Romania proposes annual car tax exemption for one vehicle

A new legislative proposal registered in the Romanian Senate aims to exempt individuals from paying the annual tax on a single automobile. The initiative seeks to amend the Fiscal Code to allow natural persons to benefit from an exemption for one vehicle they own or co-own, regardless of its pollution standards.

Under the proposal, individuals owning only one car would receive the exemption automatically. Those owning multiple vehicles would need to select which specific car is exempt by March 31 of each fiscal year. This choice would remain valid in subsequent years unless the taxpayer requests a change. The exemption does not apply to vehicles owned by commercial companies, nor does it eliminate other costs such as road taxes (rovinieta), fuel excise duties, or VAT.

To mitigate the impact on local government revenues, the state would fully compensate municipalities for the lost tax income through dedicated funds from the state budget, specifically sourced from VAT.