The car, the phone, the laptop, the desk in the living room, dinner with a client, the family “team-building” holiday. The question “can I put this through the company” is, in fact, three questions: is it deductible, is the VAT deductible, and is it somehow income of yours. The answers differ from one item to another, and for a microîntreprindere (the reduced-rate company regime) the first question does not even matter.
A company expense is assessed on three levels. Deductibility for corporate income tax purposes, under Article 25 of the Tax Code: expenditure incurred for the purpose of carrying on the economic activity is deductible, with limited deductibility for the categories under paragraph (3) and non-deductibility for those under paragraph (4). VAT deduction, under its own rules, with the 50% cap for vehicles under Article 298. And classification as a benefit in kind for the person who benefits, under Article 76(3), with the exceptions under paragraph (4).
The three levels are independent. An expense can be non-deductible and still have no consequences for the member, or deductible at company level and at the same time taxable income for the beneficiary. For a microîntreprindere, the first level disappears, because the 1% tax applies to revenue regardless of expenses, but the other two remain in force.
For road vehicles under 3,500 kg with no more than nine seats, not used exclusively for the activity, expenses are 50% deductible under Article 25(3)(l), and VAT is deducted at 50% under Article 298. The regime applies without logbooks. Exclusive use, with logbooks, gives 100%, and the categories expressly listed, such as sales agents, courier services, or taxi services, have 100% by right.
Business entertainment expenses are deductible up to 2% of accounting profit plus corporate income tax and the business entertainment expenses themselves, under Article 25(3)(a). The calculation base makes the limit small for low profits and non-existent for a loss.
Social expenses are deductible up to 5% of staff salary costs, under Article 25(3)(b). Gifts for children, allowances, and staff events fall under this heading, each with its own tax-free ceiling for the beneficiary.
Corporate income tax, fines and penalties owed to authorities, expenses without supporting documents, and expenses incurred for the benefit of members or shareholders, unrelated to the activity, under Article 25(4). The last category is the one that matters for this analysis.
The laptop, the phone, office furniture, equipment, software subscriptions: fully deductible, with VAT fully deductible too, if purchased by the company and used in the activity. Occasional personal use of a work phone changes nothing. A second phone, for a family member, is either a benefit in kind or an expense for the benefit of the member, depending on who receives it.
The car: the 50% regime on both fronts, with no taxable benefit for personal use, under Article 76(4)(ț), provided it is owned or used by the company. It is the only asset for which the law expressly accepts the mix of personal and professional use and prices it on a flat-rate basis. A second car, for a spouse, no longer falls under this logic.
The home office: deductible in proportion to the floor area allocated, if the registered office or a secondary office is declared there and there is a loan-for-use or lease agreement with the company. Utilities follow the same proportion. Renovating the entire home at the company’s expense is not renovating an office.
Meals and gifts: business entertainment, up to the 2% limit, when linked to business relationships. Dinner with the family does not become business entertainment just because the invoice is issued to the company. Travel: deductible when the purpose is business, with the per diem within the tax-free ceiling for the beneficiary; a holiday with a stopover at a client’s premises is, for the most part, a holiday.
Medical services, sport, insurance: each has its own tax-free ceiling for the employee and deductibility ceiling for the company, checked category by category. For the member who is not also an employee or a paid director, most of these are expenses for the benefit of the member, non-deductible and, if needed, open to reclassification.
For a microîntreprindere, the 1% tax applies to revenue. Expenses reduce nothing, which leads many directors to believe that, tax-wise, they can buy anything through the company without consequences. That is true for the first level and false for the other two.
VAT keeps its own rules, if the company is VAT-registered: the deduction for goods unrelated to the activity is rejected, and the one for vehicles is capped at 50%. The benefit in kind remains income of the beneficiary, taxable as salary for the paid director or the employee. And expenses for the benefit of the member, without basis, become exactly what they are: sums taken out of the company without a distribution resolution, that is, disguised dividends, a loan to the member, or, in serious cases, something else.
For a microîntreprindere, the deductibility test is replaced by the beneficiary test: who uses the asset and under what title. If the answer is the member, for personal interest, without documentation, the expense is not “free” just because it does not reduce the 1% tax.
