Consultant: Romania has the perfect recipe to expel large foreign companies from the country. “What Bosch, Amazon and Carrefour have in common”

The well-known financial consultant Cristi Tudorescu gives some examples of large companies, some of them multinational, put on the run by the new offices imposed by the government. From now on, taking into account that some of these companies will leave Romania or reduce their activity, the Romanian state will get less money from increased taxes and fees than before, when all these fees were somewhat more reasonable.

Romania is heading towards a crisis. PHOTO: Shutterstock

Cristi Tudorescu proves that Romania it only has to lose from the government's new fiscal policy, which drives away high-quality investors or causes them to abandon plans that would have brought profit to the country as well. Several important multinationals have already chosen either to leave Romania or are gradually disengaging.

“What do the following companies have in common: Robert Bosch SRL, Aptiv Technology Services &Solutions SRL, Amazon Development Center SRL, Carrefour Romania SA? They have all announced that they are either moving their investments or want to leave the local market altogether, or that they are firing people or closing factories. They have something else in common: we have some very good explanations for all of this. And they have something else in common…”, he started his post.

Furthermore, Cristi Tudorescu presents some figures related to these huge companies and explains, case by case, what will happen to each one.

“Robert Bosch SRL part of the Bosch group in Romania: 2024 revenues of 8.1 billion lei, 5,876 employees. Profit before tax – 227 million RON, i.e. a margin of 2.8%. Net profit of 158 million RON, i.e. it paid tax 31% of the profit. Because that 1% was applied to the turnover, that is why it pays more than the classic 16% of the profit on which previously paid it. The Bosch group, which is present in Romania both in car components and household appliances, announced in March that it was going to make an investment in Romania. From “they have somewhere to pay taxes, we know” to “they moved because Poland is closer to Germany”.he also writes.

More and more jobs lost

Further, he presents the data of a company that is less known, but which provided many jobs, jobs that will soon be lost.

“Aptiv Technology Services & Solutions SRL – also in auto components, announces today the closure of a factory in Ineu, Arad county. Some 800 people will be fired. And only the factory in Sânnicolau Mare (Timiș) will remain. Revenues 2024: 1.44 billion lei from the two factories. More than 2,700 employees, soon there will be less than 2,000 people. Profit before tax 2024 of 51 million lei (3.5%), net profit 36 million lei, that is, the state took about 30% of their profit from 2024. In 2023, they had revenues of 1.57 billion lei, gross profit of 77 million lei and net profit of 71 million, so they were better off before the introduction of the 1% miracle on the turnover. After it was introduced, they are even worse off and close it factory. An explanation could be found here as well. It's not our fault, but the car industry is suffering at the European level. It's never from us“, adds the expert.

Next on the list is Amazon, a company that will lay off hundreds of employees in Romania. This means that the Romanian state will spend extra money for social protection.

“Amazon Development Center SRL from Iași: in 2024 it had 802 million lei in turnover, up by 16%, 3,400 employees and a net loss of 29 million lei. Aha, that's it, we caught them: look where the profit was flowing outside the country, some might say. Good thing we put 1% on turnover, so they paid at least 8 million last year. But… Amazon Development Center recently announced that it would lay off 500. We have a good explanation there, too: those jobs were moving to India anyway”, is the irony of the economist.

Cristi Tudorescu. PHOTO: Facebook

A giant retailer present in Romania since 2000, a symbol at the European level, Carrefour, has decided to call it quits and is giving up its business in Romania.

“Carrefour Romania SA – the largest entity of the Carrefour group in our country: in 2024 it had revenues of 12.5 billion lei, 10,141 employees. Profit before tax 179 million lei (1.4% profit rate), net profit 52 million lei, because they are charged 1% on turnover). That means the state took 70% of the profit, something I wrote about before. I saw that it is very the feeling that those from Carrefour can't have that much profit, they know better how much profit they should have. Anyway, the group has problems in other countries. And we console ourselves with something – that this is still not certain – the places will be taken over of work would remain standing”he says.

A big error of the state

In the second part of the post, Cristi Tudorescu explains what all the four examples she gave have in common and asks some pertinent questions.

“So what else do the 4 examples have in common? All companies are subject to turnover tax. Questions: in some industries where things are already complicated: IT, automotive industry + automotive subassemblies, retail and distribution where margins are small – why do we need to come with our additional complications? Although many of the exemplified companies paid that 16% on profit – this is to avoid the aberration that they paid nothing – we come up with all kinds of taxes on top, just because it seems to some that they know better how much the profit should be. And how much should those companies pay? How many other examples of businesses with small margins will we need to see leave the country or reduce the number of employees or how many factories will close, until we reevaluate those taxes paid in vain, on top of that 16% on profit that they were already paying?

Will we find out after the 10th company leaves Romania? Or the 20th company? After a few thousand or tens of thousands of people are thrown out? Why is it that when discussing the elimination of the turnover tax, or the elimination of the tax on special constructions, the politicians who shout the loudest win? Like Adrian Câciu or Gheorghe Piperea, who tell us not to cut “taxes for the rich””Tudorescu also writes.

In the end, the economist demonstrates that it would have been more profitable for the Romanian state not to resort to the additional 1% tax.

“The logic: It's generally better to have medium or large companies that provide wages + contributions for 1,000 or 5,000 people each and pay you that 16% of the profit, than to hunt for that 1% of their turnover. The loss when you lose those 1,000 or 5,000 people is more than 1% x turnover. Or than the tax on special constructions, which are applied in some sectors. The contributions paid by that business to all budgets can be 10-15 times higher than what you hunt with those taxes that benefit the public.” concludes Cristi Tudorescu.