Fiscal Updates: Amendments to the Fiscal Code and the Entry into Force of the New Double Taxation Convention between Romania and the United Kingdom

On 24 December 2025, Government Emergency Ordinance no. 89/2025 was published in the Official Gazette no. 1203. The GEO amends Law no. 227/2015 on the Fiscal Code and Law no. 239/2025 regarding the establishment of measures for the recovery and efficiency of public resources and for the amendment and completion of certain normative acts.

We have included below a selection of the main amendments brought by the GEO.

Minimum Turnover Tax (”MTT”)

For the fiscal year 2026 (or the modified fiscal year beginning in 2026), the minimum turnover tax rate will be 0.5%. Starting 2027, this tax is set to be eliminated.

Supplementary tax for oil&gas sector

The period this tax applies is extended until 31 December 2026 inclusively (or the last day of the modified fiscal year ending in 2027).

MTT and supplementary tax for oil &gas sector – common amendments

A new rule is introduced according to which taxpayers who have subtracted the value of assets in progress/fixed assets (according to indicators I and A used in calculating the MTT and the supplementary tax) are obliged to keep these assets in their patrimony for the remaining period of a duration equal to half of the economic useful life established in accordance with the applicable accounting regulations, but no more than 5 years. Otherwise, the tax will be recalculated (including accesories, as applicable), starting from the quarter/year in which the subtraction occurred, and the taxpayer will be obliged to submit amended tax returns.

The rule mentioned above does not apply to certain types of assets (e.g., assets transferred within reorganizations, disposed of during liquidation/bankruptcy procedures, etc.).

An allocation rule is introduced whereby the exceeding borrowing costs related to financing used for the acquisition/production of work-in-progress/assets (those reflected in the calculation base through indicators I and A in for computing MTT, or the supplementary tax for the oil&gas sector) are assigned, for the following fiscal years, to the deductible threshold of EUR 1 mil. provided by art. 40² para. (4). In other words, when applying the EUR 1 mil. threshold in subsequent years, these costs will be included in this threshold, within the mechanism for limiting interest deductibility.

The above provisions regarding MTT and the supplementary tax for the oil&gas sector will enter into force starting 1 January 2026 (or starting with the modified fiscal year beginning in 2026).

The tax on microenterprise income

The tax rate on microenterprise income will be 1%, regardless of the volume of income or the types of economic activities carried out.

Salary taxes

The amount of RON 300 per month from salary income related to the period January – June 2026 will continue to be exempt from personal income tax and mandatory social contributions.

For income related to the period July – December 2026, the level of the exempt amount will be reduced to RON 200 per month.

Exemption applies subject to the fulfillment of certain conditions, provided that:

• the monthly gross base salary is equal to the national gross minimum wage; and
• the monthly gross income, excluding meal vouchers, holiday vouchers, and food allowances, does not exceed the following thresholds:
  • RON 4,300 (inclusive) for the period 1 January – 30 June 2026;
  • RON 4,600 (inclusive) for the period 1 July – 31 December 2026.

Taxation of income from other sources

Increase of tax rate from 10% to 16% starting 1 January 2026 for:

• goods and/or services received by a participant (shareholder) from a legal entity, granted or provided for the personal benefit of the participant;
• amounts paid by a legal entity to a participant for goods or services acquired from the participant, for the personal benefit of the participant, to the extent that such amounts exceed their market value.

Construction tax

Starting 2027 (or the fiscal year modified to begin in 2027), the construction tax will be eliminated.

Building tax

A new category of buildings is introduced for which local councils may grant exemption or reduction of the building tax, namely buildings that have been placed under a protection regime, other than historic monuments, located in protection zones of historic monuments and in protected built-up areas, for a period of 2 years, starting from January 1 of the year following the completion of renovation works, except for rooms used for other economic activities.

Moreover, buildings that are used as greenhouses, solariums, nurseries, mushroom houses, feed silos, silos, and/or storage rooms for storing and preserving cereals, except for rooms that are used for other business activities, will be exempt from paying building tax for the year 2026, and starting in 2027 the tax will be reduced by 50%.

e-Invoice

Starting with January 1^st, 2026, the deadline for transmitting invoices in the national RO e-Invoice system returns to 5 working days, instead of calendar days.

The reporting obligation through the RO e-Invoice system is established for invoices issued by taxable persons established in Romania towards taxable persons who are not established in Romania but are registered for VAT purposes in Romania.

At the same time, individuals identified by CNP and which act as taxable persons, are obliged to request registration in the mandatory RO e-Invoice Register before starting to carry out economic activities or, as the case may be, before January 15^th, 2026 if they carried out economic activities prior to this date. The registration procedure will be updated by NAFA Order within 15 days from the entry into force of the ordinance.

e-VAT

Starting with 1^st of January 2026, the obligation of taxpayers to respond to the RO e-TVA Compliance Notices, provided by GEO no. 70/2024, is eliminated.

Additionally, for taxpayers applying the VAT on collection system, the application of the provisions regarding the transmission of notifications is suspended until 30^th of September 2026, by which time the necessary IT tools for completing the pre-filled RO e-TVA return will become available.

Proposal for the Minimum Wage Increase

According to a draft Government Decision currently under public consultation, starting July 1, 2026, the guaranteed national gross minimum base salary will increase to 4,325 lei RON month.

Entry into force of the new Convention for the avoidance of double taxation concluded between Romanian and the UK

On 22 December 2025, the new Romania - United Kingdom Double Tax Treaty entered into force. The treaty will apply as follows:

• In Romania: starting 1 January 2026.
• In the UK: starting 1 January 2026 for withholding taxes; starting 1 April 2026 for corporation taxes; from 6 April 2026 for income and capital gains taxes.

For more information regarding the above, the EY team is at your disposal.