Preliminary assessment of the fourth payment request of Romania

In December 2025, Romania adopted Law No. 239/2025 changing the fiscal provisions related to car taxation (Evidence No. 15).

Article XII, point 43 of Law No. 239/2025 amends Article 470(2) of the Fiscal Code, introducing a new formula for the taxes on vehicles’ ownership changing the way in which taxes on the ownership of passenger vehicles are designed. In particular, it modifies the criteria and the calculating method of the annual vehicle’s ownership tax, differentiating the tax level depending on both cylinder capacity (the only criterion previously considered in the tax calculation) and pollution standards. Lower tax rates are applied to vehicles meeting more stringent pollution norms (electric vehicles with zero- emission and hybrid vehicles with tailpipe emissions above 50 g CO2/km), and progressively higher tax for larger engines and lower environmental performance.

With these amendments, resulting in lower tax coefficients for vehicles with improved environmental performance, the differentiated fiscal treatment provides fiscal incentives for the acquisition of zero-emission vehicles, respectively electric vehicles which are taxed the lowest.

Additionally, Article XII, point 46 of Law No. 239/2025 introduces a new article 470(31) in the Fiscal Code providing an additional fiscal incentive: a fixed annual vehicle tax (flat tax) of RON 40 for electrically powered vehicles, representing a preferential tax treatment for zero-emission vehicles directly into the tax system compared to all other vehicles that are taxed in a progressive manner depending on engine capacity and pollution norm. Also, based on Article XII, point 45 of Law No. 239/2025 hybrid cars with CO2 emissions lower than 50g/km benefit from a tax reduction up to 30%, depending on local authorities’ decision.

Furthermore, the Romanian authorities adopted several communal legal acts (nine in total – Bucuresti, Timisoara, Focsani, Ploiesti, Alba-iulia, Piatra-Neamt, Tulcea, Buzau, Constanta) between 2021 and 2025 introducing fiscal incentives to increase the number of electric vehicles (defined by the above specific legal acts as zero-emission vehicles), in addition to the ones provided by the Fiscal Code (Evidence Nos. 6-14).

These local legal acts provide indirect fiscal incentives for the purchase of zero-emission vehicles by granting exemptions or reductions on the parking fee in public spaces for hybrid and/or electric vehicles like allowing them to use public paid parking without paying the parking fee in 9 main cities in Romania.

With respect to the fiscal incentives to scrap polluting vehicles (EURO 3 and below), Law No. 239/2025 also introduces fiscal incentives to exchange polluting vehicles with less polluting ones. Article XII, point 45 of the Law provides for a reduction of up to 30% of the tax on vehicles’ ownership for hybrid vehicles, combined with the establishment through Article XII, point 46 of the Law of a very low fixed tax (RON 40) for electric vehicles and thus generating a substantial tax differential compared with EURO 3 or below vehicles. Thus, the amendments to Article 470(3) of the Fiscal Code establish a differentiated tax burden based on emission class, age, or environmental impact which provide an incentive for exchanging a polluting vehicle with a less polluting one.

The Law No. 239/2025 reshapes ownership costs to make retaining old polluting vehicles progressively more expensive relative to less polluting ones. By differentiating the level of taxation according to the vehicles’ environmental performance, the law increases the total cost of ownership of old polluting vehicles (EURO 3 and below) treating zero-emission and low-emission vehicles more favourably. Through this cost increase for holding old polluting vehicles, the resell value of these vehicles is set to decline as well.

This change in relative and absolute prices although not always sufficient to trigger scrapping, contributes to gradual fleet renewal influencing buyers' choice and ownership of new cars. The

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