The test under Article 25(1). If the asset or service serves the economic activity, the expense is deductible for corporate income tax purposes, in full or subject to a limit, depending on the category. If it serves the individual, it is not.
A separate rule. Goods unrelated to the activity give no right of deduction; mixed-use vehicles give 50%; business entertainment above the limit loses the deduction. A VAT-registered microîntreprindere answers this question the same way as a company on corporate income tax.
The employee or the paid director: a benefit in kind, taxable as salary, subject to the statutory exceptions. The unpaid member: an expense for his benefit, non-deductible, with the risk of reclassification. No identifiable beneficiary: an expense without documentation, non-deductible.
An invoice issued to the company, a loan-for-use agreement for personal assets used by the company, logbooks if 100% is sought for a vehicle, internal regulations for benefits granted to employees. An expense without documentation is non-deductible regardless of purpose.
Benefits in kind granted to employees and directors are quantified monthly and included in the salary tax base, subject to the statutory exceptions. Failure to include them is the most frequent finding at inspection on this heading.
The member’s personal expenses, if they have gone through the company, must be regularised: either reimbursed to the company, or distributed as dividends with the related tax, or documented as a loan. Left in account 461 or hidden among expenses, they become a problem at the first inspection.
Before the financial year is closed, expenses with personal potential are reviewed: vehicles, phones, business entertainment, travel, the home office. Correcting the annual return costs less than a finding at inspection.
An invoice to the company documents the payment, not the purpose. The purpose decides deductibility, and the beneficiary decides the rest.
They don’t matter for the 1%. They matter for VAT, for benefits in kind, and for the reclassification of sums taken out for the member.
The 50% regime accepts the personal-professional mix for the vehicle used in the activity. The family’s vehicles are not vehicles of the activity.
No. An expense for the benefit of the member, repeated and undocumented, can become a disguised dividend, a loan to the member, or embezzlement (delapidare). Non-deductibility is the mild scenario.
Yes, under the 50% regime. For vehicles under 3,500 kg with no more than nine seats, not used exclusively for the activity, expenses are 50% deductible for corporate income tax purposes, under Article 25(3)(l), and VAT is deducted at 50%, under Article 298. Personal use of such a vehicle, however, is not a taxable benefit, under Article 76(4)(ț). Without logbooks, 50% is the rule; with logbooks and exclusive use, 100%.
For the 1% tax on revenue, no: expenses do not reduce the base. It does matter, however, for VAT, if you are VAT-registered, for classifying the asset as a benefit in kind of the director or the employees, and, in the case of expenses for the benefit of members unrelated to the activity, for their reclassification as disguised dividends or as sums withdrawn without basis.
Yes, if purchased by the company, on invoice, and used in the activity. Low-value items are expensed directly; those above the statutory threshold are depreciated. Occasional personal use of a work phone does not change the regime; a second phone, for a spouse or child, is a benefit in kind or a non-deductible expense.
Yes, in proportion to the floor area allocated to the activity, if the registered office or a secondary office is declared there and there is a loan-for-use or lease agreement between you and the company. Utilities are deducted in the same proportion. Without an agreement and without a declared office, the expenses are personal.
Business meals, gifts of reasonable value for business partners, drinks offered at the office. They are deductible up to 2% of accounting profit plus corporate income tax and the business entertainment expenses themselves, under Article 25(3)(a). Above the limit, they are non-deductible, and the related VAT follows the same fate.
When the sums paid by the company for the member are unrelated to the activity, are not documented as a benefit or as a dividend, and recur. At that point, the classification is no longer a tax matter, but can become embezzlement or the use of the company’s assets for personal purposes. The line between a non-deductible expense and a criminal offence is addressed separately.
Informative material, updated on 18 September 2026. It does not constitute legal or tax advice; individual situations must be assessed on their own facts.
If your company has received a notification or has an inspection under way, the related analyses are grouped under tax inspection. For the assistance provided to companies, see corporate taxation.
An initial discussion runs the expenses with personal potential through the three questions, establishes what needs to be regularised and how, and separates what is non-deductible from what could become a bigger problem.