Tax Flash No. 10/2016

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Emergency Ordinance no. 84/2016 amending and completing certain normative acts in the fiscal-financial sector was published in the Official Gazette 977/2016.

The main amendments brought to the Fiscal Code and to the Fiscal Procedure Code are:

FISCAL CODE

General provisions

  • The requirement that the shares  should be admitted to trading on a regulated market or traded on an alternative trading system for a company to initiate a stock option plan program was removed.

Corporate income tax

  • Clarifications are introduced regarding the establishing of the amended fiscal year in accordance with the taxpayers’ option.
  • The time limit (31 December 2016) for the application of the fiscal incentive regarding the tax exemption for reinvested profit is eliminated. The incentive also applies for the right to use IT programs.
  • The amendments define the functions of management and administration in relation to which non-deductible expenses related to non-taxable income are established. The specific non-taxable revenue for which such expenses are not allocated are also defined.

Microenterprise income tax

  • The share capital threshold for taxpayers that may opt to pay profits tax decreases from EUR 25,000 to RON 45,000 (approximately EUR 10.000).

Income tax

  • Payers of income from salaries and assimilated to salaries will no longer be required to submit form 205 “Informative statement regarding the withheld tax and the gains/losses realized, per income beneficiaries” for the income derived starting 2017.

Social security contributions

  • Social contributions for the amounts representing difference of income from salaries established by law for previous periods shall be calculated and withheld at the payment date; the payment and declaration deadline is by the 25th of the following month (i.e. after the amounts were paid).

VAT

VAT aspects regarding the operations carried out by/with taxable persons having the VAT code cancelled.

  • The inactive taxpayers, taxable persons established in Romania, as well as taxpayers to whom the VAT registration was cancelled, according to art. 316 par. (11) letter c) -e) and h), and who re-register under art. 316 paragraph (12) can:
    • deduct the value added tax related to the goods / services purchased during the period when the VAT number was cancelled, even if the invoice does not include the VAT code;
    • issue invoices for the supplies of goods / or services performed during the period in which the VAT code was cancelled, mentioning separately the value of the output VAT and which will not be included in the VAT return statement;
  • The beneficiaries who purchased goods and services from suppliers having the VAT code cancelled, as mentioned above, can deduct the related VAT based on invoices issued after the re-registration.

VAT adjustment for the capital goods

  • Starting with 1st January 2017 the VAT adjustment for the capital goods shall be made annually, within the adjustment period, for 1/5 or 1/20 of the tax initially deducted for the acquisition, production, construction of those assets, in certain circumstances, specifically mentioned.

The special scheme for farmers

  • Starting with 1st January 2017 the special scheme for farmers is introduced for individual farmers, individual companies or family businesses carrying out agricultural activities/services.
  • The percentage of flat-rate compensation for covering the tax related to the acquisitions is set to 1% for 2017, 4% for 2018, and 8% starting with 2019.
  • The special regime for farmers is optional, the formalities regarding the application and / or waiver of this regime being specifically mentioned within the Fiscal Code.
  • In case of performing intra-Community supplies, the farmers applying the special regime are required to ask for the special VAT registration. The taxable persons registered for VAT purposes who want to apply the special regime for farmers, may ask for cancelling the VAT registration.

VAT compliance

  • The provisions related to the Registry of Intra-Community Operators are repealed;
  • The requirement to submit some informative statements (392A, 392B and 393) are suspended until 31 December 2019;
  • The VAT registration shall not be cancelled in case of temporary inactivity registered at the Trade Registry.

Fiscal Procedure Code

  • Amendments and completions are made in respect of the conditions for the taxpayers’ reactivation, depending on the reason they were declared inactive.
  • New documents based on which the performance of payment and the date of payment may be proved were specified.
  • In case of anticipated tax audit, such will regard exclusively the fiscal periods in which were conducted the operations generating the VAT negative balance, being extended if there are indications of legislation violations.
  • The order of settlement of the main fiscal obligations and of the ancillary fiscal obligations set by the competent fiscal authority is dependent of the moment when they arise based on the date they were communicated to the taxpayer.
  • A 30-day term was established for appealing to the competent administrative court against the decision ordering precautionary measures, without the necessity of the preliminary procedure.
  • Throughout the period of suspension of forced execution, for the fiscal liabilities that are subject to suspension, the fiscal authority does not issue and does not communicate decisions on ancillary fiscal obligations.
  • New rules are established regarding the specialized structures responsible for the resolution of appeals.
    The provisions of the Council Directive 2015/2376/EU amending Directive 2011/16/EU regarding the mandatory automatic exchange of information on fiscal matters are implemented.

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