Several positive changes were made to Romania’s fiscal legislation in 2020, including the following:

  • A tax allowance was implemented for companies that pay their corporate income tax/ microenterprise tax due by the deadline, for the first three quarters of 2020.
  • Tax benefits were granted in relation to the annual building tax, to taxpayers that were required to interrupt their business activity during the state of emergency period/ landlords that reduced rents by at least 50% during the state of emergency period.
  • A law was passed allowing the postponement, on request, of the payment of rent for the use of real estate registered as offices, places of business or dwellings, without the possibility to impose interest and penalties.
  • Interest and penalties on overdue tax were suspended and were not applied to payments due between 21 March 2020 and 25 December 2020.
  • The authorities issued amendments aiming to align national legislation with the European rules applicable since 1 January 2020 for intra-community transactions with goods, to correlate the VAT rules for exports with customs provisions, as well as implementing certain European Court of Justice (CJEU) rulings on VAT exemptions.
  • Ancillary payment liabilities that were imposed for the period before March 2020 were cancelled under certain conditions.
  • A tax credit was granted to taxpayers that acquired new electronic cash registers. The tax credit can be obtained for any acquisitions made from 2018 onwards.
  • Fiscal measures were implemented to maintain and stimulate the level of equity in Romanian companies.
  • New provisions on payment facilitation (payment rescheduling) were implemented for budgetary obligations due from the date of the declaration of the state of emergency (16 March  2020), administered by the central fiscal authorities.
  • Exemption from the specific HoReCa tax was granted up to 31 December 2020.
  • Directive 2017/952 on hybrid tax mismatches that occur in cross-border transactions was transposed into Romanian tax legislation on 31 January 2020.
  • DAC 6 was implemented into Romanian tax legislation on 31 January 2020 (the implementation of Directive 2018/822 on the mandatory and automatic disclosure of tax information with regard to cross-border arrangements, which are subject to reporting).

Furthermore, legislation was passed which took effect on 1 August 2020 granting taxpayers paying corporate income tax, microenterprise tax, specific tax or income tax a tax credit for the acquisition cost of electronic cash registers purchased and put into operation. This legislation had retroactive effect, and applies also for electronic cash registers purchased and put into operation during 2018, 2019 and 2020 before the entry into force of this law. For all periods, the tax credit may be obtained for the 2020 year-end calculation and if the tax due is not sufficient to cover the value of the cash registers acquired, the outstanding amounts may be carried forward to be recovered in future periods, for up to 7 years.

New legislation has been passed to stimulate the maintenance/ increase of equity of Romanian companies. The new provisions state that taxpayers paying corporate income tax, regardless of the declaration and payment system, taxpayers paying microenterprise tax, as well as taxpayers which pay specific tax, may benefit from reductions of the corporate income tax / microenterprise tax / specific tax 

A simplified procedure has been published, for granting payment rescheduling for a period of no more than 12 months, without the need to provide guarantees, for main and ancillary tax obligations whose maturity/term of payment fell after the date of the declaration of the state of emergency (16 March 2020).


The legislative consultation process and the interpretation of fiscal topics

Consultation between the state authorities and the business community is essential to review both draft legislation and the implementation of existing legislation. This enhances the quality of legislation and supports its uniform application. There is still a continuing problem of legislation being passed quickly, often at very short notice, and with little time for the business community to have effective input. Although the Ministry of Finance has several structures designed to enable consultation with private stakeholders on different areas of interest in relation to public policies (e.g. the Directorate for Public Policy and Monitoring Legal Acts and the Unit for Communication, Public Relations, Mass-Media and Transparency), in practice there is hardly any real process of consultation with the business environment on these issues. Furthermore, tax inspectors’ interpretations of legislation change frequently and new interpretations are also applied to the past. This means that, in practice, the rules can change unpredictably and dramatically.


Moreover, instead of focusing on solving essential problems related to collection, such as fighting fiscal evasion in connection with VAT and excise duties in sensitive sectors (e.g. tobacco, alcohol, and grain), as well as combatting undeclared work, the tax authorities often carry out quite aggressive fiscal inspections on taxpayers which are some of the most important contributors to the state budget. These inspections can often last for long periods, disrupting business and ultimately hampering the ability of these businesses to generate revenue.

