The government has recently presented an extensive legislative proposal outlining the fiscal and budgetary measures set to take effect during 2025–2026. The stated goal of these changes is to ensure the sustainability of public finances by increasing revenues and improving expenditure management. Below are the most important proposed changes:

Dividends: Tax rate increases to 16% starting 2026

As of January 1, 2026, the dividend tax rate will rise from 10% to 16%, applying to both legal entities and non-residents.

An exception applies to dividends distributed from 2025 profits, based on interim financial statements — these will remain taxed at 10%.

VAT: Rate increases and changes

The standard VAT rate will increase from 19% to 21%.

The reduced 5% VAT rate will be eliminated, and the affected goods and services will be taxed at 11%.

The current 9% VAT rate will rise to 11% for a limited range of products (food, medicine, water, social services, HoReCa).

The HoReCa sector will be monitored between August 1 – October 31, 2025, to determine the applicable VAT rate thereafter.

Reduced VAT for housing – valid until August 2026

The 9% VAT rate remains in effect for residential properties with a usable area of up to 120 sqm and a value of no more than 600,000 lei (excluding VAT), provided the down payment is made before August 1, 2025.

Each individual may benefit from this reduced rate only once, if they have not purchased a home with reduced VAT after January 1, 2023.

Medical Leave Allowances: Variable Rates Based on Duration

• Up to 7 days: 55% of the calculation base;
• Between 8 and 14 days: 65%;
• Over 15 days: 75%;
• Cardiovascular diseases remain at 75%.

Additional tax for banks

An extra 4% tax on the turnover of banking institutions will be introduced starting July 1, 2025, and maintained from January 1, 2026.

Excise duties increased in two stages

Fuel (gasoline and diesel): Excise levels will be adjusted on August 1, 2025, and again on January 1, 2026. For 2026, excise duties will not be inflation-adjusted.

A compensation scheme is being developed for transport companies to offset the excise increase.

Tobacco, alcohol, and nicotine liquids: Higher excise duties starting August 1, 2025, and April 1, 2026.

Still wines and cider: Will be taxed similarly to sparkling wines — 76.19 lei/hectoliter.

Cigarettes: The specific excise will be 576.36 lei per 1,000 cigarettes between August 1, 2025, and March 31, 2026.

Gambling: Progressive Taxation Up to 40%
Gross income from gambling will be taxed as follows:

Up to 10,000 lei: 10%;

Between 10,001 and 66,750 lei: 1,000 lei + 20% of the amount exceeding 10,000 lei;

Over 66,750 lei: 12,350 lei + 40% of the amount exceeding this threshold.

For casinos, poker, slot machines, and scratch tickets, if winnings exceed 66,750 lei, the full scale applies, minus 12,350 lei.

Interest from foreign bonds: tax responsibility shifts to beneficiaries

Starting August 1, 2025, individuals earning interest from bonds issued by Romanian companies on foreign markets will be required to self-declare and pay the 10% tax themselves.

Stricter taxation of scrap metal income

Income earned by individuals from the sale of ferrous and non-ferrous metal scrap will be classified as income from other sources.
The tax will be withheld at source by the economic operators.

Health insurance contributions on pensions

Pensioners will pay health insurance contributions on the portion of their pension that exceeds 3,000 lei per month, for each pension entitlement.

Income tax will be calculated after this contribution is deducted.

Conclusion
The announced changes represent one of the most extensive tax reforms in recent years. They will have a significant impact on the economic environment, on companies and inevitably, on citizens. The increase in taxes and the reduction of tax benefits are measures through which the state seeks to ensure long-term budgetary balance.

Should you require tax simulations to better understand the impact of these changes, we remain at your disposal for support and further clarification.