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News from Members Romania Ranked 55th in PwC’s Paying Taxes 2016 Global Ranking

Romania Ranked 55th in PwC’s Paying Taxes 2016 Global Ranking

by PwC November 24, 2015

Romania ranked 55th in PwC’s Paying Taxes 2016 global ranking, which measures the ease of paying taxes for a standard company across 189 economies all over the world.

„Romania’s position in the first third of the Paying Taxes ranking for a second year in a row is a positive outcome. By reducing the social security contributions (CAS) in the autumn of 2014, Romania has managed to decrease last year’s Total Tax Rate from 43.2% to 42%. Therefore, this year’s edition ranks Romania above countries like Bulgaria (88), the Czech Republic (122), the Slovak Republic (73), Poland (58) and Hungary (95), but still below Croatia (38), Slovenia (35) and the Baltic states (Estonia being ranked 30th, the Republic of Latvia 27th and Lithuania 49th). This reinforces the necessity of maintaining a sustained rhythm of reforms, for which the coming into force of the new Tax Code will be of significant service,” stated Mihaela Mitroi, Tax and Legal Services Leader, PwC Romania.

In this year’s edition, Romania’s Total Tax Rate, which measures the amount of taxes and contributions payable by businesses and expressed as a share of their profit, was 42%, below CEE countries’ average rate (45%) and close to the global average of 40.8%.

Regarding the time needed to comply with the tax legislation, Romania is among the leading CEE countries, with an average company spending 159 working hours a year for tax compliance, compared to a regional average of 218 hours and to a global average of 261 hours.

The next sub-indicator used for the evaluation is the number of tax fillings and payments a company has to perform annually, where Romanian companies registered a number of 14 such payments, compared to a regional average of 9.5 payments and a global one of 25.6.

Even if Romania has made significant progess in this department along the recent years (from 39 payments in the 2014 edition of Paying Taxes to 14 payments in this years’s edition, an upgrade which generated a significant boost in the global ranking as well, going up from the 134th position to the 55th) mainly due to the implementation and recognition of the electronic tax filling and payment system, our number is still higher than the CEE countries average. The reason for this gap is that, along with the payments of standard central taxes, companies also have to make payments to the local budgets.

About the Paying Taxes 2016 report:
Paying Taxes 2016 measures all mandatory taxes and contributions that a medium-size company must pay in a given year. Taxes and contributions measured include the profit or corporate income tax, social contributions and labour taxes paid by the employer, property taxes, property transfer taxes, dividend tax, capital gains tax, financial transactions tax, waste collection taxes, vehicle and road taxes, and other small taxes or fees.

The Paying Taxes report evaluates the ease of tax payment for 189 economies all over the world by focusing on three sub-indicators: the Total Tax Rate, which measures the amount of tax and contributions payable by businesses as shares of their profits; the amount of time needed to comply with the tax legislation, namely the number of hours spent by businesses in order to complete the requirements of tax filing and payments; and the number of payments a company needs to make in order to fulfil its tax obligations. Last year, Romania ranked 52.

About PwC:

PwC firms help organisations and individuals create the value they’re looking for. We’re a network of firms in 157 countries with more than 208,000 people who are committed to delivering quality in assurance, tax and advisory services. Find out more and tell us what matters to you by visiting us at www.pwc.com.
PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details.

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