Amendments to the Tax Legislation in Romania

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Published in International Tax Review, 2009

Recent changes to the Romanian tax legislation are mainly aimed at alleviating the effects of the economic and financial crisis on taxpayers’ cash-flow.

Deferral of tax liabilities
Upon their request, taxpayers may be granted a deferral of tax liabilities, subject to certain conditions being met. In order to benefit from and maintain this incentive, taxpayers must fulfill certain criteria such as: they should have submitted all tax returns in due time, they should establish a guarantee covering both the deferred liabilities and the late payment liabilities due for the deferral period, they should pay their tax liabilities in due term and so on). The tax incentive is granted only once in a calendar year and the deferral period cannot exceed six months. Late payment liabilities are due throughout the deferral period, however the forced execution is stopped (it will be started/resumed after the expiry of the deferral period or in case the incentive is cancelled due to the taxpayer’s non-compliance). This incentive is applicable until June 30 2010.

VAT reimbursement
New elements have been introduced in the methodology for resolving VAT reimbursement requests, with the view to accelerating the VAT reimbursement and settlement process:
• A deadline of 45 days has been set for cross tax audits; in justified cases this deadline can be extended by another 45 days;
• If the taxpayer for which a reimbursement decision has been issued has outstanding tax liabilities, the tax authority will perform the offset automatically;
• The taxpayers’ refund rights can be assigned to a third party after being assessed by the tax authority.The assignment takes effect after the assignee notifies the relevant tax authority on the assignment.

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