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Wednesday, January 05, 2005

The new Tax regulations in Romania

As you probably know, the new Romanian government managed to make some changes in the taxes regulations in Romania just a couple of days before the New Year's Eve.

Some of the changes include:

- the salary tax will be changed to a unique quota of 16%, for all employees. This is a major change, as before this the tax system included different quotas that would go up to 40%. This change is very positive for the employees that have agreed on a gross salary, as they will gain quite some extra-cash every month.

- the social contributions will still be kept at 49,5% (for both employer and employee) and they won't be lowered to 47,5% as expected. They will be reduced though in 2006.

- for micro-companies, the income tax will be doubled from 1,5% to 3%. As you probably know, Romanian micro-companies could choose from paying an income tax (until now 1,5%) instead of a profit tax (of 16%). This will make the companies that have a profit rate of over 19% to be encouraged to choose to pay the profit tax. This measure is also expected to put some of the micro-companies in Romania in a more legal position, as we all know that the system that was before created a complex network of micro-companies that were masking avoiding the law in order to pay less taxes than they should.

- other changes: rent incomes will be taxed by 16%, taxes for copyright will be raised to 16%, gambling incomes will be taxed with 20% of gross value.

Posted by Mihai : 1/05/2005 11:08:00 am