In practice there are still cases, although fewer than in the past, when conflicts of interpretation on fiscal topics generated by legislative inaccuracies lead to the unnecessary instigation of criminal proceedings. In most situations, the instigation of criminal proceedings is a disproportionate measure in relation to the amounts involved. The criminal law blocks the settlement of fiscal issues, and the time taken to settle criminal cases is excessively long. The experience of Romanian courts with these issues is limited, and this leads to a lack of predictability in the application of criminal law and in settlement decisions. All this, combined with the precautionary measures (seizures and garnishments) inevitably generates major economic losses for taxpayers that can even lead to insolvency, cessation of business and bankruptcy.


All this, combined with the precautionary measures (seizures and garnishments) inevitably generates major economic losses for taxpayers that can even lead to insolvency, cessation of business and bankruptcy.

The instigation of criminal proceedings has a serious impact on an investor’s reputation and has particularly severe consequences in relations to business partners (associates involved in the implementation of major joint investments, clients, suppliers, financiers, employees, management as well as shareholders of listed companies).

The fiscal authorities often focus aggressively on companies that are large contributors to the budget. This creates a risk of seriously undermining Romania’s image in the international business environment, the media and diplomatic circles, as well as with EU authorities.


If this problem continues, the immediate consequence will be a likely fall in foreign investment in Romania, while existing investors can be expected to reduce their presence, revise their expansion strategy, or even leave Romania altogether in search of a more mature and predictable environment. This would have a significant impact on Romania’s development and the country would become considerably less competitive on the global market to attract and maintain foreign investment.


On the other hand, in order to help taxpayers get through the problems caused by the COVID-19 pandemic, the tax authorities have implemented certain favourable tax measures such as (i) Granting tax benefits for annual income tax, social insurance contributions and health insurance contributions due by individuals; (ii) Extending the deadline for submitting the Single Declaration for income tax and social contributions due by individuals, the deadline for submitting Form 230, as well as the deadline for payment of the income tax and mandatory social contributions due by individuals until 30 June 2020 (inclusive); (iii) Introduction of certain tax facilities for the stimulus packages/bonuses granted by employers during the state of emergency period to employees whose activity involves direct contact with the public and who are at risk of infection with covid (iv) Granting tax benefits in relation to the annual building tax and the monthly building tax; (v) Cancellation of certain ancillary liabilities (vi) Deferral of tax payments. Furthermore, the authorities have extended certain social protection measures and have issued norms for the regulation of the right to stay in Romania for foreign individuals, starting from 15 May 2020, in the context of the pandemic. All these measures, which aim to support businesses in the current difficult context, are welcome. 



Clarity, stability and predictability in fiscal legislation as well as in its implementation and interpretation are critical conditions in investment decisions. Any change in legislation, including its interpretation, should be adopted after consultation and duly applied by the tax authorities only for the future and not retrospectively.
The FIC recommends a more regular and consistent dialogue with MFP and ANAF representatives on the predictability of the law and its uniform application. The Ministry should consider setting up a specific structure (Unit/Office) to organize specialised consultation/dialogue with the business environment, on the preparation/revision of all legislation. This structure should act as a central hub between the experts in the Ministry and the general public, assume the role of contact point and design transparent procedures for bi-directional interaction with external stakeholders. 

The FIC also urges the MFP to give the business community more time to review draft legislation, so that companies have enough time to understand and comply with their tax obligations. The FIC also recommends the application of the In dubio contra fiscum principle, based on which each time a legal provision is unclear, it should be interpreted in favour of the taxpayer.

Transparency and predictability

The FIC considers that improving transparency should represent a top priority for the authorities, as this will lead to an increase in predictability of the Romanian tax environment and is also very likely to enhance trust among current and future investors. A non-transparent legislative process seriously compromises the potential for economic development, mainly because it acts as a deterrent to the attraction of foreign direct investment. A consistent and coherent interpretation of legal provisions, aimed inter-alia at eliminating situations where different views have been expressed, concerning sometimes controversial retroactive application of certain legal provisions, would greatly contribute to improving transparency. 


Tax rulings and Advance Pricing Agreements (SFIAs and APAs) are binding. Consequently, their purpose is to facilitate cooperation between the tax authorities and companies by eliminating uncertainty. SFIAs and APAs apply to future transactions and, in this context, the legal deadlines for issuing these documents are extremely relevant. Even though these deadlines are in some cases already unsatisfactory for the taxpayer (given the urgency of the transactions), they are also frequently delayed due to internal consultations with the MPF before a tax ruling is issued. 


