Romania and Bulgaria: taxation comparison

In recent months, the Romanian tax system has undergone a significant transformation. Since the beginning of 2025, the government has introduced a series of reforms affecting pensioners, employees, and businesses, aimed at fiscal consolidation and increasing state revenue.

However, these reforms have raised serious concerns among taxpayers, particularly businesses, which now face an increasingly burdensome and complex regulatory framework. These concerns have intensified following Ilie Bologian’s statements regarding further tax increases planned for 2026.

Many Romanian companies are now considering relocating their headquarters to countries with more favorable tax regimes. In this regard, open a company in Bulgaria could be a viable solution.

Taxation in Romania: The 2025 Reforms

One of the first major changes affected the microenterprise tax regime. As of January 2025, the maximum turnover threshold to qualify for this simplified regime was drastically reduced from €500,000 to €250,000. This measure excluded many businesses from a less burdensome system, forcing them into the standard tax regime, with higher rates and stricter administrative obligations.

Additionally, dividend taxation was also revised. While the rate had been 8% until 2024, it rose to 10% as of January 2025. This significant increase impacts shareholder returns and reduces the attractiveness of investing in Romania.

Another critical point concerns VAT. Starting August 1, 2025, the standard rate will rise from 19% to 21%. Meanwhile, the reduced 11% rate will apply only to essential goods and services, such as food, medicines, books, firewood, irrigation water, and hotel services. For all other products and services, the VAT hike will directly affect living costs and company expenses.

Read also: Trademark registration in Bulgaria: process, duration, and legal protection

Romania: More Tax Hikes Coming in 2026

The Romanian tax outlook is expected to worsen in 2026. The government has announced new measures to take effect on January 1, 2026. Chief among them is a further reduction in the turnover threshold for the microenterprise regime, down to just €100,000. This will make the special regime accessible only to a very narrow segment of businesses, pushing the majority into a more burdensome tax framework.

Dividend taxation is also expected to rise again, reaching 16% in 2026—an 8% increase in just one year. Authorities are also considering a substantial increase in real estate taxation. Taxes on residential and commercial properties could double, affecting both personal wealth and business assets, especially for companies owning investment or operational real estate.

This tightening fiscal environment is pushing many businesses to rethink their organizational and tax planning strategies. The prospect of ever-increasing tax pressure is driving more entrepreneurs to explore alternative solutions within the European Union—seeking more stable, pro-business jurisdictions.

Read also: VAT Refund in Bulgaria: How It Works and What the Deadlines Are

Relocating a Business from Romania to Bulgaria: All the Benefits

Bulgaria is emerging as one of the most attractive destinations for companies seeking a favorable tax environment. Located in the eastern Balkans and sharing a border with Romania, Bulgaria is a full EU member, offering access to the single market and EU protections.

Bulgaria boasts the lowest tax burden in the EU. Its tax system is simple and transparent, with both personal and corporate income taxed at a flat 10% rate. This flat tax regime ensures legal certainty, predictability, and administrative ease for both freelancers and companies.

In terms of VAT, Bulgaria maintains a competitive structure. The standard VAT rate is 20%, but a reduced 9% rate applies to strategic sectors like tourism and hospitality. Moreover, certain transactions may be fully exempt, depending on the nature of the goods or services involved.

Another advantage is the bilateral tax treaty between Italy and Bulgaria, which prevents double taxation. This agreement ensures that income generated in one of the two countries is not taxed twice and allows mutual recognition of certain deductions and tax credits, making Bulgaria even more appealing to Italian businesses looking to internationalize.

Bulgaria also offers strategic and logistical advantages. In addition to its proximity to Romania, the country borders Serbia, North Macedonia, Greece, and Turkey, and has access to the Black Sea. This location makes it a natural hub for trade between Europe, Asia, and the Middle East, allowing businesses to reach many emerging markets quickly.

From an operational standpoint, those wishing to move to Bulgaria to conduct business can choose from various options. In this context, having reliable and competent support is crucial.

Accountancy Bulgaria is a tax consultancy firm specialized in assisting businesses and professionals who wish to relocate or open a company in Bulgaria. With a team of experts in local tax law, accounting in Bulgaria, and corporate law, Accountancy Bulgaria supports its clients throughout the entire process: from preparing the required documentation to registering with the relevant authorities and managing ongoing tax obligations.

In a time marked by legal instability and economic uncertainty across many EU countries, choosing to operate in a stable and tax-efficient jurisdiction can provide a decisive competitive edge. For those seeking to shield their business from increasing tax pressure, Bulgaria offers a concrete, sustainable, and EU-integrated alternative.