NNDKP Tax Flash No. 3/2023 – Law no. 296/2023 regarding budgetary measures to ensure Romania’s long-term financial sustainability was published in the Official Gazette no. 977/2023
Corporate income tax
As of 2024, taxpayers that register in the previous year a turnover of over EUR 50 million and determine a profit tax, accumulated from the beginning of the fiscal year/amended fiscal year until the end of the calculation quarter/ year, lower than the minimum tax on turnover are obliged to pay profit tax at the level of the minimum turnover tax.
The minimum turnover tax is calculated according to the formula IMCA = 1%*(VT – Vs – I – A), where:
- VT represents total revenues, determined as from the beginning of the amended fiscal year/fiscal year to the end of the calculation quarter/year
- Vs represents revenues that are subtracted from total revenues, determined cumulatively from the beginning of the fiscal year to the end of the quarter/year of calculation, and includes: (i) non-taxable income referred to in art. 23 and 24 of the Tax Code; (ii) revenue related to the costs of inventory; (iii) revenues related to costs of services in progress; (iv) income from the production of tangible and intangible assets which are not included in the “I” indicator; (v) income from subsidies; (vi) income from compensation from insurance/reinsurance companies; (vii) revenues representing excises that were simultaneously reflected in expense accounts.
- I represents the value of works in progress related to the acquisition/production of assets made starting 1 January 2024;
- A is the accounting depreciation of assets purchased/produced after 1 January 2024.
When determining the I and A indicators, the assets taken into account will be established by an Order of the Ministry of Finance.
If after applying the calculation formula for determining the minimum turnover tax the result is negative, the minimum tax is zero.
The minimum turnover tax is determined before the recovery of the tax loss from previous years if the cumulative tax result at the end of the quarter/year of calculation is a tax loss.
The minimum turnover tax does not apply to economic operators that exclusively carry out activities of distribution/supply/transport of electricity and natural gas, nor to credit institutions or for economic operators in the oil and natural gas sectors, for the latter ones the taxes detailed below being applicable.
Additional tax for credit institutions
As of January 1, 2024, an additional tax is established for credit institutions – Romanian legal entities and branches in Romania of credit institutions that are foreign legal entities. These credit institutions will owe, in addition to the corporate income tax, a turnover tax calculated by applying the following rates on the calculation basis provided by the law:
- 2% for the period January 1, 2024 – December 31, 2025;
- 1% starting January 1, 2026.
The turnover tax is a non-deductible expense when calculating the fiscal result.
Additional tax for legal entities carrying out activities in the oil and natural gas sectors
Starting January 1, 2024, an additional tax is established for legal entities that carry out activities in the oil and natural gas sectors and that register a turnover of more than 50 million euros in the previous year.
The minimum turnover tax is calculated according to the formula: ICAS= 0.5% x(VT-Vs-I-A), where:
- ICAS – specific turnover tax, determined cumulatively from the beginning of the fiscal year to the end of the quarter/calculation year
- VT– total revenues, determined cumulatively from the beginning of the fiscal year to the end of the calculation quarter/ year
- Vs– revenues that are subtracted from total revenues, determined cumulatively from the beginning of the fiscal year to the end of the quarter/calculation year, representing: (i) non-taxable revenues, (ii) revenues related to the costs of products inventory, (iii) revenues related to the costs of services in progress, (iv) income from the production of tangible and intangible assets, which are not included in indicator “I”, (v) income from subsidies, (vi) income from compensation from insurance/reinsurance companies (vii) revenues representing excise taxes that were simultaneously reflected in the expense accounts;
- I– the value of fixed assets in progress caused by the execution/production of assets, recorded in the accounting records starting January 1, 2024
- A – accounting depreciation at the level of the historical cost related to assets purchased/produced starting January 1, 2024.
The turnover tax is a non-deductible expense when calculating the fiscal result.
