Tax Incentives for IT Companies in Romania

3 February 2026 · Guides

Alongside Bucharest, Cluj-Napoca is one of the most important IT hubs in Central and Eastern Europe. The local ecosystem brings together Romanian-owned companies, subsidiaries of international groups and numerous start-ups founded by investors from Germany, Austria, Italy or the Netherlands. For all of them, IT tax incentives are a concrete competitiveness factor: they can significantly reduce labour costs and improve a company’s cash flow.

At the same time, this is one of the most volatile areas of Romanian tax law. Eligibility conditions, thresholds and even the existence of certain incentives have changed several times in recent years. Any business decision built on these benefits must therefore rely on the legislation in force at the relevant moment, not on general information found online.

In this article we explain the main mechanisms, the categories of incentives and, most importantly, what you as a company manager must verify before applying an exemption.

What a „tax incentive” actually means in IT

The term covers several distinct instruments that should not be confused:

• Exemptions from salary income tax for certain categories of employees (for example, those involved in software development or in research and development);
• Additional deductions for corporate income tax on research and development expenses;
• Corporate income tax exemptions for taxpayers engaged exclusively in research, development and innovation, under certain conditions;
• General taxation regimes (micro-enterprise, corporate income tax) which, although not „IT incentives”, strongly affect the tax burden of a technology company.

Each instrument has its own conditions and its own legal basis. A company may qualify for one but not for another.

The exemption for software development

For nearly two decades, the best-known incentive was the exemption from income tax (standard rate of 10%) for employees engaged in software development. The mechanism does not apply automatically: the company and the employee must simultaneously meet a set of conditions established by joint ministerial order.

The classic eligibility conditions generally concerned:

• Type of activity — the employee must actually hold a position from a list of eligible occupations (e.g. programmer, analyst, software systems engineer), according to the Romanian occupation codes (COR);
• Qualification — typically a higher education degree in a relevant field (computer science, automation, mathematics) or student status in such programmes;
• The employer’s activity — the company must actually earn revenue from software development, often above a minimum threshold per exempt employee;
• Documentation — a supporting file proving the actual creation of software (contract, job description, project documents).

Very important: between 2023 and 2025 this exemption was amended repeatedly — a monthly cap above which income became taxable, then further restrictions. Do not treat the exemption as permanently granted. At the time of writing (2026), the rules and any caps must be checked against the legislation in force before applying them to payroll.

Research and development (R&D) incentives

In addition to salary exemptions, companies running R&D projects can benefit from advantages at corporate income tax level. The two most relevant mechanisms are:

1. Additional deduction — an extra percentage of eligible R&D expenses is deducted when computing the fiscal result, on top of the ordinary deduction, meaning the same costs reduce the taxable base several times over;
2. Accelerated depreciation of equipment used for R&D activities.

There is also a corporate income tax exemption for taxpayers engaged exclusively in research, development and innovation, applicable in the first years after incorporation, under the conditions provided by the Tax Code.

The crucial difference from the salary exemption is that R&D incentives require rigorous technical documentation. The project must match the fiscal definition of R&D (element of novelty, technological uncertainty), and the expenses must be recorded separately and supported by project documentation. Without this file, the deduction may be denied during an audit.

Indicative comparison table

Note: percentages, thresholds and deadlines change frequently. This table is indicative; always verify the value in force for the relevant tax year.

Relevance for foreign-owned companies

For international investors, there is a twofold consideration. First, incentives improve local profitability and therefore influence reporting to the parent company. Second, exempt or preferential income must be treated correctly under the applicable double taxation treaty, so that no unexpected effects arise at group level. We recommend factoring tax incentives into group reporting from the outset.

Eligibility is not automatic

The most common mistake we see is applying an exemption „because the company is an IT company”. No incentive works that way. Each benefit requires:

• verifying each eligibility condition, per employee or per project;
• building and keeping a complete supporting file;
• reflecting it correctly in payroll, tax returns and accounting records;
• periodic reassessment whenever the law changes.

In the event of an audit, the burden of proving eligibility falls on the company. Incorrect application can generate additional tax, interest and penalties that cancel out the intended advantage entirely.

How Conta Fiscal helps

Our team, a CECCAR member since 2004, verifies your company’s eligibility for the incentives in force, builds the supporting file and integrates the exemptions correctly into payroll and tax reporting. We work regularly with foreign-owned companies, for whom we also explain the impact of these incentives on parent-company reporting. Explore our full range of services or learn more about how we help.

For an assessment of your IT company’s specific situation, contact us for a discussion tailored to your case.

Frequently asked questions