Business #22 Legislative focus

During last week’s meeting, the Government approved a new state aid scheme to support large investment projects in Romania’s manufacturing sector. Companies investing at least RON 50 million in eligible manufacturing activities will be able to apply for grants or tax credits under a scheme with a total budget of RON 5.3 billion. To qualify, projects must meet environmental objectives such as improving energy efficiency, reducing emissions, supporting the circular economy or preventing pollution. Investments must begin within six months of receiving approval and be maintained for at least five years.

Manufacturing companies investing at least RON 50 million can apply for state aid through grants or tax credits. Businesses must provide at least 25% co-financing, meet environmental criteria, and maintain the investment for at least five years.

AUR MPs have submitted a legislative proposal to reduce Romania’s dividend tax from 16% to 8%. The measure would apply to dividends paid by Romanian companies, as well as dividend income earned by shareholders, investors and collective investment funds. If adopted, the reduced tax rate would apply from 1 January of the year following its publication in the Official Gazette.

Companies distributing dividends and their shareholders could benefit from a lower 8% dividend tax. Businesses would need to update their dividend withholding and reporting procedures if the proposal becomes law.

A second AUR-signed legislative proposal aims to increase the turnover threshold for Romania’s microenterprise tax regime from EUR 100,000 to EUR 500,000. The measure would allow more companies to remain under the simplified microenterprise tax system instead of switching to corporate income tax. The higher threshold would also apply to groups of related companies, which would need to calculate the limit based on their combined revenues.

More businesses could remain eligible for the microenterprise tax regime, reducing their tax and compliance burden. Groups of related companies would need to monitor the new EUR 500,000 threshold based on their combined turnover.

The third and last proposal submitted by AUR in Parliament last week allows companies to repay loans received from shareholders or associates even when their net assets fall below 50% of subscribed share capital. Under the proposal, these repayments would be treated as the settlement of a debt rather than a profit distribution, removing the current restriction for companies in financial difficulty.

Companies, particularly SMEs financed through shareholder loans, could repay these loans more easily without breaching capital maintenance rules. The proposal could improve access to internal financing and make it easier for shareholders to recover funds lent to their companies.