Romania: innovation incentives overview

R&D is the only available form of innovation incentive available in Romania.

As of 2026, the Romanian R&D regime includes two alternative tax incentives for eligible R&D expenses, from which taxpayers must choose one:

• 50% additional tax deduction (uplift) of eligible R&D expenses; or
• 10% R&D tax credit, deductible directly from corporate income tax/minimum turnover tax due.

Are there specific industries that qualify or are there reliefs that require a particular industry focus?

Romanian legislation in terms of R&D tax incentives can be applied irrespective of the industry in which a company operates. There is no focus on a specific sector or economic area, but on the substantive nature of R&D.

Do you have to apply for incentives prior to conducting the research or claiming the benefit?

The tax incentives are applicable on a self-assessment basis, with no prior approval required. Nevertheless, large taxpayers have the obligation to apply for a certification issued by an authorised expert.

Are there specific documentation or reporting requirements for claiming incentives?

In some instances, a certification report issued by an independent expert is required to ascertain the R&D nature of the activity for which the tax incentives are applied.

Additionally, it is necessary to prepare documentation for each project being applied for. This should include:

• a defined objective
• timeframe
• field of research and development
• sources of funding
• expected results
• innovative character of the project
• budget and resources allocated

The same substantive eligibility and documentation requirements remain relevant irrespective of whether the taxpayer applies the 50% additional deduction or the 10% tax credit.

According to the Romanian Fiscal Code, taxpayers may apply either:

(I) Option I - 50% additional tax deduction of eligible R&D expenses when determining the taxable result; or

(II) Option II - 10% tax credit, determined by applying the 10% rate to the value of eligible R&D expenses and deducted from the corporate income tax / minimum turnover tax due.

(I) Option I: 50% additional deduction

• Amount of taxable income (1) = USD 1,000,000
• Amount of general deductible expenses (2) = USD 500,000*
• Uplift of general deductible expenses (3) = 50% x (2) = USD 250,000
• Profit tax payable without claiming R&D tax incentive [(1) – (2)] x 16% = USD 80,000
• Profit tax payable claiming R&D tax incentive [(1) – (2) – (3)] x 16% = USD 40,000
• Effective benefit: USD 40,000, i.e. 8% of the eligible R&D expenses.

(II) Option II: 10% R&D tax credit

• Amount of taxable income (1) = USD 1,000,000
• Amount of general deductible expenses (2) = USD 500,000*
• Profit tax before R&D tax credit [(1) – (2)] x 16% (3) = USD 80,000
• R&D tax credit (4) = 10% x (2) = USD 50,000
• Profit tax payable after R&D tax credit [(3) – (4)] = USD 30,000
• Effective benefit: USD 50,000, i.e. 10% of the eligible R&D expenses.

* Assumption that all expenses incurred are related to the R&D activity carried out

The uplift for the tax-deductible expenses should be applied in the same fiscal year through the corporate income tax return on which the costs are recorded.

Retroactive application is possible through rectifying tax returns and the offset or refund of overpaid corporate income tax.

The R&D tax credit is determined annually by reference to the eligible R&D expenses recorded in the fiscal period for which the corporate income tax / minimum turnover tax is computed. The tax credit is deducted annually from the corporate income tax / minimum turnover tax due.

Any unused R&D tax credit may be compensated with certain tax liabilities, as provided by the law, or refunded within a special 4-year statute of limitation, starting from the first day of the fiscal year following the year for which the R&D tax credit is determined.

The R&D tax incentive is only available to corporate entities. It is also possible to apply for a corresponding tax benefit in respect of the salaries of employees involved in the R&D activities, which allows for full exemption from personal income tax. 

There are no company size and/or investment requirements.

What are the criteria that define activities that qualify as R&D, and who determines the criteria?

In general, activities which fall under the definition mandated by specific government regulations in the categories of applied research and technological development activities.

Do the R&D activities have to be performed within the country to qualify? If not, is there a distinction made between the country where the claimant company is resident, EU countries, and non-EU countries?

Qualifying R&D activities can be undertaken both in Romania and in countries from the European Economic Area.

Does the intellectual property need to reside in the country granting the incentives or in the company claiming the incentives?

There is no specific requirement in this respect. In practice, the IP can be registered inside or outside Romania, as long as the Romanian company has the right to exploit the R&D activities to generate future income.

Does the tax authority have to review the resultant developments to allow a deduction or credit?

No prior approval is required, but the tax incentives may be subject to a subsequent tax audit by the tax authorities. 

Examples include:

• depreciation
• maintenance
• wages
• consumables
• expenditure with subcontractors/externally provided workers
• operating expenditure (e.g., raw materials, parts, modules, components, processes, or services used for the R&D activities, etc.)
• overheads (e.g., water, sewage, sanitation, electricity and heating
• gas
• postal and courier services
• telecommunications/fax/internet
• transport
• warehousing

Are the incentives temporary or permanent?

Permanent.

How is the benefit obtained?

Via reduction in corporation tax. If the amount of the tax credit exceeds the corporate income tax due and cannot be fully utilized, the excess may be either offset against other tax liabilities or refunded, in accordance with the applicable legislation.

Are the incentives incremental in nature or volume-based?

Volume-based.

Are there general rules for estimating the value of the incentives?

No.

Determine what activities performed are eligible for R&D consideration.

1. Complete the documentation for each qualifying project.
2. Prepare a detailed budget with determination of qualifying expenditure.
3. Completing and submitting the documentation with the annual tax return

Is there a cap on the maximum level of benefit that can be received per year, per company, or for all the qualifying taxpayers together?

No.

Are tax credits refundable?

Yes, for the 10% R&D tax credit, to the extent the credit cannot be fully used against the annual corporate income tax/minimum turnover tax due. The unused R&D tax credit can be compensated or refunded within a 4-year statute of limitations period.

Can surplus incentives be carried back or forward and used in years other than the origination years?

For the 50% additional deduction, if the taxpayer records a tax loss, such loss is recovered in the next 5 years, limited to 70% of the taxable profit recorded in each year.

For the 10% R&D tax credit, the unused difference may be compensated or refunded within a 4-year period.

Are there any other types of limitations?

No.

Are the R&D costs deductible when deriving taxable income?

Yes, the costs are deductible when deriving taxable income. Capitalization of costs is performed based on the accounting regulations applicable, with impact also on capitalization for tax purposes.

Large taxpayers are obliged to obtain a certification report from an independent expert to confirm that the R&D activity is eligible for the tax incentive regime.