Romania ranks 55th out of 189 countries for ease of paying taxes, says PwC

Romania has 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, the company announced today.

The fact that Romania is positioned in the first third of the Paying Taxes ranking for a second year in a row is a positive outcome, said Mihaela Mitroi, tax and legal services Leader withPwC Romania.

By reducing the social security contributions (CAS) in the autumn of 2014, Romania saw its 2015 tax rate (which measures the amount of taxes and contributions payable by businesses and expressed as a share of their profit) drop from 43.2 percent to 42 percent. This means that in this year’s edition Romania ranked 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,” stressed Mitroi.

Romania’s total tax rate in 2015 of 42 percent was below the Central and Eastern European’s countries’ average rate of 45 percent and close to the global average of 40.8 percent, shows PwC data.

Romania is doing even better for the time needed to comply with the tax legislation. 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, Romania is among the leading CEE countries, said PwC representatives.

In terms of the number of tax fillings and payments a company has to perform annually, Romanian companies registered a number of 14 such payments, well above a regional average of 9.5 payments but below a global one of 25.6.

Romania has made significant progress in this department in recent years – from 39 payments in the 2014 edition of Paying Taxes to 14 payments in this years’s edition mainly due to the implementation and recognition of the electronic tax filling and payment system,s aid PwC representatives. This upgrade has in turn generated a significant boost in the global ranking as well, going up from the 134^th position to the 55^th. Nevertheless, Romania’s 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,” they explained.

Simona Bazavan