Expat expenses can now be claimed locally

“Until now, companies with headquarters in Romania faced a rather delicate problem as they did not know how to legally meet expenses of foreign specialists sent temporarily to the local market,” said Alex Milcev, Partner of the Fiscal Assistance Department of Ernst&Young Romania. According to Milcev, companies who called on “fiscal non-resident” foreign specialists were obliged to resort to all sorts of “solutions,” each more inventive than the previous, to get around this legal loophole.

Fiscal residence is available only to foreigners who stay in Romania for at least six months every year. Expats who stay less time are not subject to taxation.
“From now on, expenses for personnel are deductible, even if the respective specialist is not an employee of the company or its administrator. It is sufficient for a contractual relationship to exist between the foreign company employing the specialist and the local company,” explained Milcev.