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COUNTRY TRADING PROFILES
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Taxes - Accounting
Tax Rates |
Accounting Rules
Tax Rates
Consumption taxes
- Nature of the tax
-
Value Added Tax (VAT)
- Tax rate
- 24%
- Reduced tax rate
- 9% on medicines, books, newspapers, hotel rooms, cinema tickets, admission to museums, zoos, fairs and exhibitions; 5% for the supply of buildings.
- Other consumption taxes
- An excise tax is levied on luxury goods. For more information on VAT rates according to the type of product, see the comparative table of VAT rates throughout the EU (January 2009, in PDF). For more information on excise duties, see the comparative table of excise duty in the EU on Alcohols and spirits; Energy producing and electrical products; Tobacco.
Corporate taxes
Tax rate
| Tax on Companies (Corporate income tax) |
16% |
| Small companies (micro enterprises) |
3% |
- Capital gains taxation
- Profits are taxed at the general tax rate of 16%.
- Main allowable deductions and tax credit
- There are a certain number of possible deductions available in corporation taxes on condition that they are required to generate a taxable income (expense such as business advertising and promotion, environmental protection expenses, improving technological systems, management or maintenance services, and travel within Romania related to business...)
- Other corporate taxes
- Real property tax, social security.
Individual taxes
Tax rate
| Individual income tax |
Flat rate of 16% |
- Allowable deductions and tax credit
- There are certain allowances for children and personal deductions or taxable persons having dependents.
- Special expatriate tax regime
- 16%
Double taxation treaties
- Countries with whom a double taxation treaty have been signed
- List of tax treaties signed by Romania.
- Withholding taxes
- Dividends: 16%, Interest: 16%, Royalties: 16%
- Bilateral agreement
-
 We can indicate you which local taxes are applied to your product.
Accounting Rules
- Tax year
- The fiscal year begins on January 1 and ends on December 31. A system of quarterly payments in advance taking into consideration the corporation tax calculated for the previous year is applied for companies.
- Accounting standards
- Romaninan accounting standards follow the Forth and Seventh EC directives. IFRS also is accepeted as a second set of financial statements, but only for certain companies.
Several laws governing accounting principles and standards in Romania:
- The Ministry of Economy and Finance: Order No. 907/2005; Order No. 1752/2005; Order No. 1121/2006; Order No. 2001/2006
- National Ethics Code for the accounting profession
- Regulation No. 1606/2002 by the European Parliament assembly of 19 June 2002 on the Application of International Accounting Standards
- Accounting regulation bodies
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Institute of Chartered Accountants of Romania
- Accounting reports
- Bookkeeping records are divided into credit and debt, the latter being broken up into long-term and short-term debts.
The results give emphasis to the overall production and classifies expenses by type.
- Publication requirements
- Romanian businesses are asked as well as foreign companies with corporate names registered in Romania, to organize and conduct their own accounts including the preparation of annual as well as periodic financial reports. The Romanian Ministry of Public Finance's law No. 1752/2005 stipulates that all companies preparing simplified financial statements(simplified balance sheet, income statement and notes which explain the details of the financial report) and that only companies which have exceed the following criteria over two consecutive years or more must prepare a comprehensive annual financial report (balance chart, income statement, account statements, changes in shareholders, explanatory notes to accompany the financial report):
- Total balance: 3,650,000 EUR
- Net annual sales figures: 7,300,000 EUR
- Average number of employees during the accounting year: 50 The parent company is exempt from consolidating financial reports, if on the date of the financial statement, the entities which must be consolidated do not exceed two of the three following criteria:
- Total balance: 17,250,000 EUR
- Sales figures: 35,040,000 EUR
- Average number of employees during the accounting year: 250
- Professional accountancy bodies
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CECCAR
- Certification and auditing
- The audits must be conducted by financial auditors, who are legal persons or entities authorized by the Romanian Chamber of Financial Auditors. They must be conducted under the Standards of Auditing adopted by the Romanian Chamber of Financial Auditors, similar to international auditing standards. Few cases of exemption from audit requirements are subject to the audit carried out by financial censors:
- The annual financial reports prepared by businesses under the OMF law 1752/2005
- The annual financial reports prepared by insurance and reinsurance brokers who on the balance sheets do not exceed the limit of two of the criteria mentioned in the OMF law 1752/2005.
You can contact an external auditor: KPMG, Deloitte, Ernst & Young, PricewaterhouseCoopers.
- Accounting news
-
Association of Bucharest Accountants.
European Accounting Journal
IAS Plus
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Last updates: May 2012
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