KPMG: VAT rate in Romania, one of the highest at a global level

The general VAT rate in Romania is one of the highest at global level and will remain in the first fifth of the global ranking even after the reduction from January 1 when it will go down to 20%, according to a KPMG study. With its current VAT rate of 24%, Romania is among the top ten countries with the highest VAT rates. Hungary ranks first with a VAT rate of 27%. At the opposite end, the 16% flat tax on corporate profits and individual income places Romania among countries with the lowest level of taxation. The personal income tax in Romania is less than half of the EU average, which stands at 37.9%, but many countries apply progressive tax rates. In terms of social security, the contributions paid by employers in Romania (23.45%) are similar to the EU average while contributions paid by employees (16.5%) are among the highest in Europe. editor@romania-insider.com