Tax Flash No. 1/2019 – The Emergency Ordinance no. 114

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The Emergency Ordinance no. 114 regarding the establishment of measures in the field of public investments and fiscal-budgetary measures, the amendment and completion of certain normative acts and the extension of some deadlines, was published in Official Gazette 1116/2018

The Emergency Ordinance introduces a number of measures out of which we mention the following having a significant impact from a tax perspective:

  • During the 2019 – 2028 period, natural persons who obtain salary income pursuant to an individual employment contract, ranging between lei 3,000 and lei 30,000, from employers that carry out activities in the construction field, will be exempted from paying income tax and health insurance contribution, under certain conditions. These persons will owe a social security contribution quota reduced by 3.75%. Employers will not owe the social security contribution for the salary income that is exempt pursuant to the law and will owe a reduced labor insurance contribution quota
  • The VAT reverse taxation set forth in art. 331 of the Fiscal Code, for the operations with goods and services with high risk of fraud, was extended until June 30, 2022.
  • The level of the excise duty for cigarettes and processed tobacco is increased.
  • As of 2019, a quarterly tax will be established for banking institutions, computed as a percentage applied to financial assets. The quota varies between 0.1% and 0.5%, depending on the value by which the quarterly ROBOR average exceeds the reference value of 2%.
  • As of January 1, 2019, the organizers of online gambling activities must pay a monthly tax of 2% on the total participation fees collected during the month. Moreover, the National Gambling Office will set up an activity fully financed from the annual contributions payable by the licensed organizers of gambling activities, ranging between EUR 1,000 and EUR 5,000 annually.
  • The monetary contribution due by the licenses holders in the field of electricity and heat in cogeneration for the electricity component and of natural gas is set to a level of 2% of the turnover generated by the activities covered by the licenses granted by NARE.
  • In the field of telecommunications, for granting the licenses for use of radio frequencies through competitive or comparative selection procedures, a minimum value of 2% / 4% of the turnover registered in the year preceding the prolongation, multiplied by the number of years for which the license is granted, is established.
  • Another measure having a significant impact refers to the placing a ceiling on the natural gas price. Thus, during the April 1, 2019 – February 28, 2022 period, the producers and their affiliates, that carry out both extraction activities and activities of selling natural gas extracted on the territory of Romania, must sell the natural gas to eligible suppliers and customers at a price set at the level of lei 68/MWh.

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