Welcome with new taxes? The Plough, 2025 version

On New Year’s Eve, the Romanian private sector receives a “new surprise”: the Emergency Ordinance 156/2024, also known as the “ordinance-train“, which comes with a series of significant measures directly affecting the Romanian business environment. Published in the Official Gazette, it brings a series of tax changes, most of which have a considerable impact on entrepreneurs and small businesses.

Micro-enterprise income tax

Several changes are made in this area, namely:

-The ceiling of income realized by a Romanian legal entity is reduced from €500,000 to €250,000, and from January 1, 2026 to €100,000. -For the year 2025 this calculation takes into account the income realized on 31.12.2024. Therefore, all Romanian legal entities that on 31.12.2024 have realized revenues of more than 1,243,525 lei will be subject to the 16% corporate income tax.
-The condition of realization of income, other than consultancy and management, in the proportion of 80%, for inclusion in the category of micro-enterprises is eliminated.
-Update the CAEN codes for which the tax on microenterprise income is 3%. Thus, as from January 1, 2025, the following activities, whether main or secondary, will also be taken into account, corresponding to the CAEN codes: 6210 – Custom software activities (customer-oriented software), 6290 – Other information technology service activities, 5611 – Restaurants, 5612 – Activities of mobile food service establishments, 5622 – Other food service activities n.e.c.”.

Dividend tax increases

Increases the tax rate from 8% to 10% for dividends distributed on or after January 1, 2025.

-Special construction tax (“pole tax”) returns

The tax on constructions, payable by Romanian legal entities, foreign legal entities operating through a permanent establishment in Romania, is reinstated.

The constructions are included in group 1 of the Catalog on the classification and normal operating life of fixed assets, and the tax is calculated by applying a rate of 1% on the value of the constructions existing in the taxpayer’s patrimony on December 31 of the previous year The tax is payable in two equal installments, up to May 25 and September 25 inclusive.

Tax breaks for employees in the IT, construction, agriculture, food, construction, IT, construction, agriculture and food industries are abolished

-From January 2025 onwards, employees in IT, construction, agriculture and the food sector will no longer benefit from the tax breaks that were initially planned to be granted until the end of 2028.
-For the year 2025, the exemption measure will continue for the amount of 300 lei related to the minimum wage, not including bonuses and other allowances. However, in the construction sector, employees will lose the tax facilities specific to this sector and they will not benefit from the 300 lei deduction (deduction that benefits those in the agricultural and food industry sectors), because according to the new GEO 156/2025, in this sector, the gross minimum wage is set at 4582 lei per month, and the condition for the application of the tax exemption on the amount of 300 lei is that the gross income realized from wages and salaries, not including the value of meal vouchers, respectively food allowance, does not exceed the level of 4,300 lei inclusive.

For those working in the state sector, this ordinance provides for freezing salaries and pensions, and cuts holiday vouchers by half. Budgetary employees will continue to receive holiday vouchers, up to 800 lei, on condition that the employee provides a payment of 800 lei. The cut will mainly affect hotels and other tourism companies, where payments can be made with these vouchers.

Unfortunately, these measures are applied without transparency, and it is once again the private sector that will bear the brunt of the economic crisis. Emergency Ordinance 156/2024 will reshape the Romanian economic landscape, putting huge pressure on small entrepreneurs and the middle class. It is obvious that these changes do not take into account their long-term impact and are not applied in a balanced way, which means that only part of the population, mainly the private sector, will bear the economic costs of the crisis.

In the context of these changes, the question arises whether there is a coherent economic strategy that can really support the recovery of the Romanian economy. There is a need for economic decisions to be taken with a greater degree of transparency and to fairly involve both the public and private sectors.