It rarely happens that a tax rule is repealed a month after it came into force. That is exactly what happened with the 1% cap on the deductibility of expenses invoiced by affiliated entities from abroad — a provision that directly affected small and medium-sized companies with partners in the group.
What the rule provided
Legea nr. 239/2025 (Law no. 239/2025) introduced article 25¹ into the Tax Code, applicable from January 1, 2026. According to this, taxpayers with a turnover in the previous year less than or equal to 50 million euros considered expenses with intellectual property rights, management, and consultancy carried out with non-resident affiliated entities deductible only within the limit of 1% of the total recorded expenses.
The threshold is worth highlighting: the rule targeted companies with a turnover below 50 million euros. That is, specifically the SME segment, not large multinationals.
There were also exclusions. The cap did not include expenses resulting from transactions with non-resident affiliates for obtaining trademarks, industrial designs and models, copyrights and similar rights registered in Romania, nor expenses capitalized in the value of tangible and intangible assets according to accounting regulations. From 2027, additional reporting obligations were also foreseen.
Why it was a problem for small firms
A cap of 1% of total expenses is very tight for a company receiving actual services from the group. A company with annual expenses of 5 million EUR could deduct a maximum of 50,000 EUR from management or consultancy invoices received from the parent company abroad — regardless of how economically justified those services were.
The difference became a non-deductible expense, thus additional corporate income tax. And for companies that are part of an international group and effectively receive management, IT, or legal support from another country, this meant taxation on costs they had already incurred.
The repeal: OG 6/2026
Through Ordonanța Guvernului nr. 6/2026 (Government Ordinance no. 6/2026), published in Monitorul Oficial (Official Gazette) no. 77 of January 30, 2026, article 25¹ of the Tax Code was repealed.
The officially cited reason relates to Romania's OECD accession process. From the organization's perspective, the rule could generate risks of double taxation and discriminatory treatment toward non-resident entities — a Romanian affiliated company was not subject to the same limitation, which raised compatibility issues.
What applies now
Corporate income tax payers return to the general deductibility regime provided in article 25 of the Tax Code, applicable:
- starting with the first quarter of 2026, for companies that declare and pay quarterly;
- for determining the fiscal result of the year 2026, in the case of those who apply the annual declaration and payment system.
In other words, the rule did not produce practical effects for most taxpayers — the repeal came before the first quarterly closing.
What remains valid, however
Repealing the 1% cap does not mean you can deduct any invoice received from the group. The general rules remain just as demanding:
- The expense must be incurred for the purpose of carrying out the economic activity — the substantive condition from article 25 of the Tax Code.
- Transactions with affiliated entities remain subject to transfer pricing rules. ANAF verifies if the price used corresponds to the arm's length principle.
- You must be able to document that the service was actually rendered and that it brought a benefit to your company. Generic "management fee" invoices without supporting documentation are among the first things contested during an audit.
- Obligations regarding the transfer pricing file are maintained, depending on the thresholds applicable to each category of taxpayer.
What you do now
If in January 2026 you reconfigured intra-group contracts to fit within the 1% cap — reducing received invoices, renegotiating cost structures, accounting reclassifications — it is worth re-evaluating. The constraint that motivated those decisions no longer exists.
If, on the contrary, you postponed any adjustments waiting for clarifications, you were right to wait. Just check that the records for the first quarter reflect the correct regime, that of article 25.
In both situations, use the opportunity to check the documentation of intra-group services. That is where the risk is concentrated now, not in a percentage cap.
Article prepared based on Legea nr. 239/2025 and OG nr. 6/2026, published in Monitorul Oficial nr. 77 of January 30, 2026. It does not constitute tax advice; intra-group situations are analyzed individually.