During tax inspections, the tax authorities issue a draft report and present it to the taxpayer in the final discussion, which marks the closing of the tax inspection. Taxpayers are then allowed 5 working days (or 7 working days, if they are large taxpayers) to file their comments on the conclusions of the tax inspection. Afterwards, the tax authorities issue their final report which also contains their position on the comments filed by the taxpayer. By presenting taxpayers’ comments after the closing of the tax inspection, this process becomes a mere formality which rarely triggers any changes in the tax inspector’s conclusions. Consequently, from a practical point of view, it does not represent an effective mechanism for ensuring the taxpayer’s right to defend their position.
During the administrative process, while the relevant fiscal authority is handling appeals, the taxpayer is not informed about the conclusions which have been reached, but simply receives the tax authorities’ final decision, without having the opportunity to express an opinion.



Creation of a database with non-binding and binding rulings

The FIC recommends the setting up of a (paid access) database tool (with full respect for the confidentiality principle), bringing together all binding and non-binding tax rulings issued/to be issued by the MFP, in its capacity as legislative issuing authority, in connection with the interpretation of each article of the Fiscal Code, the Fiscal Procedural Code, the Accounting Law and any related secondary legislation, in order to normalise and create a unitary approach to the interpretation of the relevant legal provisions by both tax inspectors and taxpayers throughout Romania.

To help businesses develop their long-term strategies and to increase transparency, building on open governance principles, the Ministry Finance and ANAF should design and make publicly available an aggregated database/dashboard containing financial/fiscal indicators, with monthly and annual values, detailed at NACE 4 digits level (e.g. monthly revenues for each type of tax in the Fiscal Registry, detailed by type of tax and by a NACE 4-digit code).

Improvement in the process of issuing Anticipated Individual Fiscal Solution (SFIAs), Advance Pricing Agreements (APAs) and non-binding opinions

The FIC proposes that even if a reduction in the existing timeframes is not possible, at least measures should be taken to ensure that SFIAs/APAs and non-binding letters are issued within these legally and clearly stipulated time limits and are not delayed. In addition, provided that the consultation process with the MFP before the issuance of an SFIA is upheld, integration of tax ruling practice within the MFP could be a solution to streamline the consultation process.

The FIC also recommends the implementation of a “silent acceptance” mechanism based on which these documents (i.e. APAs and AFIAs) are accepted ex officio if the legally stipulated deadlines are not respected by the tax authorities and no communication is sent to the taxpayer. 

Increased relevance and impact of the final discussion during tax inspections

The findings of tax inspections should be presented to taxpayers before the final discussion. Taxpayers should then be allowed to prepare their arguments before the closing of the tax inspection and present them to the tax authorities during the final discussion. The authorities should then assume responsibility in issuing a final inspection report that takes into account legal observations brought by the taxpayer.

We also recommend greater transparency in the process of handling appeals, and the creation of a legal framework which will give the taxpayer the right to be informed as to the tax authorities' conclusions by receiving a draft decision before the final document is issued. A reasonable period should then be allowed for the taxpayer to express an opinion on this draft. 

National Jurisprudence and tax courts

Practice has shown that tax inspection reports and assessment decisions issued upon the closure of tax audits are frequently cancelled later in courts, following appeals filed by taxpayers. In these situations, ANAF has had to assume a series of costs, not only in the form of compensatory damages paid to taxpayers, but also in terms of time and resources allocated to litigation which they lose. 

A consolidated database with traceability features for each case at the different courts in Romania, bringing together the tax decisions and rulings issued by Romanian courts, would bring two main benefits: 1. It would lead to an improvement in ANAF’s resource allocation process and a better assessment of costs vs. opportunities and 2. It would assist unitary application of legislation in Romanian courts, in proceedings judging the same underlying principle.



The FIC recommends the creation, in partnership with the Ministry of Justice, of a database of existing national jurisprudence on tax issues, allowing traceability of legal actions from one court to another.

The FIC also recommends the creation of specialised sections in the Romanian courts focused only on tax matters. To assist this process, the FIC recommends specific professional training for judges, with the help and the participation of the institutions required to ensure the institutional framework for the training of judges i.e. the Supreme Council of Magistrates (CSM) and the National Institute of Magistrates (INM).

Combatting tax evasion

Tax evasion creates unfair competition, putting those who comply with the law at a disadvantage. The FIC welcomes and supports the Ministry of Finance's and ANAF’s ongoing work to tackle tax evasion and tax fraud, smuggling and counterfeiting.  However, tax audits are not always focused in the right way to enhance revenue collection for the state budget.  Tax evasion and smuggling, affecting both direct and indirect taxes, continues to be a problem.




