April 2025 – On 4 April 2025, Romania government Emergency Ordinance no. 21/2025 ("the GEO") was published and entered into force, introducing several important amendments and clarifications regarding the recently enacted construction tax. We summarise the main provisions below.
- Reduction of the tax rate: The construction tax rate has been decreased from 1% to 0.5%.
- Tax base clarification: It is now explicitly clarified that the 0.5% tax applies to the net book value of constructions.
- New separate tax (0.25%): A separate tax of 0.25% has been introduced for buildings belonging to the public or private domains of state or administrative-territorial units that are utilised based on contracts, agreements, or legal acts establishing rights of administration, concession, free use, or rental. This tax is payable by taxpayers utilising these buildings under the aforementioned arrangements.
- Territorial limitation: The applicability of the construction tax is limited strictly to constructions located within the territory of Romania.
- Tax exemptions: Constructions exempt from building tax are similarly exempt from the construction tax.
- Clarification on investment assessments: Investments made by taxpayers in constructions used under various contractual arrangements (such as administration, concession, rental, free use, management lease, joint ventures, etc.) will not be assessed as taxable constructions if, by the end of the fiscal year, these investments have not resulted in constructions as defined by law.
- Declaration and payment deadlines: Taxpayers with a fiscal year differing from the calendar year must calculate and declare the construction tax by the 25th day of the fifth month following their fiscal year-end. Payment is due in two installments by the end of the sixth and tenth months of the fiscal year, respectively.
- Special provisions for newly incorporated or dissolving taxpayers: Specific declaration deadlines and recalculations of the construction tax have been established for taxpayers that cease to exist or are newly incorporated during the fiscal year. In such cases, the tax obligation applies proportionately to the period of taxpayer’s existence during that year.
- Early payment incentive: A 10% incentive has been introduced for taxpayers who declare and fully pay the construction tax in advance by 25 May (the standard declaration deadline), or by the 25th day of the fifth month following the end of the fiscal year, if different from the calendar year.