The company has not opened anything in Romania. It has only a representative who visits clients, a rented warehouse, a team installing equipment for eight months in Brașov, or three employees working from home. No branch, no subsidiary. For the Tax Code, any of these can be a permanent establishment, with corporate income tax due from the first day, and the finding usually comes from someone else's audit.
Under Article 8 of the Tax Code, a permanent establishment is a place through which the activity of a non-resident is carried on in whole or in part, either directly or through a dependent agent. It covers the place of management, the branch, the office, the factory, the shop, the workshop, but also a construction or assembly site lasting more than 6 months, as well as the activity of a person who concludes contracts on behalf of the non-resident.
The consequence is corporate income tax on the profit attributable to the permanent establishment, due from the start of the activity, not from the date the establishment is found to exist, under Article 36 of the Tax Code, with tax registration made through Form 013. The double taxation treaty with the company's home state may narrow the definition, for example through longer terms for sites, and it prevails. For interpretation, the Tax Code expressly refers to the OECD commentary on Article 5 of the model convention.
Any space at the non-resident's disposal, used on a permanent basis for its activity: an office, a warehouse, a workshop, even a space within a building belonging to someone else. The implementing rules, at point 7, treat permanence as met once the place has been kept for more than 6 months. No document evidencing a right of use is required; what matters is actual availability.
A construction site, an assembly or installation project, and related supervisory activities become a permanent establishment only if they last more than 6 months, under Article 8(3). Treaties often set 9 or 12 months, which prevail. The periods of connected contracts are added together, and seasonal interruptions do not stop the count.
A person, other than an agent of independent status, who acts in Romania on behalf of the non-resident and is authorised to conclude contracts in its name or habitually exercises that authority, under Article 8(5). The employee who negotiates and signs, the exclusive representative, the agent who works almost entirely for the non-resident on terms unusual between independent parties.
Storing, displaying or delivering goods, stock kept for processing by another person, a place used only for purchasing or gathering information, activities of a preparatory or auxiliary character, products sold at fairs for no more than one month, under Article 8(4). The exceptions are exhaustive and are interpreted strictly, especially after the multilateral instrument, which restricts the fragmentation of activities between group entities.
The remote employee. The foreign company employs or contracts people in Romania who work from home. If their activity is essential and permanent, the home becomes a place of business; if they negotiate and conclude contracts, they are dependent agents. The issue arises more often in sales and management than in software development, but it is excluded nowhere. The position of the employee and that of the resident director are dealt with separately; the latter can go beyond permanent establishment, as far as the company's own tax residence.
Installation and servicing. The supply of equipment with installation, commissioning and supervision, on a project that runs long. The 6 months under the Tax Code, or the longer term under the treaty, are counted per project, with connected contracts added together. The company that signed a four-month contract and stayed for nine has a permanent establishment from the first day.
The captive distributor. The Romanian company, formally independent, which sells almost exclusively the non-resident's products, on terms it dictates, with prices and clients set by it. Article 8(5) can classify it as a dependent agent, and the non-resident then has a permanent establishment through it, in addition to the company's own tax obligations.
The warehouse that does more. Space rented for stock is excluded from permanent establishment status as long as it serves only storage and delivery. From the moment orders are taken there, terms are negotiated, invoices are issued or services are performed, the exception falls away.
A foreign legal person with a permanent establishment in Romania owes corporate income tax on the taxable profit attributable to it, under Article 36 of the Tax Code, determined as though the establishment were a separate entity, with income and expenses allocated according to transfer pricing principles. Profit attribution is, more often than not, the real dispute: not whether a permanent establishment exists, but how much of the group's profit belongs to it.
When the statutory 6-month period, or the term set by the treaty, is exceeded, tax is due from the start of the activity, with returns and payment for the whole period, and the withholding tax levied in the meantime on the income paid to the non-resident is deducted from the corporate income tax due. A company with several permanent establishments designates one, the designated permanent establishment, which meets the obligations for all of them.