Microenterprise income tax
As of January 1, 2024, micro-enterprises that have a turnover over EUR 60,000 or carry out activities in the nature of software creation, catering, restaurants, bars, legal activities of notaries and lawyers, medical assistance, will be subject to a tax rate of 3%, and the rest of the micro-enterprises will be subject to a 1% tax rate.
Starting with the income related to the month of November 2023, the income tax exemption granted to natural persons, for the income obtained from wages and income assimilated to wages as a result of carrying out the activity of creating computer programs, applies to a single employer/payer, only for incomes up to RON 10,000, the part of the gross monthly income that exceeds RON 10,000 not benefiting from tax exemptions.
The income tax exemption granted to individuals, for the salary income or income assimilated to salaries as a result of carrying out activities in the field of construction, applies to a single employer/payer, for incomes up to RON 10,000, the part of the gross monthly income that exceeds RON 10,000 not benefiting from tax exemptions.
The income tax exemption granted to individuals, for the salary income or income assimilated to salaries as a result of carrying out activities in the agricultural field/ sector and in the food industry, applies to a single employer/payer, for incomes up to RON 10,000, the part from the gross monthly income that exceeds RON 10,000 not benefiting from tax exemptions.
Starting with the income related to the year 2024, the social health insurance contribution will be deductible when calculating the taxable base for the income from independent activities.
As of June 1, 2024, any income found by tax authorities without identifiable sources will be subject to an income tax of 70%.
Social security contributions
Starting with the incomes related to the month of November 2023, the exemptions from the payment of health contributions for the incomes derived by individuals carrying out activities in the construction sector, in the agricultural sector and in the food industry will be eliminated.
Starting with the income related to the year 2024, the social health insurance contribution for income from independent activities is due at the level of the income earned, within the limit of 60 national gross minimum wages. For the other income categories, the existing ceilings remain in force.
Meal vouchers are subject to social health insurance contribution.
The following operations will be subject to a reduced 9% VAT rate (currently being subject to a reduced 5% VAT rate):
- the supply of dwellings as part of social policy, including the land on which they are built;
The threshold of RON 600,000 remained unchanged;
The definition for “dwellings that at the time of delivery can be lived in as such” was revised, additional criteria being included;
The reduced VAT rate of 5% is maintained between January 1st and December 31, 2024, for agreements concluded between January 1st and December 31, 2023 in relation to the advance payment for the purchase of a dwelling;
- the supply and installation of photovoltaic panels, solar thermal panels, heat pumps and other high-efficiency heating systems.
The affidavits provided by the law for the application of the reduced VAT rate are amended;
- services regarding access to fairs, amusement parks and recreational parks, as well as those regarding access to sports events.
- the delivery of high-quality food (e.g., mountain, eco, traditional products), with the exception of alcoholic beverages, non-alcoholic beverages falling within CN code 2202 and food with added sugar. The supply of the latter will be subject to the standard 19% VAT rate.
The VAT exemption with deduction right applicable to some operations carried out for hospital units from the public state network is removed.
The above provisions shall apply starting January 1, 2024.
Starting July 1st, 2024:
- For the operations carried out between taxable persons established in Romania, only invoices that meet the conditions provided by Government Emergency Ordinance no. 120/2021 regarding the RO e-Invoice system will qualify as invoices.
- The use of the electronic invoice RO e-Invoice is not subject to the acceptance of the recipient.
Excise duties on alcohol and alcoholic beverages, as well as those on processed tobacco, increased.
Special tax on immovable and movable assets of high value
Starting January 1, 2024, residential buildings in Romania, owned/jointly owned by individuals, with a calculated taxable value over RON 2,500,000, will be subject to a 0.3% tax rate on the difference between the taxable value of the building communicated by the local fiscal authority through the tax decision and the RON 2,500,000 ceiling.
Starting January 1, 2024, cars registered in Romania, owned by individuals or legal entities, whose individual purchase value exceeds RON 375,000, will be subject to a 0.3% tax rate on the difference between the purchase value and the RON 375,000 ceiling.
