In general, costs not incurred for the production of taxable income are not deductible for Romanian tax purposes.

Specific non-deductible costs include:

Management, assistance, and consultancy service expenses that are not justified with documentation are not deductible;
Unrealized share or bond losses are not deductible;
Romanian and foreign profits tax are not deductible;
Interest expenses exceeding the amount calculated as per interest deduction restriction rules are not deductible (see Sec 12.2.);
Effective 1 January 2021, expenses incurred on transactions carried out with a person located in a jurisdiction listed in Annex I and/or Annex II of the EU list of non-cooperative jurisdictions are not deductible (see Sec. 12.5.);
Tax-related fines, interest, and penalties are not deductible;
Expenses incurred for the benefit of shareholders or associates, other than payments for goods and services at market value are not deductible;
Salary expenses that are not taxed at the level of the individual are not deductible, unless the law provides otherwise;
Expenses related to missing or damaged inventory or tangible assets when not insured are not deductible;
Sponsorship expenses are not deductible, although they may be claimed as a credit against profits tax due, subject to certain limitations - the credit is limited to 0.5% of the company’s turnover and 20% of the profits tax due; and
Effective from 1 January 2022, the deduction for expenses related to the disposal of receivables in excess of 30% of the net loss resulting from the difference between the disposal price and the cost/value of the receivables (70% for credit institutions, subject to conditions) are not deductible.

Powerful Tax Solutions

Tax Rules Engine

Collaboration Tools

Latest Tax News