Romanian Homeowners May Pay Taxes As Individuals For Up To 5 Rooms Let To Tourists

Romanian homeowners who let between one and five rooms to tourists will be able to declare their income and pay taxes without registering as self-employed persons, according to a draft amendment to the Tax Code, due to enter force on January 1.

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The homeowners can choose to declare their income either according to the income brackets in their county (an amount set every year by the local public finance department, irrespective of actual income), or through the standard revenue-expense system. The tax rate is a flat 16%.

The current Tourism Law requires any homeowner that rents out rooms to register as a company or self-employed person, and then to request classification from the Tourism Ministry. The Finance Ministry says this new amendment to the Tax Code will also be introduced into the Tourism law.

Mohammad Murad, head of tourism employers' federation FPTR, told MEDIAFAX that, during the tourist season, homeowners put up about 5,000 people every day and pay no taxes. In Murad's opinion, the most efficient method of taxation would be a yearly flat tax charged to owners who provide accommodation to tourists.

He estimates under 5% of tourists seek accommodation in individual homes and that so-called "illicit" tourism in Romania does not make up more than 15% of the market.

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