Penalties for tax evasion should be increased and a list of taxpayers with arrears should be made public.

Revision of the definition of smuggling, based on quantity criteria, should be considered.

Cooperation between manufacturers and law enforcement agencies should be enhanced. This would provide additional resources and expertise to government agencies to fight smuggling and tax evasion.

Reform of ANAF should continue, to eliminate the practical deficiencies in fiscal administration, as well as to create an integrated public IT system connecting different authorities (such as fiscal, health, local administration, courts, and the land registry).

While the need to increase budget revenue and fight tax evasion is fully appreciated by the business community, the FIC recommends a prudent and rational approach as regards future actions to be taken. Consequently, the focus of tackling tax evasion should be on targeting high-risk industries and taxpayers based on a prior thorough analysis, rather than placing an additional burden on trustworthy taxpayers which can slow down or even stop their business activities, which in turn generate budget revenue. Aggressive practices can only distort cooperation between the business environment and the tax authorities and have the potential to lower the level of trust taxpayers have in the authorities.

Intensified efforts to clamp down on the subterranean economy are a more effective way to increase budget revenue than aggressive targeting of honest taxpayers for auditing, and could also create the potential for a reduction of certain taxes and contributions.

Voluntary disclosure

The “voluntary disclosure” concept is a practical solution to increase voluntary compliance. This concept, combined effectively with increased penalties for tax evasion and lower interest for those that comply, could bring significant medium and long term benefits by increasing budget revenue without the need for additional measures.



The FIC recommends a proactive and consistent approach to increasing voluntary disclosure. This approach should include higher penalties for taxpayers which do not comply with their tax obligations, and incentives for taxpayers which regularly fulfil their obligations on a timely basis.

Experience shows that this type of positive stimulation leads to good results – for example, in the case of local taxes, the reduction granted if payment is made in advance brings benefits every year.  However, the FIC recommends a careful analysis of the sensitive balance between incentivising taxpayers and increasing penalties.

Tax refunds

Refund requests are frequently refused for spurious, bureaucratic reasons. This causes severe hardship to businesses and can even lead to bankruptcy, which ultimately has a negative effect on budget revenue too.

Currently, interest on late tax refunds is only granted to taxpayers under certain conditions and applications are often ignored by the tax authorities, forcing the taxpayer to litigate to recover the interest.

Given so, the Government Emergency Ordinance no. 226/2020 is a welcome development. This states that VAT amounts requested for reimbursement based on the VAT returns submitted by taxpayers should be refunded without a prior VAT audit. This measure has been extended until 31 March 2021.



The tax authorities and/or the Government should take the necessary measures to extend the current legal deadline for the settling of VAT refunds with subsequent rather than prior inspection. Moreover, swift refunds should be ensured for companies and individuals which are eligible, without  unnecessary bureaucratic obstacles or delays. 

If delays do occur, the tax authorities should be required to pay interest automatically based on the tax record of every company at the time the refund is made, provided that legal requirements are met.

Corporate tax consolidation and VAT groups

Law no. 296/2020 provides for the possibility of corporate income tax consolidation under certain conditions.


This was a long-expected amendment to create a true and authentic holding regime, which will attract groups of companies to Romania.    

The VAT group concept is implemented differently in Romania than in other EU member states. Thus, the benefit of forming such a group is the consolidation of the VAT position (i.e. the off-set of any payable VAT with refundable VAT owed to members of the group).  In addition, supplies of goods and services performed between the members of the group are subject to the normal VAT regime, regardless of whether they are made to third parties or to other members of the VAT group.




Although corporate income tax consolidation is welcome, certain eligibility criteria set out in the legislation severely limit the possibility to apply it.

For example, the law provides that companies which are both corporate income tax payers and specific tax payers cannot apply for the consolidation. The FIC recommends that the corporate income tax consolidation should also apply for these cases, as a significant number of companies which are mainly corporate income tax payers also pay specific tax and, thus, do not qualify for the corporate income tax consolidation regime.

VAT global representative

Until 2021, foreign companies which used Romania as an entry point to the EU for goods imported from outside the EU were required to register for VAT purposes in Romania and declare the transactions carried out.

In practice, this measure has proven to be one of the main reasons why foreign companies have been reluctant to route their imports through Romania and has led many to use other EU countries instead (e.g. Germany, the Netherlands, Belgium).


Consequently, the FIC welcomes Law no. 296 of 21 December 2020, which amended the Fiscal Code to include the concept of VAT global representative. The law states that taxable persons not registered for VAT purposes in Romania, which import into Romania goods that have been transported from a third territory or a third country, may designate an authorised tax representative to fulfil the Romanian VAT obligations.



