Is the 1% micro-enterprise tax really on revenue, not profit?

Yes — this is what makes it unusual and potentially very valuable. A Romanian SRL Micro pays 1% of total gross revenue up to €100,000/year (2026 threshold), regardless of expenses or profit margin. For a consulting or software business with very low overhead costs (i.e., high margins), this results in an extremely low effective tax rate. However, the 16% dividend tax in 2026 means extraction costs are higher than before.

How did the 2026 tax changes affect the SRL Micro strategy?

Three significant changes from 2026: (1) Revenue threshold halved from €250k to €100k — businesses above €100k gross revenue now pay 16% CIT instead of 1%; (2) Dividend tax raised from 10% to 16%; (3) The 20% consulting restriction was removed (positive). For businesses under €100k revenue, the combination is still excellent. For those above €100k, the jump to 16% CIT makes Romania less distinctively competitive versus Bulgaria (10% CIT + 5% dividend).

Should I use a PFA or SRL?

For income under €100,000/year: SRL Micro at 1% of revenue is typically better than PFA at 10% of profit. For very low income (under ~€20,000/year): PFA is simpler and cheaper to maintain. For income over €100,000/year: regular SRL at 16% CIT vs PFA at 10% of profit — depends on margin structure. Consult a Romanian accountant for your specific situation.

What about the digital nomad visa 6-month tax exemption — how does it work in practice?

From the date your Romanian residence permit is issued, you are exempt from Romanian income tax and social contributions for 6 months. This means even if you're earning well above the income threshold, you pay zero Romanian tax during this initial period. After 183 days of physical presence in Romania in any 12-month period, you become tax resident and standard Romanian taxation applies.

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🇷🇴 Romania

Cost of Living

€1,000–€1,400

Monthly Budget (Bucharest)

Single expat, comfortable all-in

€800–€1,100

Monthly Budget (Cluj)

15–25% cheaper than Bucharest

10%

Income Tax (flat)

Unchanged in 2025 and 2026; joint-lowest in EU

1% revenue

Micro-Enterprise Tax

SRL micro up to €100,000/yr in 2026

16%

Dividend Tax

Increased from 10% in 2025 — major 2026 change

RON (Leu)

Currency

1 EUR ≈ 5 RON (2026); euro adoption not imminent

Last updated: March 2026

Overview🏛️Bucharest 🏗️Cluj-Napoca

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Overview

Romania combines a 10% flat personal income tax (joint-lowest in EU) with a remarkable 1% micro-enterprise revenue tax for SRL companies under €100,000/year (2026). A single expat can live comfortably in Bucharest for €1,000–€1,400/month and in Cluj-Napoca for €800–€1,100/month. Key 2026 changes: dividend tax raised to 16%; micro-enterprise threshold tightened to €100,000 (from €250,000 in 2025). The currency is the Romanian Leu (RON); euro adoption is a medium-term aspiration but not imminent.

Key Takeaways

Flat rate: 10% on all taxable personal income — salaries, freelance income, rental income, capital gains, investment income
Sole trader registration (PFA): relatively simple; register at the National Trade Register Office (ONRC — onrc.ro); typically 3–5 days
SRL Micro (Micro-Întreprindere): company taxed at 1% of total revenue (NOT profit) — uniquely favourable for low-cost, high-margin businesses
Coffee (espresso at a local café): €0.80–€1.50 in Bucharest; €0.60–€1.20 in Cluj
Major banks: BCR (Romanian Commercial Bank, part of Erste Group), BRD (part of Société Générale), ING Romania, Raiffeisen Bank Romania, UniCredit Bank Romania

Personal Income Tax (2026)

Romania's 10% flat PIT is unchanged and remains one of the most competitive rates in the EU.

Flat rate: 10% on all taxable personal income — salaries, freelance income, rental income, capital gains, investment income
This rate has been in place since 2018 (reduced from 16%) and is confirmed unchanged for 2025 and 2026
No lower band, no upper band — a single rate regardless of income level
Capital gains tax: 10% (on property sales, shares, crypto); primary residence sold after 3+ years of ownership: tax-free
No wealth tax, no gift tax in Romania
Tax year: calendar year; annual return (Declarația Unică) deadline May 25 of following year
Tax residency triggered by 183+ days/year in Romania or 'centre of vital interests' in Romania
Digital Nomad Visa holders: first 6 months of Romanian residence are fully exempt from PIT and social contributions

PFA (Freelancer / Sole Trader) Tax Treatment

PFA (Persoană Fizică Autorizată) is the primary structure for freelancers working independently in Romania.

