Specific Taxes in Romania
Romania's tax landscape extends beyond corporate and personal income taxes, encompassing a diverse range of specific taxes that contribute to the country's fiscal revenue and serve various policy objectives.
Value-Added Tax (VAT)
VAT is a consumption tax levied on the sale of goods and services. It is a comprehensive tax that applies to most business transactions, with a standard rate of 19%. Reduced rates of 9% and 5% apply to certain essential goods and services, such as food, beverages, and transportation.
Excise Duties
Excise duties are levied on specific goods, such as alcohol, tobacco, and fuel. These taxes aim to discourage consumption of harmful substances and generate revenue for the government. The rates vary depending on the type and quantity of the goods.
Property Tax
Property tax is an annual tax levied on the ownership of real estate. The tax base is the value of the property, and the rates vary depending on the type and location of the property.
Inheritance and Gift Tax
Inheritance and gift tax is levied on the transfer of property or assets from one person to another. The tax rates vary depending on the relationship between the parties involved and the value of the transferred assets.
Environmental Taxes
Romania imposes environmental taxes on activities that have a negative impact on the environment. These taxes include pollution charges, waste disposal fees, and taxes on the use of natural resources. The revenues generated from these taxes are typically used to fund environmental protection measures.
Stamp Duty
Stamp duty is a tax levied on various legal documents and transactions, such as property transfers, share transfers, and contracts. The rates vary depending on the type of document or transaction.
Taxpayers Subject to Specific Taxes
The taxpayers subject to specific taxes vary depending on the nature of the tax.
- VAT: Businesses engaged in the supply of goods and services are liable for VAT.
- Excise Duties: Manufacturers, importers, and distributors of excisable goods are liable for excise duties.
- Property Tax: Owners of real estate are liable for property tax.
- Inheritance and Gift Tax: Beneficiaries of inherited or gifted property or assets are liable for inheritance and gift tax.
- Environmental Taxes: Companies and individuals engaged in activities that have a negative impact on the environment are liable for environmental taxes.
- Stamp Duty: Parties involved in transactions subject to stamp duty, such as property buyers, shareholders, and parties to contracts, are liable for stamp duty.
Purpose and Rationale
The specific taxes in Romania serve various purposes, including:
- VAT: VAT is a major source of revenue for the government and contributes to funding public services. It also promotes economic growth and fiscal stability.
- Excise Duties: Excise duties discourage the consumption of harmful substances and generate revenue for the government.
- Property Tax: Property tax contributes to local government budgets and helps regulate property ownership.
- Inheritance and Gift Tax: Inheritance and gift tax helps redistribute wealth and ensure fairness in the tax system.
- Environmental Taxes: Environmental taxes aim to internalize the costs of environmental damage and encourage sustainable practices.
- Stamp Duty: Stamp duty generates revenue for the government and helps regulate legal transactions.
Legal Framework
The specific taxes in Romania are established by various legal statutes and regulations, including:
- VAT: Law No. 227/2015 on the Value Added Tax
- Excise Duties: Law No. 571/2003 on Excise Duties
- Property Tax: Law No. 227/2015 on Property Tax
- Inheritance and Gift Tax: Law No. 141/1999 on Inheritance and Gift Tax
- Environmental Taxes: Law No. 196/2005 on Environmental Protection
- Stamp Duty: Law No. 122/1996 on Stamp Duty
These legal texts outline the obligations, rates, and procedures for the collection and enforcement of specific taxes in Romania.
If delving into the depths of Romanian tax rules and regulations isn't your style, and you'd rather have experts take the reins, then Heavnn is here to help.
Let us simplify your tax planning journey. Access Heavnn's blend of professional expertise and cutting-edge technology by clicking the button below.