RO E-INVOICE SYSTEM
In the period January 1, 2024 – June 30, 2024, taxable persons established in Romania, irrespective of being VAT registered or not, have the obligation to submit invoices in the RO e-Invoice system, for B2B/public institutions transactions (others than B2G) that have the place of supply in Romania, irrespective of the beneficiaries being or not registered in the RO e-Invoice Register.
At the same time, starting January 1, 2024, taxable persons not established, but registered for VAT purposes in Romania, have the obligation to submit the invoices issued in the RO e-Invoice system for the B2B transactions with the place of supply in Romania, regardless of whether or not the recipients are registered in the RO e-Invoice Register.
Exempted exports and intra-community supplies of goods do not fall under the above rules.
The previously mentioned suppliers have the obligation to send invoices to the recipients in accordance with the provisions of the Fiscal Code, unless both the supplier and the recipient are registered in the RO e-Invoice Register.
The deadline for submitting invoices in the RO e-Invoice system is of 5 working days from the date of issuing the invoice, but no later than 5 working days from the deadline provided by the Fiscal Code for issuing the invoice (i.e., 15 of the month following the one in which the supply occurred).
Non-compliance with the deadline for submitting invoices in the RO e-Invoice system constitutes a contravention and is sanctioned with a fine from RON 1,000 to RON 10,000 depending on the category of taxpayer, starting 1st of April 2024.
The above provisions shall apply starting 1st of January 2024.
Starting 1st of July 2024, the receipt and registration by taxable persons established in Romania of invoices issued by economic operators established in Romania, in the B2B relationship, in a way other than through the RO e-Invoice channel, is sanctioned with a fine equal to the VAT amount on the invoice received.
To ensure compliance with the traceability of road transport of goods on the territory of Romania, the National RO e-Seal System has been established.
In case of the application of smart seals on the means of transport, the driver has the obligation to ensure their integrity, and non-compliance can be sanctioned with a fine from RON 20,000 to RON 50,000.
The provisions related to the RO e-Seal enter into force in 15 days after the date of publication of this law in the Official Gazette of Romania.
Measures to combat tax evasion
It is forbidden for persons who are not fiscally registered to carry out economic activities.
It is prohibited to carry out economic activities involving goods that are not accompanied by documents of provenance, regardless of where they are during transport, storage or marketing.
Cash and cash substitutes for which legal documents of provenance are not presented are considered assimilated to goods whose provenance is not proven.
If the above facts are not considered infringements according to the criminal law, they constitute misdemeanors and are sanctioned with a fine from RON 2,000 to RON 15,000 in the case of natural persons, and from RON 5,000 to RON 35,000 in the case of legal persons.
If within a period of 12 months from the date of application of a fine a new offense is committed, a fine from RON 4,000 to RON 30,000 will be applied in the case of natural persons, and from RON 10,000 to RON 60,000 in the case of legal entities, and a complementary sanction consisting in the suspension of the activity for a period of 15 days will be applied.
Law no. 70/2015 for strengthening financial discipline regarding collection operations and pay in cash
The ceilings for payments in cash made by legal entities, authorized individuals, individual businesses, family businesses, freelancers, individuals carrying out activities independently, associations and other entities with or without legal personality have been reduced from 5,000 RON/day to 1,000 RON/day.
Fragmented cash receipts from beneficiaries for invoices whose value is greater than RON 1,000 and RON 2,000, respectively, in the case of cash and carry stores, are prohibited as well as the fragmentation of invoices for a supply of goods or services whose value is greater than RON 1,000, respectively RON 2,000.
Cash receipts and payments operations between commercial companies and individuals, representing the consideration for supplies or purchases of goods or services, dividends, assignments of claims or other rights and receipts or refunds of loans or other financing must be carried out within the daily ceiling of RON 5,000 to/from one person, until December 31, 2024 and RON 2,500, starting from January 1, 2025.
Cash collection and payment operations between individuals, other than collection and payment operations carried out through institutions that provide payment services authorized by the National Bank of Romania or authorized in another member state of the European Union and notified to the National Bank of Romania , as per the law, carried out as a result of the transfer of ownership over certain goods or rights, of the provision of services, as well as those representing the granting/repayment of loans, can be carried out within the limit of a daily ceiling of RON 10,000/transaction until December 31, 2024 and RON 5,000/transaction starting January 1, 2025.
