Summary of the main changes on tax rates and tax laws in Romania.
Find out more about current tax rates in Romania:
Romania: Tax Changes & Tax Rates with 1.1.2018
The definition of a “stock option plan” has been amended to remove the condition that the shares of the company that initiated the programme must be listed on a stock exchange.
The provisions of article 11, regarding the right to deduct expenses and VAT incurred during the period for which a taxpayer has been declared inactive or its VAT registration number has been cancelled, have been amended. These provisions are applied to beneficiaries that purchase goods/services from taxable persons declared inactive or whose VAT registration number has been cancelled and who will be able to deduct any expenses or VAT recorded during the period for which the supplier was inactive or its VAT registration number was cancelled.
As of 6 January 2017, the corporate income tax exemption has been introduced for taxpayers that exclusively perform innovation, research and development activities, as defined by Government Ordinance no. 57/2002, as well as other closely related activities. This exemption from corporate income tax is applicable during the first 10 years of activity of newly established companies subject to state aid regulations. For already incorporated taxpayers, the exemption applies for 10 years as from the date of entry into force of this Ordinance.
As of 1 January 2017, any newly established Romanian legal entity with a share capital of at least RON 45,000 may opt to become a corporate income tax payer as of its date of incorporation. Previously, for this provision to be applicable, it was necessary to have a share capital of EUR 25,000 or more.
Any existing micro-enterprise with a share capital of at least RON 45,000, as well any existing micro-enterprise that increases its share capital up to or above said threshold, may also opt to become a corporate income tax payer either as of 1 January 2017, or beginning with the first quarter in which this condition is met.
The following types of revenue have been included in the category of non-taxable revenue: scholarships, prizes and other rights in the form of accommodation, food, transport and work/safety equipment received by students during their technical and professional education in accordance with the Education Law.
The obligation on payers of salary income, as well as payers of intellectual property right income, to submit an informative statement on withholding tax and any gains/losses realised for each income beneficiary (Form 205) has been eliminated.
Gross remuneration received by daily workers is no longer subject to social security contributions in Romania. This provision already entered into force on 6 December 2016;
On 1 January 2017, a special VAT scheme for farmers will be introduced that applies to production activities and agricultural services. Among other things, farmers who use this special scheme will not be obliged to collect VAT for supplies of agricultural products and agricultural services; equally, farmers will not have the right to deduct VAT on acquisitions made under this scheme.
The provisions regarding VAT adjustments in the case of capital goods will be harmonised with the provisions of the “VAT Directive” (2006/112/CE);
On 1 January 2017, the provisions of the Fiscal Code regarding the Register of Intra-community Operators will be repealed, thus eliminating the mandatory registration with the Register of Intra-community Operators of taxpayers who perform intracommunity transactions
The provision under which the tax authorities may revoke the registration for VAT purposes of taxable persons who become temporarily inactive has been eliminated.
Important tax news from other CEE/SEE countries:
The conditions that must be met for the reactivation of inactive taxpayers in Romania have been modified. The reactivation of inactive taxpayers now no longer requires attestation by the tax authority that the taxpayer is performing its current activity at its registered headquarters, except in cases where failure to meet this condition has led to a declaration of inactivity or the taxpayer has attempted to avoid tax audits, providing information about unavailable headquarter
New provisions have been introduced regarding the moment at which the payment of a tax debt is considered to have been completed; as well as regarding the supporting documents attesting to the payment of a tax debt and the date of payment in the case of cash payments, payments performed using payment terminals, internet banking and banking cards.
The priority of the main and ancillary fiscal obligations assessed by a tax decision is now established based on the date of receipt of the tax decision by the taxpayer; previously, priority was established according to the payment due date. This provision applies to tax decisions issued as of 1 January 2017
VAT reimbursement – a new provision has been introduced whereby tax audits performed in order to solve VAT returns submitted with an option for VAT reimbursement will only cover the periods that generated the VAT subject to the reimbursement request. If, however, the tax authorities find any indications of a breach of tax legislation in respect of other periods, they may then extend the tax inspection to cover these periods as well
Are you doing business in Romania? If you have questions about the recent tax changes in Romania contact our local tax experts in Romania.