The New Eastern Europe

The Romanian govermnent has approved the reduction of the tax rate on dividends from 16% to 5%. For three years foreign investors who were not previously affiliated with the local market and invest more than the equivalent of 3,000 EUR will be exempt from tax. The Romanian governent also reduced the VAT rate to water for drinking and for irrigation to 9%. New regulations are also changing the classification of small enterprises. Now all companies, whose income does not exceed 100.000 EUR (previous limit was 65.000 EUR) are classified as small enterprises. CIT on small businesses, which employ at least two employees will be 1%, 2% for micro-enterprises who have one employee and 3% for micro-enterprises which have no employees. Currently tax for all small companies is 3%. The new regulations will come into force from 1 January 2016. Experts estimate that reducing the tax on dividends will make a very positive impact on the growth of investments in the country.Tags: , ,

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