DRAFT LAW ON SOME FISCAL-BUDGETARY MEASURES

DRAFT LAW ON SOME FISCAL-BUDGETARY MEASURES

The Ministry of Finance published, on 3rd July 2025, on its website, the draft law on some fiscal-budgetary measures (“the Draft”).

The measures are intended to cover the excessive budget deficit.

This bulletin presents the most important fiscal measures.

Dividend tax

  • The dividend tax rate is increased from 10% to 16% and applies to dividends distributed starting 1st January 2026, respectively starting with the first day of the modified fiscal year starting in 2026.
  • The measure applies to all categories of beneficiaries, Romanian individuals and non-resident individuals, Romanian legal entities and non-resident legal entities.

Additional tax for credit institutions

  • Romanian credit institutions and branches in Romania of foreign credit institutions owe, in addition to income tax, a specific turnover tax calculated by applying the following tax rates to the turnover:
  • 2%, for the period from 1st January 2025 to 30th June 2025 inclusive, respectively 4%, for the period from 1st July 2025 to 31st December 2025 inclusive;
  • 4%, starting with 1st January 2026.

Health Insurance Contribution for pension income

  • In the case of pension income, the monthly taxable income from pensions is determined by deducting from the pension income the monthly non-taxable amount of 3,000 lei and, where applicable, the social health insurance contribution (CASS) due.
  • It is proposed that individuals who are pensioners owe CASS of 10% on pension income, for the part that exceeds the monthly amount of 3,000 lei, for each pension right.
  • The measure applies to all categories of pensioners, regardless of the pension category they benefit from, namely: pension based on contribution to the public pension system, pension provided for by special laws (service pension), pension resulting from membership and contribution to a privately administered pension system or to voluntary pension systems.
  • These provisions apply to income earned starting from 1st August 2025

VAT

Increase in VAT rates from 1st August 2025

  • Increase in the standard rate from 19% to 21%.
  • Elimination of the application of the reduced rate of 5% and application of a reduced rate of 11% for operations currently subject to the reduced rate of 5%, namely for:
  • delivery of school textbooks, books, newspapers and magazines;
  • services consisting of allowing access to castles; museums, memorial houses, historical monuments, architectural and archaeological monuments, zoological and botanical gardens;
  • delivery of firewood and delivery of thermal energy in the cold season, intended for certain categories of consumers.
  • Increasing the reduced VAT rate from 9% to 11% for a narrower range of goods and services, namely for:
  • medicines for human use, food intended for human consumption, with certain exceptions;
  • water for irrigation;
  • fertilizers and pesticides;
  • water supply and sewage services;
  • buildings intended to be used as nursing homes and pensioners, children’s homes and recovery and rehabilitation centres for disabled minors;
  • accommodation and restaurant/catering services.

During the period 1st August – 31st October 2025, revenues from the HoReCa sector will be monitored, and depending on the results of the analyses carried out, a decision will be made on the VAT rate to be applied to this sector.

Delivery of housing as part of a social policy

  • The reduced VAT rate of 9% ((as of now) is no longer applicable to the delivery of housing as part of a social policy. The new standard VAT rate of 21% will apply to these.
  • Transitional provisions are provided, according to which housing can be purchased with a reduced rate for a period of one year, if legal acts between the living have been concluded by 1st August 2025, which have as their object the advance payment for the purchase of such housing.
  • At the same time, it is provided that individuals can purchase a single housing with a reduced rate if they have not purchased a housing with a reduced VAT rate since January 1, 2023, with a certain exception provided for by the Project.

Excise duties

  • Increase in excise duty levels, starting from certain specified dates, for: alcohol and alcoholic beverages, gasoline and diesel; non-alcoholic beverages with added sugar; processed tobacco products, products containing tobacco, intended for inhalation without burning and for products intended for inhalation without burning, containing tobacco substitutes, with or without nicotine; for liquid with or without nicotine.
  • The proposed excise duty levels are provided in the annexes to the Draft.

For more details on the subjects in question, I recommend that you consult the text of this draft and its explanatory statement at: