Tax Flash No. 10/2019

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Emergency Ordinance no. 43/2019  amending and completing certain normative acts regarding investment measures was published in Official Gazette 507/2019

The Emergency Ordinance amends various normative acts, including Emergency Ordinance no. 114/2018 and the Fiscal Code. Out of the significant amendments from a tax perspective, we mention the following:

  • The list of NACE codes is expanded for employers in the construction field (in order to apply for tax incentives), by including the following:
    • 2351 – Manufacture of cement;
    • 2352 – Manufacture of lime and gypsum;
    • 2399 – Manufacture of other non-metallic mineral products.
  • Details are brought regarding the application of tax incentives depending on the fulfillment of the 80% turnover criterion.

Thus, for the newly established companies and for the existing companies, that did not meet the criterion mentioned above in the previous fiscal year, the turnover is calculated cumulatively from the beginning of the year, including the month in which the exemption applies, and for existing companies which have fulfilled the criterion in the previous fiscal year, the facilities will apply throughout the current year.

  • The turnover will also include the realized and un-invoiced production.
  • It is clarified that the part of the gross monthly income exceeding 30,000 lei will not benefit from tax incentives.
  • The provisions shall enter into force 30 days after the Emergency Ordinance’s date of publication (21 June 2019).

Note: Fiscal facilities introduced by Emergency Ordinance 114/2018 for the 2019-2028 period:

The exemption from paying income tax and health insurance contribution, under certain conditions, for 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.

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 labour insurance contribution quota.

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