The implementation of these measures could provide a valuable boost to the local economy, especially in Constanta, bringing particular benefits for Romanian transport/logistics companies.

Tax treatment of operations carried out within the Black Sea exclusive economic area

The tax treatment of offshore operations (i.e. drilling, construction and the operation of maritime installations, transportation of offshore goods, etc.) remains unclear two years after the Offshore Law (Law 256/2018), which enacted a new fiscal regime for upstream oil and gas, entered into force. This law did not remove the uncertainty for investors, and even added a number of barriers. In 2020, the Romanian authorities launched a public debate on draft legislation to radically amend the Offshore Law. The proposed amendments are set to cut many of the tax barriers introduced in the law, which prompted big companies to stop investments, but they have not yet been approved.

Further limitations on the activity of gas suppliers were introduced under Law No. 155/2020, which introduces a 90% tax on the difference between the actual purchase price and the price imposed prior to market liberalisation, as a regulated price. This “windfall tax”, to be applied until 30 June 2021, generates major blockages in the activity of gas supply companies.


Amid numerous discussions which have taken place over several years about the new taxation regime applicable to supplementary income generated from gas exploitation and trading, major offshore drilling projects have been halted.

Considering the high maturity of upstream in Romania, significant long-term investments are required to increase recovery factors from existing fields and to develop new onshore and offshore resources. These investments require a coherent and predictable system of laws, policies and regulations allowing investors to undertake rigorous and efficient planning of investment programmes. The stability of taxes and royalties is essential to ensure investors’ trust, in order to encourage them to invest in Romania.



The FIC recommends the clarification of the tax regime for natural gas extracted from the Black Sea, following a thorough and transparent consultation process, with participation by investors and other relevant stakeholders. The development of a competitive and stable legislative framework would enable Romania to capitalise on the substantial potential of its natural resources in the next few decades, bringing significant benefits to the economy. In order to achieve these long term objectives, it is paramount to have a transparent, predictable and internationally competitive regulatory environment.

The FIC recommends the implementation of a fiscal framework based on stability, predictability, neutrality, flexibility and competitiveness to attract investments.

Reinvested profit

Reinvestment of profit helps a business to grow, boosting economic development and hence enhancing budget revenue. Consequently, many countries offer tax incentives to companies which reinvest their profit. The current mechanism for implementing the reinvested profit incentive in Romania only relates to specific assets (i.e. assets falling within subgroup 2.1. and class 2.2.9 of the Catalogue of the Classification and Normal Functioning Lifespan of Fixed Assets). This provision discriminates between various types of investors.



The FIC continues to recommend extending the list of assets falling under this incentive. One of the most valuable extensions could be to include investments in new vehicles (i.e. class 2.3.2 of the Catalogue of the Classification and Normal Functioning Lifespan of Fixed Assets), thus stimulating taxpayers to renew the existing car fleets.

Furthermore, in order to make the incentive more effective, the FIC recommends implementing a carrying forward system, which would allow taxpayers to apply the tax incentive at a later stage, if during the current period the required conditions are not fulfilled.

Moreover, certain taxpayers do not apply for this incentive because they are required to keep a reserve related to this facility for an undefined period. If the reserve is used in any way, it is taxed. The FIC recommends that a minimum period should be set, during which the reserve must be kept (i.e., the useful life of the asset) and that afterwards it should be possible for the reserve to be used without taxation.

R&D tax facility

R&D activities represent a key element in any economy, and the benefits derived from these activities are endless. Thus, R&D should be encouraged by the Government, through the provision of  incentives for companies that carry out this type of activity. A viable system to stimulate R&D activities is essential to attract the activities that bring significant economic benefits to Romania.

Currently, the Romanian Fiscal Code offers an R&D incentive; a 50% additional deduction right for the costs incurred for these activities. Moreover, employees carrying out R&D activities are exempt from income tax. In addition, a tax holiday period of 10 years may be granted to companies solely engaged in R&D activities.



The FIC welcomes these incentives for R&D activities. However, even though they have been available for several years, many companies are reluctant to apply for them, principally because the legislation is not clear and so taxpayers have no certainty that they are compliant with the conditions. Thus, clarification of the legislation is needed, to provide a framework for the application of the incentives.