A permanent establishment is not a legal entity: it has no legal personality, no capital, and does not limit liability. It is a tax classification of an activity, with its own tax identification code, its own accounting records, corporate income tax returns and, if it carries out taxable transactions, VAT registration. Staff in Romania trigger employer obligations, and repatriated profit follows the treaty's regime.
People, spaces, projects, partners in Romania. Who does what, where, for how long, with what authority. A permanent establishment hides in the operational detail, not in the organisation chart.
For each item on the map: a fixed place used with permanence, a site over the time limit, an agent with authority to contract. Then the exceptions under paragraph (4), read strictly, and the applicable treaty, with its own time limits.
The permanent establishment article in the treaty with the company's home state: the time limit for sites, the definition of an agent, the preparatory and auxiliary exceptions, and any changes made by the multilateral instrument. The treaty can help or make matters worse.
If the permanent establishment exists, it is registered through Form 013. If it does not exist yet, but is close, a decision is made on whether to restructure the activity, limit it in time, or convert it into a local entity, weighing the cost of each option.
The method for allocating income and expenses to the permanent establishment is built, with the corresponding transfer pricing documentation. This is what the tax authority will dispute once it has accepted that the establishment exists.
VAT, if the establishment carries out taxable transactions; employer obligations for staff in Romania; corporate income tax returns; withholding tax on payments to the non-resident, coordinated with the establishment's own tax.
If the establishment has existed for years, the tax is due from the beginning. Voluntary disclosure, with the attribution documentation prepared, costs less than being found out in an inspection triggered at a Romanian client.
A permanent establishment arises without an entity. One employee, one warehouse or one site is enough.
What counts is the real duration, including extensions and connected contracts. Once the limit is exceeded, tax runs from the first day.
Independence is judged on substance: exclusivity, control, terms. A captive distributor can be a dependent agent.
Payment is due from the start of the activity, with late-payment charges (accesorii: interest and penalties), for the entire period not yet time-barred under the limitation period (prescripție). The finding comes from the audit of the Romanian partner.
Possibly. Under Article 8 of the Tax Code, a permanent establishment is a place through which the non-resident's activity is carried on in whole or in part, directly or through a dependent agent. An employee's home can be a place of business if it is used on a permanent basis for the company's activity, and an employee who negotiates and concludes contracts on the company's behalf is a dependent agent. The answer depends on what the three of them actually do, not on the fact that they work from home.
The Tax Code requires the site, the construction or assembly project, or their supervision, to last more than 6 months, and the treaty with the company's home state may set a longer term, often 12 months, which prevails. Under the limit, there is no permanent establishment. Over it, tax is due from the start of the activity, not from the date the limit is exceeded, under Article 36(3).
Those listed under Article 8(4): storing, displaying or delivering goods, keeping a stock for processing by another person, a fixed place used only for purchasing or gathering information, activities of a preparatory or auxiliary character, and combinations of them, provided the overall activity remains preparatory or auxiliary. The exceptions must, however, be read together with the treaty, where newer versions are stricter.
Through Form 013, the tax registration return for non-resident taxpayers carrying on activity in Romania through one or more permanent establishments, together with the supporting documents, following which the tax authority allocates the tax identification code. A company with several permanent establishments designates one of them, the designated permanent establishment, to meet the obligations.
Corporate income tax, at the standard rate, on the taxable profit attributable to the permanent establishment, determined as though it were a separate entity, with income and expenses allocated under the transfer pricing rules. VAT may be added to this, if the establishment makes taxable supplies of goods or services, together with employer obligations for staff in Romania.
Corporate income tax is assessed retroactively, from the start of the activity, with accesorii, for the entire period not yet time-barred under the limitation period, and the income paid to the non-resident for that activity can be reclassified. The finding usually comes from the audit of a Romanian client or partner, from its contracts and correspondence, not from the non-resident's own returns.
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 runs the Romanian presence through the three-form test and the applicable treaty, establishes whether a permanent establishment exists or is close to existing, and what to do in each case: restructuring, registration, or regularising the past.