“The fact that Romania is positioned in the first third of Paying Taxes ranking for the second consecutive year is a positive thing. By cutting social security contribution rate in the fall of 2014, Romania managed to lower total tax rate to 42% from 43.2% last year. Thus, in this year’s edition, Romania outranks Bulgaria (88), the Czech Republic (122), Slovakia (73), Poland (58) and Hungary (95), and is outranked by Croatia (38), Slovenia (35) and the Baltic states (Estonia 30, Latvia 27 and Lithuania 49),” said Mihaela Mitroi, PwC Romania Tax And Legal Services Leader.
Total tax rate measures the amount of taxes and mandatory contributions to be paid by a company as percentage of its profit. Romania’s total tax rate stood at 42% in 2014, below the average of Central and Eastern European countries (45%) and close to the global average (40.8%).
In terms of time to comply with fiscal legislation, Romania is among the top CEE states, with 159 hours/year, compared with a regional average of 218 hours and a global level of 261 hours.
An average-sized company in Romania should carry out 14 tax payments annually, compared with a regional average of 9.5 payments and a global average of 25.6 payments.
Although Romania made important progress as regards the number of payments (from 39 payments in “Paying Taxes 2014” to 14 payments in “Paying Taxes 2016”), it is still outranked by many CEE states.
“Paying Taxes 2016” study is designed to measure the “ease of paying taxes” for an average sized company, including corporate income taxes, employment taxes and mandatory contributions, property taxes, turnover taxes, property transfer taxes, road taxes, environmental taxes and other small taxes and a variety of smaller payments such as municipal taxes.