons can apply for a VAT identification number from the Federal Central Tax Office using an online application. In this application, they must state their taxpayer number and the Tax Office with which they are registered.
Once the registration has been granted, VAT identification number (USt-IdNr) consists of 9 digits.

VAT-DE-03 WWT Order (OD)

Question from client:
What is the order of Romania’s VAT declaration (information flow determines the tax base) and payment (fund flow)?
Pay first and then declare? First declare and then pay? At the same time as the declaration and payment?

Answer from Evershine RD:
Same Period (SP) – Declare and pay at the same time.

VAT-DE-04 Mechanism of Filing (MOF)

Question from client:
What is the return method for Romania VAT declaration (information flow determines the tax base)?
Reporting cycle: every month? Every bimonthly? Every season? every half year? Per year?
Electronic filing? Manual filing? Electronic filing and manual filing coexist? If electronic filing is possible: Website URL?

Answer from Evershine RD:
Companies submit periodic VAT reports online to the tax authorities on a monthly or quarterly basis using Romania’s online tax system.
The filing deadline is the 10^th of the following month or the 10^th of the following month of the quarter.

The companies must file an annual summary VAT return in which it has to calculate the tax again, the deadline is 31 July every year.
Filed by electronic means via “Elster” online to Romanian VAT authorities. Free filing software is available on the website of Romania’s Electronic Tax Office.

VAT-DE-05 Mechanism of Payment (MOP)

Question from client:
What is the funding method for Romania VAT payment (funds flow)?
Payment cycle: M per month? B every bimonthly? Q every season? H every six months? A every year?
Automatically authorize deduction of ACH (that is, take the initiative of the recipient)?
Electronic remittance to EFT (that is, the payer takes the initiative)?
OCT payment at the bank counter?
Or the above methods coexist?

Answer from Evershine RD:
Payment deadline is 10^th of the following month or 10^th of the following month of the quarter.
In case a payment needs to be made following the submission of the annual return (eg: Additional output VAT reported in the annual return), this payment must be made within 1 month following the annual return submission.

VAT payments are made to the IBAN number of the competent tax authorities.
Check the IBAN account stated in the confirmation of VAT registration issued by tax authorities.
The reference in the bank transfer must include the tax number (Steuernummer) and the period that is being paid.
In general, payable Romanian VAT must be transferred to the bank account of the competent tax authority. There is no requirement for the payment to be made from a Romanian bank account.

Please be aware of below Warning:
The above contents are digested by Evershine R&D  and Education Center in October 2021.
Regulations might be changed as time goes forward and different scenarios will adopt different options.
Before choosing options, please contact us or consult with your trusted professionals in this area.

Contact Us

Bucharest Evershine BPO Service Limited Corp.
Email: buh4ww@evershinecpa.com
The Engaging Manager from Headquarter
Ms. Anna Wang, Speak Romanian, English and Chinese.
skype: burlinna

or
For investment structure relevant to multi-national tax planning and Financial & Legal Due Diligence for M&A (Merge and Acquisition), send an email to HQ4buh@evershinecpa.com
Dale Chen, Principal Partner/CPA in Taiwan+China+UK will be accountable for your case.
LinkedIn address:Dale Chen

Additional Information

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(version: 2022/03)

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