The Romanian subsidiary has thirty employees and one accountant. The group it belongs to has consolidated revenue of one billion euro. Since 1 January 2024, it is that second figure that matters, and the first reporting cycle has already closed, in June 2026, whether or not Romania knew about it.
Legea nr. 431/2023 transposes Directive (EU) 2022/2523 and applies to entities established in Romania that are part of a multinational group of undertakings or a large-scale domestic group, with annual consolidated revenue of at least the equivalent of 750 million euro in at least two of the last four financial years.
The aim is for the group's profit to be taxed at an effective rate of at least 15% in every jurisdiction. If, in Romania, the effective rate, calculated under the rules of the law, is below 15%, a domestic top-up tax is due to cover the difference. The law applied to financial years beginning on or after 31 December 2023, and the first information return had a deadline of 30 June 2026.
The law was published in Monitorul Oficial nr. 8 of 5 January 2024, and organises the minimum taxation through three mechanisms that apply in a pre-set order.
A domestic top-up tax is due on the excess profit of constituent entities established in Romania that are taxed at a low level, under Chapter III of the law. This is the mechanism with a direct impact on the Romanian entity, because it is levied here, before any other state can step in.
The ultimate parent company established in Romania owes the top-up tax for constituent entities in other jurisdictions taxed at a low level, to the extent of its allocable share. It concerns groups headquartered in Romania, a narrower category, but one that exists.
When the top-up tax has not been collected through the IIR at the parent company's level, the Romanian constituent entity records an additional expense equal to its share of that tax. The rule applies to financial years beginning on or after 31 December 2024.
The law does not concern only multinationals. A group made up exclusively of Romanian entities, which exceeds the threshold, falls under the same regime. This is the detail that most often catches people out.
The natural question any finance director in Romania asks is why there would be a top-up tax in a state with a 16% corporate income tax. The answer lies in how the effective rate is calculated, which is not the rate under the Tax Code.
The effective rate within the meaning of the law is calculated at jurisdiction level, as the ratio between adjusted covered taxes and qualifying profit, both determined under Pillar Two's own rules, starting from the consolidated accounts, not from the Romanian tax base.
Tax incentives, exemptions, tax credits, temporary differences and the treatment of certain income can push this ratio below 15%, even where every company in Romania pays 16% on its own tax base. The gap between the two calculations is where the top-up tax appears, or does not.
For this reason, the analysis cannot be done from the corporate income tax return. It is done through a separate calculation, at jurisdiction level, which requires consolidated data that the Romanian entity often does not hold on its own.
The information return for the top-up tax is filed within 15 months of the last day of the reporting financial year. For the first year of application, the time limit was extended to 18 months.
For groups with a calendar-year financial year, that meant 30 June 2026 for the 2024 financial year. The deadline has passed. Entities that have filed nothing are in reporting non-compliance, and putting it right needs to happen now, not at the next deadline.
For the 2025 financial year, the 15-month time limit falls on 31 March 2027, again for the calendar year. Groups with two or more entities in Romania could designate, through the N408 notification, one entity to meet the obligations on behalf of the others; the option for 2024 had a deadline of 31 December 2025.
The reporting forms were approved by ANAF during 2026, and the procedure is new for everyone, including the administration. Interpretive uncertainties are to be expected and are managed by documenting every calculation option.
The consolidated revenue for the last four financial years is obtained from the group, and it is checked whether at least two of them exceed the equivalent of 750 million euro. The Romanian entity cannot answer this question on its own.
All group entities established in Romania are listed, including small, dormant or recently acquired ones. Each is, in principle, a constituent entity with its own obligations.
If there are several entities in Romania, a decision is made to designate a single one, through the N408 notification, for filing and payment on behalf of the others. The decision is taken with the group, not locally.
The adjusted covered taxes and the qualifying profit for the Romanian jurisdiction are determined, under the rules of the law, starting from the consolidated data. This is the central technical step, and the most time-consuming.
If the effective rate is below 15%, the domestic top-up tax on the excess profit is calculated. If it is above, the payment obligation does not arise, but the filing obligation remains.
The information return is filed within 15 months of the closing of the financial year. For 2025, the deadline is 31 March 2027 for a calendar year. For 2024, if it was not filed by 30 June 2026, it needs to be put right immediately.
Every calculation option, every adjustment and every exclusion is documented. The regime is new, audits will come later, and the defence is built on the calculation file, not on the memory of those involved.
The threshold is checked at group level. An entity with ten employees, within a group with one billion euro in revenue, is a constituent entity with full obligations.
The Pillar Two effective rate is calculated under different rules than corporate income tax. It can be below 15% even with a nominal 16%.
The group can centralise the calculation, but this does not remove the Romanian entity's obligation towards the Romanian tax authority. Designating a reporting entity is done expressly, through notification.
The first deadline was 30 June 2026, and it has passed. The second is 31 March 2027. Anyone who treats the regime as a future problem has already missed a deadline.
The global minimum tax does not replace anything that already existed. Transfer pricing remains the rule for allocating profit between entities, and its adjustments have a direct effect on the jurisdiction's qualifying profit. Economic substance takes on a new value, through the substance-based carve-out, which reduces the excess profit by reference to payroll and tangible assets in the jurisdiction.
And for groups with structures in low-tax jurisdictions, the regime changes the economic calculation of those structures: the profit undertaxed there is recovered, through the IIR or the UTPR, elsewhere. This is the context in which international structures have been reassessed since 2024.
The 750 million euro threshold is checked at group level, not at the level of the Romanian entity. If the group you belong to exceeds it in at least two of the last four financial years, the Romanian entity falls within the scope of the law, however small it is.
A nominal rate of 16% does not guarantee an effective rate of 15%. Tax incentives, exemptions, credits and the differences between the accounting base and the tax base can push the effective rate, calculated under the Pillar Two rules, below the threshold. In that case, the domestic top-up tax is due, so that the effective rate reaches 15%.
For the 2024 financial year, the extended 18-month time limit fell on 30 June 2026 for groups with a calendar year. A failure to file is a reporting non-compliance with its own penalty regime. Immediate regularisation is required, and for the 2025 financial year the 15-month time limit is already running.
Yes. The law also applies to large-scale domestic groups, not only to multinational ones. A group made up only of Romanian companies, which exceeds the threshold, owes the domestic top-up tax on the same terms.
Each constituent entity has, in principle, its own obligations. Groups with two or more entities in Romania can designate, through the N408 notification, a single entity to meet the filing and payment obligations on behalf of the others.
Yes. Corporate income tax is calculated and paid as before. The top-up tax is added only if, and to the extent that, the jurisdiction's effective rate, calculated under the Pillar Two rules, falls below 15%.
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 the situation involves income, accounts or residence in another country, the related analyses are grouped under the international tax analyses. For assistance on such matters, see international taxation.
An initial discussion establishes whether the regime applies, which deadlines have passed and what remains, who files for the entities in Romania, and on what data the effective rate calculation is built.