Romania: Draft laws propose direct and indirect tax changes

Proposed increase in investment income tax rate to 2% (over 365 days) and 4% (under 365 days)

A draft law published on August 14, 2025, proposes the following direct tax changes effective January 1, 2026:

Repeal of minimum turnover tax
Introduction of limitation on deductibility of affiliate expenses exceeding 3%
Introduction of 10% tax (after 30% deduction) on short-term rental and accommodation income (up to seven rooms)
Increase in investment income tax rate to 2% (over 365 days) and 4% (under 365 days)

In addition, draft laws published on August 20, 2025, would amend the value added tax (VAT) law to transpose effective September 1, 2025:

EU Directive 2020/285 on the small and medium enterprises (SME) VAT scheme, including raising the VAT exemption threshold to RON 395,000 and providing rules for when the scheme ceases to apply as well as transitional rules for threshold changes and foreign entities with Romanian VAT identification numbers
EU Directive 2022/542 on the application of VAT to virtual events, including rules providing for the taxation of virtual event admissions for non-taxable persons where the consumer is established and updates to the margin scheme rules for works of art supplied to taxable dealers

For more information, contact a KPMG tax professional in Romania:

Vlad Craciun | vcraciun@kpmg.com

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Romania: Draft laws propose direct and indirect tax changes

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