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

As an alternative to the company, the EU citizens and the residents of Romania, can open an individual entrepreneurship (PFA or authorized person).

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

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

The taxation for PFA, starting with 2024:

• The net income tax: 10%;
• The health insurance tax:
  • If the yearly income is below approx. EUR 39,780, the PFA shall pay a yearly 10% health insurance tax on the actual income;
  • If the yearly income is over approx. EUR 39,780, the PFA shall pay a yearly fixed EUR 3,978.
• The social insurance tax (pension tax):
  • No social insurance tax have to be paid, it is optional, if the yearly income is under EUR 7,950 (approx.);
  • Fixed EUR 1,980 per year, if the annual income is between EUR 7,950 and EUR 15,912 (approx.);
  • Fixed EUR 3,960 per year, if the annual income is above EUR 15,912 (approx.).

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

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

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