Romania is now featuring one of Europe’s lowest tax environment

A new Romanian government has been appointed by the newly elected parliament on 28th December 2004. The government is lead by one of the former opposition leaders, Mr. Calin Popescu Tariceanu, after Mr. Traian Basescu, leader of the Alliance Justice & Truth (Right/Liberal coalition) has won the presidential race. (pictures here here).

One of the new measures taken by the new government, who’s main policy favors lower taxes in order to support the boom of the small-medium sized companies before Romania’s EU accession, was to introduce (text here) an unique tax of 16% for employees’ wages and for the profit of commercial companies. The normative act will enter into force starting with January the 1st 2005.

This measure will also be useful to the Romanian IT outsourcing industry, as foreign companies start local activities in Romania, now one of Europe’s lowest tax environment & lowest among Eastern European countries. Important to note is also that a recent law change, (text here, Ro only) easing the legal procedures to allow a company to be started in Romania in just 78 hours (3 days).