A BRIEF TAX AND ACCOUNTING GUIDE ON SPONSORSHIP
THE SPONSORSHIP LAW AND THE FISCAL CODE
The Sponsorship Law and the Fiscal Code allow commercial companies paying corporate income tax (impozit pe profit) or micro-company tax (impozit pe venit) to provide sponsorships to organizations in specific fields (e.g., charitable organizations) and to benefit from tax incentives under certain conditions provided by law.
In the case of sponsorships granted to non-profit legal entities, including religious units, the related amounts are deducted from the corporate/income tax due, within the limits provided by the Fiscal Code, only if the sponsorship beneficiary is registered, at the date of the contract, in the Registry of entities/religious units for which tax deductions are granted.
Sponsorship expenditure is not a tax-deductible expense, but it can represent a tax credit, meaning it can reduce the payable corporate tax by the full amount of the sponsorship provided.
TAX FOR 2025 VIA FORM 177
How can you provide a sponsorship by June 25, 2026, that is deducted from the tax already paid for the previous year? Redirect 20% of the company's tax for the 2025 fiscal year, at no real cost or cashflow impact, in 4 simple steps:
1. Asigurați-vă că vă regăsiți în situația următoare: cheltuiala cu sponsorizarea în anul 2025 nu a depășit plafonul pentru sponsorizare în anul fiscal 2024 (suma minimă dintre 0,75% din cifra de afaceri și 20% din impozitul pe profit);
2. Complete the sponsorship contract and send it to: prieten@fundatiaregala.ro.
3. Download Form 177 (D177 – "Request regarding the redirection of corporate income tax" from the ANAF portal – https://static.anaf.ro/static/10/Anaf/Declaratii_R/177.html
4. Submit the completed Form 177 by June 25, 2026, to the tax authority competent for administering the taxpayer's tax liabilities.
(!) Note: By submitting Form 177, you redirect tax already paid. This sponsorship utilizes the remaining allowance of the tax credit for 2025. The sponsored amount will be paid to the beneficiary by the tax authorities based on the submitted form. To provide a sponsorship from the 2025 tax credit, please complete a sponsorship contract with The Margareta of Romania Royal Foundation.
REDIRECTING TAX VIA FORM 177 – A NEW TAX INCENTIVE
Amendments to the Fiscal Code by Law 322/2021: When sponsorships made during a fiscal year do not reach the allowed ceiling (leaving a positive unused difference even after utilizing any carried-forward sponsorships from previous years), the taxpayer may "redirect the tax" for sponsorships or patronage. Payments for redirected amounts will be made by the competent tax authority where the redirection form was filed.
Through Order 1679/2022 and Order 3562/2024, Form 177 was approved as follows:
- Corporate tax payers can redirect sponsorship amounts to non-profits until June 25, 2026, if the 2025 sponsorship expenditure did not exceed the 2024 ceiling.
- Form 177 for the year 2025 can be submitted until June 25, 2026. Only taxpayers who have not exhausted their 2025 deductible sponsorship ceiling may opt for this.
- The form shall be submitted to the tax authority competent for the administration of the tax liabilities owed by the taxpayer/payer. The redirection option may be exercised for one or more entities. In the case of taxpayers who are members of a tax group, the redirection may only be ordered by the responsible legal entity, and the form shall be submitted to the tax authority competent for the administration of the tax liabilities owed by the responsible legal entity of the group.
- Processing: The deadline for settling Form 177 requests is 45 days from submission. If tax debts are outstanding, the 45-day period begins once the debt is cleared.
FOR COMPANIES PAYING CORPORATE INCOME TAX
Companies paying corporate income tax that provide sponsorships according to the Sponsorship Law—to support non-profit entities and religious units which, at the date of the contract, are registered in the Registry of entities/religious units for which tax deductions are granted according to the Fiscal Code—shall deduct the related amounts from the corporate tax due, up to the minimum value of the following:
► 0.75% of the turnover
► 20% of the corporate income tax due
Starting with 2018, taxpayers who provide sponsorships are obliged to submit an informative declaration regarding the beneficiaries of the sponsorships (Form 107), pertaining to the year in which the respective expenses were recorded.
The tax incentive granted through the tax credit mechanism practically allows the sponsor to pay the respective amount to a non-profit organization (subject to the mentioned conditions) instead of paying it as corporate tax. To be included in the tax calculation for the respective period, the sponsorship contract must be concluded (and the payment must be made) within the reference period.
Amendments to the Fiscal Code by Law 322/2021
Until 2021, if sponsorship expenses exceeded the permitted tax credit limits in the reference year, the eligible amounts could be carried forward for 7 years (for corporate tax payers) or for 28 consecutive quarters (for micro-company tax payers). This is no longer possible for amounts recorded starting with 2022. However, amounts carried forward from the past (pertaining to the years 2015–2021) may still be utilized until 2028. The recovery of these amounts as a tax credit is performed in the order of their recording, under the same conditions, at each tax payment deadline.
CALCULATION EXAMPLE (Corporate Income Tax)
A company has a turnover of 30,000,000 RON and a taxable profit of 8,000,000 RON. The corporate tax (16%) is 1,280,000 RON. With a sponsorship of 250,000 RON granted during the year, the tax reduction is calculated as follows:
| Elements for Calculation | Amount (RON) |
| Turnover (CA) | 30.000.000 |
| Taxable Profit | 8.000.000 |
| Corporate Tax (16%) | 1.280.000 |
| Limit A: 0.75% of Turnover | 225.000 |
| Limit B: 20% of Corporate Tax | 256.000 |
| Available Amount for Sponsorship (Minimum of A or B) | 225.000 |
DETAILS FROM SPONSORSHIP LAW NO. 32/1994
Eligible Activities
Sponsorships can be granted to beneficiaries in fields such as: culture, arts, medicine, science, education, humanitarian, religious, philanthropic, sports, human rights, social services/assistance, environmental protection, and the restoration of historical monuments.
Potential Beneficiaries:
- Non-profit legal entities in Romania operating in the fields mentioned above.
- Public institutions and authorities.
- TV/Radio programs, books, or publications in these fields.
- Individuals residing in Romania whose activity is recognized by a non-profit or public institution in the relevant field.
The incentive is NOT granted in cases of:
- Reciprocal sponsorship between individuals or legal entities.
- Sponsorship by relatives (up to the fourth degree).
- Sponsorship of a non-profit by a legal entity that directs or controls it.
Key Points to Remember:
- Sponsorship must be based on a written contract specifying the object, value, duration, and rights/obligations.
- The incentive is granted in the year the sponsorship is actually paid (or goods are provided).
- Sponsorships cannot be provided from public budget sources.
- The sponsor or beneficiary may inform the public about the sponsorship (name, logo, image) provided it does not harm the activity or public order. Commercial advertising is prohibited.
- The sponsor must not seek to direct the beneficiary's activity, directly or indirectly.
- Sponsors who, directly or indirectly, seek to direct the beneficiary's activity shall not benefit from the incentives provided by the Sponsorship Law.
NOTE: This document is for informational purposes only and does not constitute professional tax advice. We recommend consulting legislative provisions for full details.