Tax Flash No. 20/2012

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Ordinance 15/2012 amending and completing the Fiscal Code was published in Official Gazette 621/2012

We hereby mention the main amendments and completions:

Corporate Income Tax

The Ordinance establishes, with effect from 1 October 2012, the right to keep the fiscal losses recovery by the entities involved in the reorganization operations, both for transactions performed between Romanian legal entities as well as for those performed by Romanian legal entities and companies of other Member States of the European Union.

Income Tax

Clarifications are brought in respect of the income tax withholding mechanism representing advanced payments, applicable in case of revenues obtained from independent activities.

VAT

  • It was introduced the VAT cash deferment system based on which the VAT chargeability occurs at the moment when the value of the deliveries / supplies performed was cashed or, in case the value of the invoices was not paid, in 90 calendar days from the issuing date of such invoices. The system is mandatory to be applied by the taxpayers who registered in the previous year a turnover below RON 2.250.000. The application of the VAT cash deferment system will be notified to the competent tax authorities by January 25th the latest, of the following year.
  • As regards 2013, the turnover to be considered will be the one recorded in the period October 1st, 2011 – September 30th, 2012 and the notification will be submitted in this respect until October 25th, 2012.
  • The Registry of taxable persons who applies the VAT cash deferment system would be organized, to be accessible on the website of the National Agency of Fiscal Administration.
  • Provisions regarding the application of the VAT cash deferment system for the invoices issued before the entry or exit to / from this system, as well as for the adjustments of the taxable base are provided.
  • The VAT deduction right related to the acquisitions performed from a taxable person who applies the VAT cash deferment system is postponed until the respective VAT is paid to the supplier / provider, irrespective of whether the beneficiary applies or not the VAT cash deferment system. The VAT deduction right shall be conditioned both by the presentation of the invoices, as well as of the proof of payment of the VAT related to the goods and / or services acquired.
  • The VAT chargeability for intra-community supplies of goods will occur only when the invoice is issued, the obligation for the issuance of invoices for the advances cashed no longer being mandatory.
  • The place of rental services of vehicles for long term, including leasing, performed to non-taxable persons, is the place where the customer is established, has his permanent address or habitual residence.
  • Clarifications regarding the cases in which the taxable persons have the obligation to issue invoices to its customers, as well as regarding the issuance of simplified invoices are introduced.
  • New information which should be mentioned on the invoices are introduced (i.e. “reverse charge” in case the customer is the person liable to pay the VAT, “VAT on cashing” for the taxable persons applying the VAT cash deferment system etc.).
  • The management control is provided as a method for ensuring the origin authenticity, the integrity of the content and the readability of the invoices. For the invoices issued by electronic means, the following can be used for this purpose: an advanced electronic signature or an electronic data interchange, means which are also applicable for the invoices issued by suppliers/providers established in countries with whom Romania does not have any legal instrument regarding mutual assistance for supplies of goods and services which take place in Romania.
  • The missing stocks will not be considered as supplies of goods for which VAT would be due, with certain exceptions (goods lost or stolen duly proved, perishable goods, technological losses, etc.) falling to VAT adjustment obligations.
  • The postponing of the VAT payment in customs for imports of goods performed by the taxpayers having obtained a VAT deferment certificate shall be extended until December 31, 2016.

The aforementioned provisions enter into force as of January 1st, 2013.

Social Security Contributions

  • The persons referred to in art. 2963 letters a) and b) of the Fiscal Code who carry on activities in Romania and obtain salary income from employers residing in third countries not covered by the European Union regulations regarding the coordination of the social security systems or in countries with which Romania has not concluded agreements or conventions on social security matters and which owe mandatory social security contributions for their employees, have the obligation to submit Form 112 “Statement regarding the social contributions and income tax liabilities and the nominal records of the insured individuals” (“Form 112”), directly or through a fiscal representative/empowered person, and to pay the individual and employer’s social security contributions, only if there is an agreement concluded in this respect with the employer.
  • The persons referred to in art. 2963 letters a) and b) of the Fiscal Code who carry on activities in Romania and obtain salary income from foreign employers without Romanian headquarters or representative office and which owe mandatory social security contributions for their employees, according to the international legal instruments to which Romania is part of, have the obligation to submit Form 112 and to pay the individual and employer’s social security contributions, only if there is an agreement concluded in this respect with the employer. If no such agreements were concluded, the employer has the obligation to pay the individual and employer’s social security contributions and to submit Form 112, directly or through a fiscal representative/empowered person.
  • The Ordinance brings clarifications regarding the computation basis and withholding mechanism of the social security contributions, for the taxpayers referred to in art. 29621, para. (1), letters f) and h) and in art. 52 para. (1), letters a)-c) of the Fiscal Code

The above mentioned provisions apply starting 1 September 2012.

Ordinance 21/2012 for suspending Law 148/2012 regarding the registration of the commercial operations through electronically means was published in Official Gazette 623/2012

According to the Ordinance, the application of Law no. 148/2012 shall be suspended until January 1st, 2013.

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