2024: New year, new rules

From 1 January 2024, with the entry into force of Law 296/2023 and Government Emergency Ordinance 115/2023, major changes have occurred in the Romanian economic sector. The newly introduced provisions cover a wide range of areas, but among the most important changes is the introduction of the RO e-Invoice system, which is mandatory for all entrepreneurs.

The introduction of RO e-Invoicing means that all businesses in Romania will have to use an electronic invoicing system. This measure will help to simplify administration and increase the transparency of financial transactions. However, this is just one of the changes that will be introduced in 2024.

In terms of changes to the tax law affecting businesses, new tax rates based on annual turnover have been introduced. Companies with an annual turnover of more than €50 million will be subject to a minimum tax rate of 1%. Banks will have to pay a tax of 2% on their annual turnover in 2024 and 2025, and will be reduced to 1% in 2026.

Changes have also been made for micro-enterprises. Businesses with an annual income of more than €60,000 or operating in certain CAEN codes (software development, HORECA, legal activities, health + dentistry) will have to pay a tax of 3%. Those that do not exceed this level have to pay 1% tax to the State.

The value of meal tickets will increase to RON 40 from 2024, but a 10% tax rate has been introduced. The value of holiday tickets has increased to RON 1600.

The social security contributions of self-employed persons will be a deductible cost this year, and the ceilings according to which they are calculated range from 6 to 60 minimum wages.

Excise taxes have also changed from 2024, with the introduction of an excise tax on heated tobacco products and an increase in most excise duties. VAT rates have also been changed: the VAT rate for the use of sports facilities, the transport of persons for tourism purposes, certain organic products has been increased from 5% to 19%; the VAT rate for the purchase of a first home, photovoltaic systems and high efficiency heating systems, as well as admission to sporting and cultural events, markets and fairs and certain organic products has been increased from 5% to 9%. The VAT rate for non-alcoholic beer and products containing 10% more added sugar (except for bread and biscuits) has increased from 9% to 19%.

Details of the above changes can be found in Law 296/2023 and in Government Emergency Decree 115/2023. This year promises to be an exciting one for traders and taxpayers, who should monitor the new provisions and adapt to the new rules.