{"id":12134,"date":"2021-04-14T15:22:51","date_gmt":"2021-04-14T12:22:51","guid":{"rendered":"https:\/\/www.kreston.ro\/?page_id=12134"},"modified":"2021-04-16T10:51:06","modified_gmt":"2021-04-16T07:51:06","slug":"investing-in-romanian-properties","status":"publish","type":"page","link":"https:\/\/www.kreston.ro\/en\/investing-in-romanian-properties\/","title":{"rendered":"Investing in Romanian properties"},"content":{"rendered":"

[vc_row full_width=”stretch_row_content” wrap_container=”yes” is_section=”yes” section_skin=”parallax” css=”.vc_custom_1618404554999{margin-top: 120px !important;}”][vc_column width=”1\/2″][vc_custom_heading text=”income tax” font_container=”tag:h2|font_size:60|text_align:center|color:%231e73be” google_fonts=”font_family:IM%20Fell%20Great%20Primer%20SC%3Aregular|font_style:400%20regular%3A400%3Anormal”][vc_column_text]INDIVIDUALS<\/strong><\/span><\/p>\n

Renting properties is subject to 10% income tax. However, a flat deduction of 40% from the gross revenue is applicable; therefore, the final income tax is 6% (the rule is suitable for up to 5 rented properties).<\/span><\/p>\n

The tax is due to be reported (online) and paid on May 25th of the following year. Foreign individuals need a tax registration in Romania.<\/span>[\/vc_column_text][vc_message color=”info” css_animation=”slideInLeft”]The tax regime in the residence country should be considered[\/vc_message][vc_column_text]The sale of properties in Romania is subject to a 3% revenue tax. A fixed deduction of RON 450,000 is applicable. The tax is paid to the Notary when the sale agreement is signed.<\/span><\/p>\n

Romanian residents are due to pay a health insurance contribution if the yearly taxable income is at least the equivalent of 12 national minimum wages (RON 27,600<\/strong>). <\/span><\/p>\n

If anticipated, the health insurance contribution is RON 2,760 RON\/year<\/strong>.<\/span>[\/vc_column_text][\/vc_column][vc_column width=”1\/2″][vc_single_image image=”12146″ img_size=”full”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content” wrap_container=”yes” is_section=”yes” section_skin=”parallax” css=”.vc_custom_1618406808349{margin-top: -30px !important;}”][vc_column width=”1\/2″][vc_single_image image=”12164″ img_size=”full” css=”.vc_custom_1618407030375{margin-top: 70px !important;}”][\/vc_column][vc_column width=”1\/2″][vc_column_text]COMPANIES<\/strong><\/span><\/p>\n

Small companies (yearly revenues less than EUR 1 million) are subject to a revenue tax (1% or 3% if the company has\/does not have employees).<\/p>\n

The company’s profits may be distributed to individual shareholders after a 5% dividend tax (withheld).[\/vc_column_text][vc_message color=”info” css_animation=”slideInRight”]The tax regime in the residence country should be considered[\/vc_message][vc_column_text]Larger companies (yearly revenues at least EUR 1 million) are subject to 16% profit tax.<\/p>\n

Complete accounting reports are required for any company. A CPA or internal accounting department must prepare the financial statements. An audit is not mandatory except for larger companies.[\/vc_column_text][\/vc_column][\/vc_row][vc_row][vc_column][vc_separator color=”mulled_wine” show_icon=”yes” icon_color=”#ffffff” icon_bg_color=”#1e73be” icon=”fas fa-check” css=”.vc_custom_1618491049390{margin-top: -10px !important;}”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content” wrap_container=”yes” is_section=”yes” section_skin=”parallax”][vc_column width=”1\/2″][vc_custom_heading text=”PROPERTY TAX
\nresidential properties” font_container=”tag:h2|font_size:40|text_align:center|color:%231e73be” google_fonts=”font_family:IM%20Fell%20Great%20Primer%20SC%3Aregular|font_style:400%20regular%3A400%3Anormal”][vc_column_text]INDIVIDUALS<\/strong><\/span><\/p>\n

The tax is 0.08%-0.2% per year from the building’s taxable value, depending on the Municipality decision. The taxable value is calculated according to the tax code and cannot exceed RON 2,600\/sqm in 2021.<\/p>\n

Foreign individuals need a representative to register the property with the Municipality.[\/vc_column_text][vc_column_text]COMPANIES<\/strong><\/span><\/p>\n

The Property tax for the company’s residential properties is 0.08%-0.2% per year from the building’s taxable value, depending on the Municipality decision.<\/p>\n

The difference compared to individual owned properties is the taxable base. The taxable base is the purchase value or the value resulting from a certified evaluation in companies’ case. Such evaluations are due every five years.[\/vc_column_text][\/vc_column][vc_column width=”1\/2″][vc_single_image image=”12209″ img_size=”full”][\/vc_column][\/vc_row][vc_row][vc_column][vc_separator color=”mulled_wine” show_icon=”yes” icon_color=”#ffffff” icon_bg_color=”#1e73be” icon=”fas fa-check” css=”.vc_custom_1618491049390{margin-top: -10px !important;}”][\/vc_column][\/vc_row][vc_row full_width=”stretch_row_content” wrap_container=”yes” is_section=”yes” section_skin=”parallax”][vc_column width=”1\/2″ css=”.vc_custom_1618493347327{margin-top: 100px !important;}”][vc_single_image image=”12218″ img_size=”full”][\/vc_column][vc_column width=”1\/2″][vc_custom_heading text=”VAT” font_container=”tag:h2|font_size:60|text_align:center|color:%231e73be” google_fonts=”font_family:IM%20Fell%20Great%20Primer%20SC%3Aregular|font_style:400%20regular%3A400%3Anormal”][vc_column_text]1. PURCHASE<\/strong><\/span><\/p>\n