For the incentive to function effectively, it is essential for the Registry of Experts for R&D activities (whose role is to validate the eligibility of the activities carried out) to operate transparently. The  following steps should be taken:

  • The methodology for the selection of experts based on the industry of the taxpayer should be clarified.
  • The list of the experts should be supplemented to cover all areas of activity of taxpayers. (There is currently no IT expert).
  • Taxpayers should have the opportunity to challenge opinions issued by experts and the tax holiday period for taxpayers that carry-out solely R&D activities should be effectively applied.

Continued development of private pension funds

The mandatory private pension system (2nd Pillar), currently covering some 7.5 million participant members, must be protected by maintaining legal stability and predictability.

The voluntary private pension system (3rd Pillar), managing the savings of more than 500,000 participants, should be consolidated by gradually increasing tax incentives to facilitate taking up of these funds by more categories of worker. More significant tax incentives have already been implemented in neighbouring Member States to encourage private retirement savings and, by implication, the reduction of pressure on the public pension budget on a long-term basis.



The FIC recommends the increase of the contribution rate directed to mandatory private pension funds (2nd Pillar) from the current 3.75% to the statutory rate of 6%, as set out initially in Law No. 411/2004, as soon as possible, as well as an increase in the fiscal deductibility applicable to employers’ contributions to voluntary pension funds (3rd Pillar) from the current 400 euros per year to 1,000 euros per year.

Social security contributions cap

Government Emergency Ordinance no 3/2017 repealed the provisions set out in 2015 in the Fiscal Code (Law no 227/2015) on the thresholds applicable for the calculation of employers’ and employees’ social insurance and health insurance contributions. Under the 2015 Fiscal Code, in order to stimulate the employment of highly skilled professionals in Romania and eliminate discrepancies in taxation of employees compared to independent work, the calculation base for employees’ social insurance and health insurance contributions was capped at 5 times the gross average monthly salary (5x2,681 lei during 2016). The employers’ social insurance contribution calculation base was capped at 5 times the average gross salary income, multiplied by the number of insured employees, and the health insurance contribution calculation base was capped at the level of the amount on which the individual health insurance contribution was due.


These maximum limits were eliminated from February 2017, when employers’ and employees’ social insurance and health insurance contributions became payable on the entire gross salary income earned by employees. These provisions were also maintained after the shift of the social security contributions from the employer to the employee under Government Emergency Ordinance no 79/2017 applicable from 1 January 2018. The result is that there is currently a very high (uncapped) social security cost for employers hiring highly skilled professionals.



Although the reintroduction of the cap on employers’ and employees’ social insurance and health contributions would be an approach in line with practice in most EU countries, which place a cap on social contributions, and would also encourage employment of skilled professionals in Romania, the FIC highlights the need for predictability and fiscal stability and the involvement of the business environment in future decisions that could bring changes in the way social security contributions are calculated.

Excise duty

Under fiscal legislation, excise duties are increased by the inflation rate, on 1 January every year, except for excises for cigarettes which are increased on 1 April each year, according to a timetable, set out in an appendix to the Fiscal Code. Currently, the third timetable for the increase in excise duties on cigarettes is in place (2017-2022), which, when it was adopted, provided gradual increases of 9-10 lei/ year.

Nevertheless, the timetable for 2017-2022 has already been amended three times; in 2018 (EO 114/2018), 2019 (EO 89/2019) and in November 2020 (Law 296/2020) with sharp increases of up to 42 lei (from January 2021 vs. January 2020), far more than the initial envisaged increases of 9-10 lei per year. These amendments have been made to comply with the European requirement of excise duty representing 60% of the weighted average price of cigarettes (WAP), as provided by Directive 2011/64/EU on the structure and rates of excise duty applied to manufactured tobacco. 


Directive 2011/64/EU states that the minimum level of the total excise duty should be 90 euro/1,000 cigarettes and excise incidence 60% of WAP. (This requirement is not applicable if the excise duty level is 115 euros/1,000 cigarettes or above). As from April 2021, the level of excise duty on cigarettes of 563.97 lei is equivalent to 115 euros (the Directive’s second requirement), so the 60% excise incidence will no longer be mandatory. Nonetheless, the timetable ends in 2022 and no predictable framework has yet been set for the next few years.



A new 5 year timetable for excise duties on tobacco products (2022-2027) should be discussed as soon as possible and adopted in 2021, following models of the previous three timetables, and providing smooth gradual increases, thus  ensuring stability, predictability and an increase in market value, both for the sector and for budget revenues.

The minimum excise duty for cigarettes should be adjusted to the reality of the Romanian market, to maximise revenue from cigarette excise duties for the state budget.