What Romania now offers
Until 2026 Romania had no research credit in the British or French sense. It worked on the tax base: an additional deduction on eligible research and development spend, accelerated depreciation on the equipment, and an income tax exemption for research staff.
Emergency Ordinance 8/2026, published in the Official Gazette no. 147 of 25 February 2026, changed that. It introduced article 20^1 of the Fiscal Code, a tax credit of 10% of eligible research and development expenses, deducted from the corporate income tax due for the year. Where the credit is larger than that tax, the difference does not evaporate: it becomes a fiscal receivable of the company, settled over the following four fiscal years by offset against other tax liabilities or by refund.
So the current architecture is:
- a 10% tax credit under article 20^1, refundable, or
- the additional deduction of 50% under article 20, on the tax base — the company chooses between the two for each fiscal year;
- accelerated depreciation on assets used in the activity, including the enhanced first-year rate for 2026 acquisitions;
- an income tax exemption for research staff under article 60 point 3, with the conditions set by joint order of the finance and research ministries.
Points 1 and 2 are only useful to a company taxed on profit. A company on the micro-enterprise regime is taxed on revenue and has no corporate income tax for a credit to reduce — which decides the question before eligibility is even analysed. The comparison between the two regimes is in the guide on the micro-enterprise regime versus corporate tax, and a company planning a research programme usually wants that modelled as part of a proper tax advisory review.
The credit against the deduction: the arithmetic
The two reliefs are not interchangeable, and the difference is larger than it looks.
The additional deduction reduces the base. On RON 1,000,000 of eligible expenditure it gives a further RON 500,000 of deduction, worth 16% of that — RON 80,000 of tax. The credit reduces the tax. On the same RON 1,000,000 it is worth RON 100,000, whatever the margin.
Take a company with RON 1,000,000 of eligible research costs and corporate income tax of RON 400,000 before any relief:
| Additional deduction, art. 20 | Tax credit, art. 20^1 | |
|---|---|---|
| Relief computed | RON 500,000 extra deduction | RON 100,000 credit |
| Corporate income tax due | RON 320,000 | RON 300,000 |
| Cash value of the relief | RON 80,000 | RON 100,000 |
Now take the same company in a weak year, with corporate income tax of only RON 60,000:
| Additional deduction, art. 20 | Tax credit, art. 20^1 | |
|---|---|---|
| Corporate income tax due | Nil, with a larger loss carried forward | Nil |
| Unused relief | Locked in the loss, usable only against future profits | RON 40,000 receivable |
| What happens to it | Carried forward as a tax loss, within the Fiscal Code limits | Offset against other tax liabilities, or refunded, within four fiscal years |
That second table is the whole point of the reform. The old deduction was worth nothing to a company that was investing ahead of revenue — precisely the company most likely to be doing research. The credit converts the same spend into a claim against the state that can be set against VAT, payroll taxes or any other liability, or asked for in cash.
Why it was built as a refundable credit
The four-year window is not arbitrary. Under the Pillar Two global minimum tax rules, a credit that is paid in cash, or made available as a cash equivalent, within four years of the conditions being satisfied is a qualified refundable tax credit. It is then treated as income in the effective tax rate computation rather than as a reduction of covered taxes.
The practical consequence for a Romanian company inside a large group: a non-refundable incentive lowers the group’s Romanian effective tax rate and can be clawed back through a top-up tax elsewhere, which makes the incentive worthless to the group. A qualified refundable credit does not. Groups in scope of the minimum tax should therefore model the article 20^1 option at group level, not only at Romanian level — the answer can differ from the one a standalone Romanian company would reach.
Eligibility is still defined narrowly
The credit changed the mechanism, not the scope. The relief targets applied research and technological development, not everything a company calls innovation. Routine development, adapting an existing product, configuring purchased software and ordinary quality control are typically outside. The eligible categories of expense, the framework for assessing whether an activity qualifies and the territorial conditions on where the work is carried out sit in secondary legislation and are read for the year concerned.
Two exclusions are worth checking early. Expenses financed by non-refundable public funding are generally not eligible for the same relief, and the arrangement for subcontracted work determines who may claim it. Where the analysis is genuinely uncertain, the recognised framework provides for a specialist assessment of whether the activity qualifies; using it turns an argument during an inspection into a document produced beforehand.
Accelerated depreciation on the equipment
Equipment used in research may be depreciated on the accelerated method, which brings a larger share of the cost into the early years. GEO 8/2026 went further for one year: under article 28 paragraph (8^1) of the Fiscal Code, for new assets in subgroups 2.1 and 2.4 acquired or produced and put into use between 1 January and 31 December 2026, up to 65% of the entry value may be depreciated in the first year, the remainder over the residual useful life. Separately, the minimum fiscal value at which an asset is depreciated rather than expensed stands at RON 5,000 under article 28 paragraph (2) letter b), a figure updated annually by Government decision.
This does not increase the total deduction; it moves it forward. For a profitable company buying laboratory or test equipment in 2026, the cash effect is immediate. For a company in a loss position, accelerating a deduction it cannot use only enlarges a loss — and, now that the R&D credit itself is refundable, the sensible order is usually to take the credit first and treat depreciation as the timing decision it is.
The relief for research staff
Article 60 point 3 of the Fiscal Code provides an income tax exemption for employees working on applied research and technological development projects, with the conditions — what counts as a project, which roles qualify, what the employer documents — set by joint order of the ministries of finance and of research.
This one carries a specific warning. Between 2024 and 2026 several payroll exemptions in other sectors were narrowed, capped or withdrawn in the consolidation packages, and the status of a payroll relief has to be read for the payroll period you are running. Applying a withdrawn exemption produces an immediate payroll exposure rather than a disputed deduction: the amounts are assessed on the employer, with interest and penalties, and the correction runs through the payroll declarations. The mechanics of those declarations are on the payroll and HR page.
The documentation that decides the claim
In every inspection we have seen on this relief, the argument was not about whether research is a good thing. It was about whether the file supported the claim. A refundable credit raises the stakes: a claim that reduces tax to nil and then asks for money back is examined on a different footing from a deduction that quietly lowers a base.
A defensible file is built while the project runs, and it contains:
- a project description stating the objective and, critically, what was uncertain at the start — the relief is aimed at resolving a technical uncertainty, not at delivering a known result;
- a work programme with phases and expected outputs;
- the people involved, their roles, and time records that connect them to the project rather than to general duties;
- a budget against actual costs, with the expenses traceable from the accounting records to the project;
- evidence of the outcome, including failures — an unsuccessful project can still be research;
- for equipment, a record of what it was used for and in what proportion.
What to do now
- Check the regime. On the micro-enterprise regime there is no corporate income tax to set a credit against, and that may itself be a reason to model the alternative.
- Re-run the last claim under the credit. A company that took the 50% additional deduction for 2026 should compute both and take the option that is worth more — the credit usually is.
- Separate the projects from the operations in the accounts, so eligible costs can be identified without reconstruction.
- Start the time records now, because they cannot be created retrospectively with any credibility.
- Write the uncertainty down at the start of the project, while it is genuinely uncertain — the single most persuasive document in the file.
- Model the group position if you are inside a group in scope of the global minimum tax, since that is where the refundable feature earns its value.
- Review the payroll relief separately from the corporate one; they stand or fall independently, and the payroll one carries the faster exposure.
Where a claim has already been made and the file behind it is thin, the exposure is worth quantifying before an inspection raises it, since a voluntary correction is treated differently from a finding. That work is described on the page about ANAF inspections and appeals.
