New amendments in Romania have been introduced to the Fiscal Code affecting the following tax areas:
- corporate income tax
- micro-enterprise tax
- income tax
- social security contributions
- excise duties
Attention! Most of the Romanian tax changes come into force in July 2017. By way of exception, some of these amendments will enter into force at the beginning of October 2017/January 2018.
Our Romanian tax experts from TPA Romania have described the most important tax changes.
1. Micro-enterprise tax
Taxpayers subject to the law regarding the specific tax on hotels and restaurants and which on 31 December 2016 reported total revenues of between EUR 100,001 and EUR 500,000, while also fulfilling the other conditions regarding the micro-enterprise regime, will be obliged to pay the micro-enterprise tax as of August 2017.
2. Income tax
Subscriptions for medical services paid by employees up to an annual limit of EUR 400 are, together with voluntary health insurance premiums, to be considered non-taxable income.
3. Social security contributions
In respect of gross monthly incomes of whose level is below the minimum wage per country, representing the computation basis for the individual social security contribution, obtained by the means of a full time / part time labour contract, the income considered to establish the monthly basis for the social security contribution due by employers is at the level of the minimum wage per country;
Employers are exempt from these provisions for the duration of the period when their employees fall into specific categories (i.e. while they are students, interns);
These amendments will enter into force on 1 August 2017 and will apply starting with revenues derived in August.
4. VAT in Romania
VAT adjustments in Romania
Clarifications have been introduced regarding the VAT adjustments to be performed following the bankruptcy of a beneficiary or the implementation of a reorganisation plan under which the creditor’s receivable is changed or eliminated. More precisely, VAT adjustments are to be made within 5 years from 1 January of the year following that in which a court decision regarding the bankruptcy/approval of the reorganisation plan for the beneficiary was issued;
Registration for VAT & VAT numbers in Romania
The concept of fiscal risk analysis has been introduced in respect of registration for VAT purposes and the cancellation of VAT numbers. The criteria for assessing fiscal risk will be established by an order issued by the tax authorities, thus ensuring transparency. As a result, no further reference to the assessment of the intention and ability of the taxable person to carry out economic activities is included within the provisions of the Fiscal Code;
The amendments of the VAT in Romania will come into force in October 2017.
5. Excise duties
- Excise duty on cigarettes will increase during the period 1 July 2017-31 March 2018 from RON 329,222 per 1,000 cigarettes (as stipulated by Order no. 350/2017 approving the level of excise duty on cigarettes) to RON 333,582 per 1,000 cigarettes;
- Excise duties on other products subject to the harmonised excise duty regime (e.g. energy products, alcohol) are to remain unchanged until 2022.
6. Physical security assessment for companies
As of 1 July 2018, all companies established before 16 June 2012 will be required to conduct a physical security assessment using the services of professional evaluators.
For companies established after 16 June 2012 it is already mandatory to have performed said physical security assessment.
Currently, performance of a physical security assessment is mandatory for:
- companies established under Law no. 31/1990 (Companies Law) and irrespective of the nature of their share capital, as well as
- other organisations that hold assets or valuables of any kind and which are obliged to ensure the security thereof.
This obligation also applies to ministries and other specialised bodies of central and local public administration, autonomous administrations, national companies, national research and development institutes in Romania.
Physical security assessments were supposed to have become mandatory for all companies incorporated before 16 June 2012 on 1 July 2017, given that all entities set up after this date already have this obligation. However, the Romanian Government approved the postponement of this obligation for another year, citing, among other reasons, the insufficient number of experts in this field.
Are you doing business in Romania?
Contact Claudia Stanciu, Tax Advisor in Romania
- All you need to know about tax rates and fiscal changes in Romania: Tax Update Romania 2017
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