Taxes

Salary tax exemption for IT sector in Romania – how does it work?

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In this article we will be explaining the conditions under which a Romanian company can apply for its employees the salary tax exemption for IT sector. This is a specific salary tax exemption applicable to employees specialized in software development, and which can be implemented by Romanian companies operating in the IT field, developing and selling software as part of their business. If applied, the tax exemption can generate significant salary cost saving.

More exactly, according to the Romanian legislation that is currently in place (i.e., Order no. 1168/2017 regarding the tax exemption criteria applicable to the activities of software development), the employees of Romanian companies whose business activities include the creation of computer programs can benefit from salary income tax exemption, if both the company and the eligible employees cumulatively meet certain conditions established in the law.

The conditions that apply to the employer for benefiting from this IT sector tax exemption are not many, but of course are important to be fulfilled if the company wants to apply this tax incentive.

We describe below these conditions, and provide short explanations to each of them.

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Tax & Legal consultant since 2005.

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