Such taxes apply in case of an individual enterprise (IE) or authorized person (PFA), not to companies.

As an alternative to the company, the EU citizens and the residents of Romania, can open an PFA or IE.

This is like an individual contractor entity, but it is not a company.

In principle, a PFA/IE can undertake (almost) any type of business, same as a company.

The taxation for PFA/IE, starting with 2024:

• The net income tax: 10%;
• The health insurance tax:
  • If the yearly income is below approx. EUR 44,400, the PFA/IE shall pay a yearly 10% health insurance tax on the actual income;
  • If the yearly income is over approx. EUR 44,400, the PFA/IE shall pay a yearly fixed EUR 4,400.
• The social insurance tax (pension tax):
  • No social insurance tax have to be paid, it is optional, if the yearly income is under EUR 8,880 (approx.);
  • Fixed EUR 2,220 per year, if the annual income is between EUR 8,880 and EUR 17,760 (approx.);
  • Fixed EUR 4,440 per year, if the annual income is above EUR 17,760 (approx.).

The PFA/IE can become a VAT payer, for more details please check the VAT section for companies which is also applicable to the PFA/IE: here.

Important note: to duly organize the business activity and to fulfil all the tax & accounting duties, the PFA/IE needs to retain the services of a Romanian chartered accountant.

For more information, please contact us at: office@counselors.legal.