Use of company car tax treatment, as per the Romanian tax law

The question on what is the use of company car tax treatment in Romania, and how should companies approach it in practice is a common one among employers. Especially among those who allow their employees to use the company cars not only for the purpose of performing their job, but also for personal purposes.
company car tax treatment

In such cases, the tax treatment that should be applied to the use of company cars and the related expenses is different from those in which the employees use the cars strictly for the purpose of carrying out their day-to-day jobs.

In many cases however, employers either do not know the correct tax treatment that should be applied, or the situations in practice are so diverse and specific, that the Romanian tax legislation does not cover them all, thus leaving room for interpretations.

In this article we describe the situations in which the use of company vehicles is taxed as employee benefit, and how should the Romanian tax law provisions be applied in those situations.

When is the use of company car taxed?

As a general rule established by the Romanian tax legislation in force (i.e., Law no. 227/2015 on the Tax Code), the expenses related to the use of a company car for the personal purposes of the employee are deemed taxable benefit in kind. Thus, such expenses are considered 100% taxable for the employee, as salary assimilated income.

All resources from category: Taxes

Picture of Florin Stoicescu

Florin Stoicescu

Tax & Legal consultant since 2005.

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