Romania: Corporate, individual tax changes | KPMG | GLOBAL

Romania: Corporate, individual tax changes effective beginning 2018

Romania: Corporate, individual tax changes

An ordinance (published 10 November 2017) amends the Romanian tax law. The provisions generally follow earlier proposed measures and will be effective 1 January 2018.

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The new law includes revisions to the corporate income tax, including changes that limit the deductibility of interest and debt-related costs. Another measure effectively imposes an “exit tax” when there is a transfer of assets, tax residency, or the economic activity of a permanent establishment if such transfer causes Romania to lose the right to tax. The tax base is determined as the difference between market value and tax value of the assets transferred, and the rate of tax is 16%.

Other changes concern the tax on “micro-enterprises.”

Among the tax law changes affecting individual taxpayers is an income tax rate reduction to 10% but increased social security contributions for employees (effectively because the social security contributions are transferred from employers to employees).

 

Read a November 2017 report (English and Romanian) prepared by the KPMG member firm in Romania

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