Clarifications from ANAF regarding the tax treatment of expenses.

Clarifications from ANAF regarding the tax treatment of expenses: what is deductible and what is not?

On June 24, 2025, ANAF published a new guide regarding the application of the rules for deductibility of expenses in calculating the corporate tax. Its purpose is to provide taxpayers with clarity in determining deductible expenses, according to the provisions of the Fiscal Code.

What you need to know

1. Personal expenses are not deductible. Expenses that have no direct connection to the company's economic activity, such as personal expenses of employees or shareholders, cannot be deducted.

Make sure that each expense is justified and documented appropriately to avoid reclassifications for tax purposes.

According to the guide and Art. 25 para. (4) lit. f) of the Fiscal Code: "Expenses related to goods of a nature intended for the personal use of employees or other persons are not considered expenses incurred for the purpose of displaying economic activity, and thus are not deductible..." 

 2. Sponsorships, donations, and scholarships – limited deductibility. These expenses are deductible up to 0.75% of revenue or 20% of due corporate tax, applying the lower limit.

Plan these contributions considering the existing tax limits.

These expenses are regulated by Art. 25 para. (4) lit. i): "They are deductible up to a limit of 0.75% of revenue or 20% of due corporate tax, taking into account the lowest value."

3. Financial expenses – beware of undercapitalization. Interest and foreign exchange differences are only deductible under certain conditions, depending on the capital structure and a ceiling of 500,000 euros.

Review the financing structure to avoid losing deductibility of significant amounts. It is essential that these expenses be justified and appropriately documented to be considered deductible in calculating the corporate tax.

 Interest and foreign exchange differences are deductible only under certain conditions. Art. 25 para. (4) lit. e) states: "Expenses related to interest and net losses from foreign exchange differences are limitedly deductible, depending on the level of capitalization and an annual ceiling of 500,000 euros.”

Conclusion

The new guide issued by ANAF aims to clarify and harmonize tax practice regarding the deductibility of expenses, in accordance with the existing legislation. It is essential for companies to base their financial decisions on clear legal provisions and to organize their supporting documents rigorously.

 
Contact us for personalized consultancy and to ensure that your company complies with all applicable tax regulations.