How is the 20% of profit tax a company can redirect to an NGO calculated?

The 20% does not apply on its own: the company computes two ceilings and deducts the lower one. It is the most frequently misunderstood funding mechanism for Romanian NGOs.

Short answer

The company deducts from its profit tax the lower of 0.75% of turnover and 20% of the profit tax due.
Both ceilings are computed, and the company applies the smaller one.
The beneficiary NGO must be listed in the Register of entities/religious units on the date the sponsorship contract is signed.
Amounts not deducted are no longer carried forward over the next 7 years, because the carry-forward was repealed.
Recovery is done by redirection, using form 177, by the filing deadline of the annual profit-tax return 101.

What the law says

Fiscal Code art. 25 para. (4) letter i): the deduction is the lower of 0.75% of turnover and 20% of the profit tax due.
Sponsorship is governed by Law 32/1994; the mechanism covers sponsorship and patronage.
Plain donations are not deductible and generate no tax credit.
Form 177 follows the procedure approved by ANAF Order 3562/2024, due on the filing date of return 101 — 25 June 2026 for tax year 2025.
If the profit tax is unpaid 45 days after the deadline, the redirection request is rejected automatically.
The informative return 107 (ANAF Order 355/2024) is filed from 2025 only by profit-tax payers, by 25 June of the following year.

Worked examples

In each example both ceilings are computed and the lower one is retained.

Turnover 2,000,000 lei, profit tax 60,000 lei: 0.75% of turnover = 15,000 lei, 20% of the tax = 12,000 lei, so 12,000 lei is deducted.
Turnover 800,000 lei, profit tax 100,000 lei: 0.75% of turnover = 6,000 lei, 20% of the tax = 20,000 lei, so 6,000 lei is deducted.
The same company, if it sponsored 20,000 lei: it deducts 6,000 lei, and the remaining 14,000 lei is not carried forward.
Turnover 5,000,000 lei, tax 120,000 lei: 0.75% = 37,500 lei, 20% = 24,000 lei, so the ceiling is 24,000 lei.

Common mistakes

The company computes only 20% of the tax and ignores the 0.75%-of-turnover ceiling, which can be lower.
The contract is signed before the NGO is in the Register of entities, and the tax credit is lost for good.
The unused amount is expected to be carried forward over the next 7 years, although that rule was repealed.
A micro-enterprise sponsors believing it deducts 20% of its tax: the micro-enterprise tax credit was repealed as of 2024.
A company tries to redirect the minimum turnover tax, which cannot be redirected; in 2026 it applies only to companies with revenue above EUR 50 million and was cut from 1% to 0.5%.

How 4ong helps

Keeps sponsorship contracts with their signing date, the proof you were in the Register at that moment.
Shows, for each sponsor, the contracted amount and the amount actually received, per tax year.
Links the sponsorship to the project and budget line it funds, ready for the funder report.
Flags sponsors paying micro-enterprise tax, who no longer get a fiscal benefit.