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On December 24, 2025, Romania’s government approved a new package of fiscal measures aimed at reducing budget expenditures and supporting economic recovery by encouraging private investment. Finance Minister Alexandru Nazare announced the decisions at a press conference in Bucharest.
Cost-cutting and tighter control of public enterprises
The package includes reducing subsidies for political parties, postponing measures that would lead to additional increases in social spending, and revising indexation mechanisms to safeguard fiscal sustainability. Stricter rules on expenditure control and financial responsibility within state-owned enterprises form a central part of the reform agenda.
Changes to taxation of large companies
A key reform for the private sector concerns the gradual elimination of the minimum turnover tax. The current 1% tax on companies with annual turnover above €50 million will be reduced to 0.5% in 2026 and abolished entirely in 2027. It will be replaced by a new “affiliates tax”.
New affiliates tax targets profit shifting
The affiliates tax introduces a cap on the deductibility of expenses paid to foreign affiliated entities. The rule applies to management fees, intellectual property royalties, intra-group interest, and consultancy services. Only 3% of such expenses will be deductible, while the remaining amount will be taxed at Romania’s standard 16% corporate income tax rate. The measure is designed to curb profit shifting abroad.
Simplification for microenterprises
Starting in 2026, Romania will apply a single 1% turnover tax rate for all microenterprises with annual revenue below €100,000. The government says this will improve liquidity for small entrepreneurs and simplify tax compliance by eliminating multiple thresholds.
Fiscal context and EU oversight
The reforms come amid persistent fiscal pressure. Romania’s general government deficit reached 9.3% of GDP in 2024, according to Eurostat, keeping the country under the EU’s excessive deficit procedure. Despite this, the European Commission has recently assessed Romania’s fiscal trajectory as compliant with the EU fiscal framework.
Implications for investors
Romania’s approach combines austerity with targeted tax reform, signalling a shift toward tighter oversight of cross-border transactions while seeking to attract genuine private investment. Businesses should expect increased scrutiny of intra-group expenses alongside a more predictable framework for domestic investment.
According to International Investment experts, Romania’s latest fiscal measures mark a strategic recalibration, balancing deficit reduction with incentives for private investment, and are likely to reshape the corporate tax environment from 2026 onward.