Romania, a land of captivating castles, charming villages and dramatic mountain ranges—it’s also a country with a growing business landscape. But if you’re overseeing employees who travel for work, you’re probably wondering, “how much should I reimburse for mileage and is there a standard rate in this country?” Unlike some European countries with a single, flat-rate mileage allowance, Romania presents a bit more of a challenge. In this guide, we cover everything you need to know about mileage allowance in Romania to make your reimbursement process as smooth as Transylvanian plum brandy (țuică)!
How does mileage allowance work in Romania?
Unlike some European countries, Romania doesn't have a single, flat rate set by the Romanian Government for mileage allowances. This can feel a bit more flexible but also requires some planning on your part as an employer. Here's a breakdown of how it typically works:Who Decides the Rate?The reimbursement rate per kilometre is usually negotiated between the employer and the employee. This means you, as an employer, can tailor the rate to be competitive when outsourcing work. You can establish a clear company policy for outsourced employees or negotiate rates within an individual employment contract.What's Covered?The mileage allowance typically aims to compensate employees for the costs associated with business travel and can include:Additional Considerations:Some companies might offer a more comprehensive package, covering a portion of the following:What about tax implications? As long as the mileage allowance is reasonable, documented properly and adheres to Romanian tax regulations, it's generally tax-free for the employee—not subject to social security contributions or income tax. This can be another advantage when considering the overall compensation package for outsourcing workers in Romania.
- Fuel costs: are the main expense, reflecting the gasoline or diesel used over the number of kilometres for work trips
- Vehicle wear and tear: is the increased depreciation on the car due to business use
- Maintenance and repairs: costs related to keeping the car running smoothly for business travel
- Vehicle taxes and insurance contribution: a small part of the annual fees and insurance premiums may be factored in
- Tyre wear: the allowance might consider the extra wear and tear on tyres due to business miles
Company cars
The use of a company car for business purposes is considered a benefit in kind and is included in the calculation of personal income tax. The taxable value is determined based on the cylinder capacity of the vehicle and the number of months the car was used.In Romania, the tax rate for vehicles ranges from RON 8 (EUR 2) to RON 290 (EUR 58) per 200 cc of engine capacity or fraction thereof. For example, a vehicle with an engine capacity of 2000 cc would be taxed at a rate of RON 18 (EUR 4) per 200 cc, resulting in a total tax of RON 180 (EUR 36) per year.
Private cars
Expenses for vehicles, including private cars used exclusively for business purposes, are fully deductible by the company. However, car reimbursement for private car usage does not cover everything. Here's what's typically not included:Additionally, some companies might have limitations on car reimbursement, such as:It's important to check your company's car reimbursement policy for specific details on what's included and excluded.
- Personal travel: the reimbursement is meant to cover business trips, not commutes or personal errands
- Parking fees, tolls and other miscellaneous expenses: these are usually the responsibility of the employee
- Depreciation and wear and tear: the reimbursement doesn't account for the decrease in the car's value due to business use
- Fuel exceeding average consumption: if the employee uses more fuel than the calculated average for the trip, they might need to cover the difference
- Maximum mileage limits: there might be a cap on the total number of kilometres reimbursed per period
- Specific car types: reimbursement might not apply to all car categories (e.g., luxury vehicles)
High-value vehicle tax
Romania introduced a special tax on high-value movable assets, including luxury vehicles, effective from January 1, 2024:
- Applies to cars registered in Romania with a purchase value exceeding RON 375,000 (approximately EUR 75,000)
- Tax rate: 0.3% applied to the difference between the taxable value and the threshold
- Due for a five-year period starting from the year of purchase
- Payable by December 31st of each calendar year
What is not included in the mileage allowance in Romania?
When using private cars for business trips in Romania, certain travel allowances and expenses are not included in the mileage allowance. Here's a detailed overview:**(
- Travel expenses: these expenses cover the costs of various modes of transportation used during business travel, such as flights, taxis and public transport and are reimbursed separately from mileage allowances
- Incidental expenses: these are additional costs that may arise during business travel, such as communication fees, parking charges and tolls and are reimbursed separately from the mileage allowance
- Daily allowance: employees on business trips within Romania are entitled to a daily meal allowance of RON 57.50. This allowance covers meals and other minor expenses without needing additional receipts. However, it's important to note:
- Calendar year limit: the 60-calendar days limit for business trips with daily allowance applies per calendar year (January 1st to December 31st).
- Tax Implications: if the total daily expenses on a business trip exceed the RON 57.50 (€12) allowance**, the exceeding amount becomes subject to income tax and social contributions.
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)What is not included in the commuting allowance in Romania?
These include expenses or costs that the employee should pay from their own pockets. These include:
- Companion expenses: expenses incurred for travel and stay arrangements for family members, spouses, or friends accompanying the employee on a business trip
- Personal travel: the allowance is for work commutes, not personal trips
- Non-business purchases: any non-business-related purchases made by the employee during a business trip, such as buying gifts or souvenirs
- Leisure activities: costs associated with leisure activities or entertainment during the commute, such as visiting a gym or a cinema
How can I file a mileage allowance claim in Romania?
To file a mileage allowance claim in Romania, employees must follow their company's specific reimbursement procedures, as there is no standardised national mileage rate. First, maintain a detailed mileage log for each business trip, recording the start and end odometer readings, dates, and trip purpose. Collect and submit all relevant fuel receipts to support your claim. Make sure you adhere to your company's internal policies for submitting expense reports, which typically involve completing a mileage reimbursement form and attaching the necessary documentation. Submit this to the designated department, usually finance or human resources. Always consult your employer's guidelines for any additional requirements or specific processes.
Simplify business travel management in Romania and beyond with TravelPerk
Planning a business trip to Romania can be a logistical headache—booking flights, hotels, and meeting spaces is time-consuming in your own country, let alone one that’s foreign to you! TravelPerk offers an easy solution with a dedicated travel management platform. TravelPerk simplifies the booking process for flights, hotels and car rentals so your employees have access to the most up-to-date travel options, at a rate that matches your budget. Plus,
TravelPerk integrates with expense management tools
like Pleo and Expensify. This integration allows employees to easily track and submit mileage claims, ensuring accurate expense reporting and reducing administrative burdens for every type of business.?)
See how to save your company time and money on business travel.
Frequently asked questions about mileage allowance in Romania
Do standard mileage rates for reimbursement apply to public transport as well as motor vehicles in Romania?
Is there a standard mileage reimbursement rate for the European Union (EU)?
Which countries don’t have standardised mileage rates like Romania?
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