Cash collections and fragmented payments are prohibited for transactions greater than RON 10,000 until December 31, 2024, and greater than RON 5,000 starting with January 1, 2025, and so is the fragmentation of a transaction greater than RON 10,000 until December 31 2024, and greater than RON 5,000 starting January 1, 2025.
A cash ceiling of RON 50,000 is established at the level of a cashier.
Exceeding the ceilings, if it was not committed under such conditions that, according to the criminal law, constitute criminal infringement, is subject to a fine amounting to 25% of the amount that exceeds the established ceiling, but not less than RON 500.
Accounting Law no. 82/1991
Starting with the annual financial statements related to the financial year of 2023, legal entities without patrimonial purpose which, in the reporting financial year, received amounts representing subsidies, sponsorships, amounts redirected, according to the law, from the profit tax, the tax on the income of micro-enterprises, respectively from the income tax owed by natural persons, as well as other similar forms of financing, which cumulatively exceed the amount established by order of the Minister of Finance, will draw up a statement that accompanies the financial statements and highlights the amounts thus received, respectively used.
The annual financial statements of legal entities without patrimonial purpose, together with the mentioned declaration, are subject to an external audit carried out by a financial auditor, a member of the Romanian Chamber of Financial Auditors, and the format of the declaration as well as the cumulative value of the said amounts received are to be approved by order of the Minister of Finance issued within 60 days from the date of entry into force of this law.
Within 15 days from the publication of this law, the contraventions provided by the Accounting Law will be significantly increased:
- The possession, under any title, of elements of the nature of assets and liabilities, as well as the performance of economic-financial operations, without being recorded in the accounting, will be subject to a fine ranging from RON 2,000 to RON 20,000.
- Failure to comply with the regulations regarding: the use and keeping of accounting records; the drawing up and use of supporting and accounting documents for all operations carried out, their accounting in the period to which they refer, their keeping and archiving, as well as the reconstruction of lost, stolen or destroyed documents will be subject to a fine from RON 2,000 to RON 20,000.
- Failure to comply with the regulations regarding the preparation, signing and submission to the Ministry of Finance and its territorial units, as well as to hierarchically superior public institutions, of the quarterly and annual financial statements of public institutions, will accordingly be subject to a fine from RON 3,000 to RON 6,000 lei.
- Failure to comply with the regulations regarding the inventory will be subject to a fine from RON 3,000 to 20,000.
Ordinance no. 2/2001 regarding the legal regime of contraventions
Within 15 days from the date of publication of this law in the Official Gazette, by derogation from the provisions of art. 16 paragraph (1) and art. 28 paragraph (1), the possibility to pay within 15 days from the handing over or communication of the minutes, of half of the minimum fine provided by the normative act will no longer exist for the contraventions provided by the following normative acts: Law no. 207/2015 regarding the Fiscal Procedure Code, Law no. 227/2015 regarding the Fiscal Code, Accounting Law no. 82/1991, Law no. 70/2015 for strengthening financial discipline regarding cash receipts and payments operations, GEO no. 28/1999 regarding the obligation of economic operators to use electronic fiscal marking machines, GEO no. 41/2022 for the establishment of the RO e-Transport national system for monitoring the road transport of goods with high fiscal risk.
Electricity and natural gas law no. 123/2012
The royalty paid for the gas transport concession increased from 0.4% to 10%.
Companies Law no. 31/1990
The deadlines for publishing the lists of companies that will be dissolved or deregistered by the National Office of the Trade Registry from the Trade Registry’s Electronic Bulletin, have been extended from 15 to 60 days. In addition, a period of 45 days has been established from the publication/transmission of the lists, during which NAFA can postpone the initiation of such actions and/or appoint a liquidator if the respective companies are undergoing a fiscal audit or register outstanding budgetary obligations.
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