Sole trader registration (PFA): relatively simple; register at the National Trade Register Office (ONRC — onrc.ro); typically 3–5 days
Two tax methods: (a) 'sistem real' — 10% PIT on actual net profit (income minus allowable expenses); (b) 'norme de venit' — fixed income estimate per profession and region, 10% PIT on that fixed amount
CASS (health contribution): 10% of declared income base, capped at 60× minimum gross salary (approximately €50,000/year); mandatory
CAS (pension contribution): 25% of declared base; mandatory if annual income exceeds 12× minimum gross salary (~€9,600/year); optional below
Declarația Unică: single annual tax return combining PIT, CASS, and CAS declarations; deadline May 25
PFA is simpler than SRL but offers less tax planning flexibility — the 1% micro-enterprise SRL structure is often preferred by higher earners

SRL Micro-Enterprise — 1% Revenue Tax (2026)

The Romanian micro-enterprise SRL remains one of the EU's most tax-efficient structures for small businesses in 2026, despite tightening thresholds.

SRL Micro (Micro-Întreprindere): company taxed at 1% of total revenue (NOT profit) — uniquely favourable for low-cost, high-margin businesses
Revenue threshold for micro status in 2026: €100,000/year (reduced from €250,000 in 2025 and €500,000 in 2024)
As of January 1, 2026: single 1% rate applies to all micro-enterprises (previous two-tier 1%/3% structure eliminated)
The 20% consulting/management revenue restriction for maintaining micro status was REMOVED in 2026 — consulting and management businesses can now use the 1% rate freely
Dividend tax in 2026: 16% (increased from 10% in 2025); significantly reduces attractiveness of dividend distributions
Combined effective rate: 1% revenue tax + 16% dividend = roughly 16.96% on distributed profits at 100% margin; lower effective rate on actual profit margins
SRL formation: register at ONRC online; minimum capital 1 RON (~€0.20); typically 1–3 days; local accountant essential (€50–€150/month)
Above €100,000 revenue: transition to standard 16% corporate income tax

Detailed Cost of Living

Romania remains significantly cheaper than EU averages across most everyday expenses.

Coffee (espresso at a local café): €0.80–€1.50 in Bucharest; €0.60–€1.20 in Cluj
Restaurant meal (mid-range): €10–€18/person with drink in Bucharest; €8–€15 in Cluj
Beer (local Ursus, Timișoreana): €1.50–€3 at a bar
Monthly groceries for one person: €180–€260
Utilities (electricity, heating, water, rubbish): ~€130/month average
Public transport monthly pass (metro + buses): ~€15 in Bucharest; ~€10 in Cluj
Petrol: approximately €1.55–€1.75/litre (among the more affordable EU rates)
Cinema ticket: €5–€8
Gym membership: €20–€40/month
Mobile SIM (15+ GB): €5–€15/month (Orange, Vodafone, Telekom, Digi)
Internet (100–500 Mbps fibre): €10–€20/month — among EU's best value

Banking and Money

Banking in Romania is straightforward for EU citizens and residents. The currency remains the Romanian Leu (RON).

Major banks: BCR (Romanian Commercial Bank, part of Erste Group), BRD (part of Société Générale), ING Romania, Raiffeisen Bank Romania, UniCredit Bank Romania
Account opening: passport or EU ID + Romanian address registration (domiciliu/reședință); permit or registration certificate
ING Romania: best English-language digital banking experience; highly recommended by expats; mobile app excellent
BRD and Raiffeisen: also expat-friendly; wider branch networks
EUR widely accepted for rent and large transactions; day-to-day shopping in RON; ATMs dispense RON
Wise and Revolut: widely used by expats; both function well in Romania; essential for international transfers
Romania is NOT in the eurozone — currency exchange RON↔EUR is necessary; rate typically around 5 RON = 1 EUR

Disclaimer: The information on this page is for general informational purposes only and does not constitute financial, tax, legal, or investment advice. Tax rates, regulations, and investment rules change frequently. Always verify data with official sources and consult qualified professionals before making decisions. Read full disclaimer

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