Romania – Updated Rules Governing Deductibility of Social Contributions

Romania – Updated Rules Governing Deductibility o...

Romania’s Fiscal Code has been updated such that monthly mandatory social security contributions due in other states and paid by taxpayers subject to Romanian taxation, according to European Union regulations or bilateral conventions / agreements on the coordination of social security systems, are considered deductible for Romanian income tax purposes (previously this was not specifically set out). These changes could have significant effects on both the tax cost for the individual (where the individual’s contract is based on gross remuneration) and the company’s tax burden (in the case of individuals whose contracts stipulate net remuneration).

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