The regular VAT quota is 19%. However, a 5% VAT applies to houses sold to individuals, in certain circumstances: useful area max 120 sqm and value up RON 450,000. The deal will be increased to EUR 140,000 starting with 2022.<\/p>\n

The reversed charge is applicable for transactions between VAT entities.<\/p>\n

 <\/p>\n

2. RENT<\/strong><\/span><\/p>\n

Rent of buildings (long term) is VAT exempted unless the owner chooses otherwise. Should the owner deducted VAT upon purchase, renting without VAT will generate VAT liabilities consisting of deducted VAT adjustments? The adjustment period is 20 years.<\/p>\n

 <\/p>\n

3. SALE<\/strong><\/span><\/p>\n

The sale of the building that is now new is VAT exempted unless the owner chooses otherwise. Should the owner deducted VAT upon purchase, renting without VAT will generate VAT liabilities consisting of deducted VAT adjustments? The adjustment period is 20 years.<\/p>\n

 <\/p>\n

[\/vc_column_text][\/vc_column][\/vc_row][vc_row css=”.vc_custom_1618559322635{margin-top: -40px !important;}”][vc_column width=”1\/3″][\/vc_column][vc_column width=”1\/3″][vc_custom_heading text=”Summary” font_container=”tag:h2|font_size:60|text_align:center|color:%231e73be” google_fonts=”font_family:IM%20Fell%20Great%20Primer%20SC%3Aregular|font_style:400%20regular%3A400%3Anormal”][vc_column_text]<\/p>\n\n\n\n\n\n\n
OWNER<\/td>\nVAT PURCHASE<\/td>\nVAT RENT<\/td>\nVAT SALE<\/td>\nTAX RENT<\/td>\nTAX SALE<\/td>\nPROPERTY TAX BASIS<\/td>\n<\/tr>\n
INDIVIDUAL<\/td>\n19%\/5%<\/td>\n0<\/td>\n0<\/td>\n6%<\/td>\n3% (ron 450 K exempted)<\/td>\nMax RON 2,600\/sqm<\/td>\n<\/tr>\n
VAT Company (micro)<\/td>\nReversed charge<\/td>\n19%<\/td>\n19%<\/td>\n3% on revenue + 5% on dividends<\/td>\n3% on revenue + 5% on dividends<\/td>\nPurchase price or evaluation<\/td>\n<\/tr>\n
Non VAT Company (micro)<\/td>\n19%<\/td>\n0<\/td>\n0<\/td>\n3% on revenue + 5% on dividends<\/td>\n3% on revenue + 5% on dividends<\/td>\nPurchase price or evaluation<\/td>\n<\/tr>\n<\/tbody>\n<\/table>\n

[\/vc_column_text][\/vc_column][vc_column width=”1\/5″][\/vc_column][\/vc_row][vc_row][vc_column width=”1\/5″][\/vc_column][vc_column width=”3\/5″][vc_message color=”info” message_box_style=”solid-icon”]<\/p>\n

The purpose of this page is to disclose the tax rules applicable to investments in Romanian properties (more specifically apartments), helping investors to choose the most tax-efficient model for their investment.<\/p>\n

This is a list of the general rules. For a thorough, personalized diagnostic, please contact us:<\/p>\n

Eduard Pavel \u2013 Certified tax advisor
\n+40 727 333 345, eduard.pavel@kreston.ro<\/a><\/p>\n

[\/vc_message][\/vc_column][vc_column width=”1\/5″][\/vc_column][\/vc_row]<\/p>\n<\/div>","protected":false},"excerpt":{"rendered":"

[vc_row full_width=”stretch_row_content” wrap_container=”yes” is_section=”yes” section_skin=”parallax” css=”.vc_custom_1618404554999{margin-top: 120px !important;}”][vc_column width=”1\/2″][vc_custom_heading text=”income tax” font_container=”tag:h2|font_size:60|text_align:center|color:%231e73be” google_fonts=”font_family:IM%20Fell%20Great%20Primer%20SC%3Aregular|font_style:400%20regular%3A400%3Anormal”][vc_column_text]INDIVIDUALS Renting properties is subject to 10% income tax. However, a flat deduction of 40% from the gross revenue is applicable; therefore, the final income tax is 6% (the rule is suitable for up to 5 rented properties). The tax is due to […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"closed","ping_status":"closed","template":"","meta":{"footnotes":""},"class_list":["post-12134","page","type-page","status-publish","hentry"],"yoast_head":"\nInvesting in Romanian properties - Kreston Romania<\/title>\n<meta name=\"description\" content=\"Accounting and audit partner Carmen Cojocaru and tax advisory partner Eduard Pavel. 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