Government Emergency Ordinance no. 78/2025 amending Law no. 239/2025

On 17 December 2025, Government Emergency Ordinance no. 78/2025 was published in the Official Gazette no. 1172. The GEO amends 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 to the Fiscal Code, more specifically regarding local taxes.

Local taxes

a. Building tax

• The removal of the provisions regarding the residential and mixed-use buildings owned by legal entities are postponed, entering into force starting 1 January 2027.

b. Land tax

• New amendments are made regarding the exemption/ reduction from the payment of land tax. Thus, the exemption/ reduction is granted only if the supporting documents are submitted to the local tax authorities within the deadline established by the local council decision and if the obligations for the previous year were paid on time. 
• The tax exemption for land related to the residential building owned jointly by the husband or wife is not granted for the share owned by third parties, if the case.
• These provisions enter into force starting 1 January 2026.

c. Vehicle tax

• Amendments are made to the computation of the tax on hybrid vehicles  with CO₂ emissions of 50g/km or less. As such, the tax is reduced by a maximum of 30% of the value provided in column 7, named as "Lei/Hybrid car with CO₂ emissions over 50 g/km" of the table in paragraph (2), according to the decision of the local council.
• The provision mentioned above, as well as the provisions regarding the amendment of the computation of the tax due for vehicles and the increase of the taxable amounts, enter into force starting 1 January 2026.

d. Other common provisions – Local taxes

• New exemptions/ reductions from the payment of local taxes are introduced, which will be decided by local councils based on a cost-benefit analysis for a determined period of time of no more than 2 fiscal years. These are established according to certain criteria defined by a decision adopted by 31 December 2025 for the year 2026.
• Once the decision for the year of 2027 is adopted, interim evaluations are carried out to see if the intended goal is achieved and thus, it is decided to grant the reduction/ exemption for the rest of the period or to terminate it in the future.
• The total amount of exemptions and/or reductions is no more than 5% of the total revenue from taxes and fees collected until the day before the adoption of the decision from the fiscal year preceding the one in which the exemption is granted.
• The local tax rates for 2026 are established by 31 December 2025 by decision of the local council. This decision must be transmitted to the regional/county public finance departments within 3 days of its adoption. In case of non-compliance with these provisions, the directors of the regional/county departments shall cease the provision, both of rates deducted from the income tax and of amounts deducted from revenues in the state budget, with certain exceptions (e.g. payments for the payment of salary rights and related contributions, including the rights due to personal assistants of persons with severe disabilities, as well as of monthly allowances of persons with severe disabilities and payments regarding the financing of the social protection system, as the case may be, when they cannot be provided from their own revenues) in order to balance the local budgets. The provision shall resume when the local administration authorities provide proof of approval of the local council's decision.
• Also, amendments are made regarding the annual indexation of certain amounts of local taxes, with the exception of the building tax, the land tax and the vehicle tax. This indexation is made based on the inflation rate for the previous fiscal year, communicated on the official websites of the ministries. If indexation was not carried out during 2025, the maximum levels provided for in the Fiscal Code, indexed annually, shall apply. The decisions of the local councils shall be adopted by 31 December 2025 for year 2026.
• The provisions mentioned above enter into force starting 18 December 2025.

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