Tax Flash No. 2/2019

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Law no. 30/2019 for the approval of Government Emergency Ordinance no. 25/2018 regarding the amendment of certain normative acts, as well as for the approval of certain budgetary fiscal measures, was published in Official Gazette no. 44/2019

Profits Tax

The main amendments consist of the following:

  • Increase of the deductible threshold for which taxpayers have the right to deduct the exceeding borrowing costs, from EUR 200,000 to EUR 1,000,000.

For the exceeding borrowing costs above the aforementioned deductible threshold, an increase of the deductibility limit from 10% to 30% applied on EBITDA adjusted for tax purposes, defined according to the law, is provided; these provisions shall apply starting 1 January 2019.

  • Introduction of the obligation and conditions of registration in the Registry of entities / worship units for which fiscal deductions are awarded, applicable for entities without patrimony purpose, including worship units, with the view of granting the tax deduction for taxpayers incurring sponsorship expenses in relation to such entities/units; this provision shall enter into force on 1 April 2019;

Income tax

  • Revenues from transfer of virtual currency are included in the income from other sources category.

The taxation basis for the computation of the income tax related to the transfer of virtual currency is established, respectively as the positive difference between the sale price and the acquisition price, including the direct costs related to the transaction. Moreover, a non-taxable threshold of RON 200/transaction is provided, applicable if the total winnings gained in a fiscal year do not exceed RON 600.

VALUE ADDED TAX

Adjustment of taxable amount

  • Changes are brought regarding the adjustment of the taxable amount in case of receivables that cannot be recovered following the bankruptcy of the beneficiary. The adjustment of the VAT will be allowed from the date of bankruptcy (and not from the date of bankruptcy completion). The VAT adjustment for bankruptcy decisions issued before 1st of January 2019 (within 5 years from 1 January 2019) will also be allowed.

VAT rate

  • The criteria for applying the VAT reduced rate of 5% for the delivery of housing as part of social policy to individuals is simplified. The most important change refers to the removal of the restriction to purchase a single dwelling with a 5% reduced rate.

These amendments shall apply starting 1 January 2019.

Fiscal Procedure Code

The main amendments consist of the following:

  • Introduction of the notion of administrative procedures for tax receivables, differentiated based on the classification of taxpayers under fiscal risk classes / subclasses. Thus, according to a tax analysis, the taxpayers will be classified into 3 main risk classes (low, medium and respectively high tax risk). Also, the classification in tax risk classes / subclasses will be determined based on criteria regarding:
  • tax registration;
  • submission of tax returns;
  • declaration level;
  • fulfilment of the payment obligations to the general consolidated budget and to other creditors.

The procedures for determining the subclasses and sub-criteria, as well as the administration procedures corresponding to each tax risk class / subclass will be established through Orders issued by ANAF.

  • Introduction of a mediation procedure in the case of forced execution measures.

The mediation procedure consists of:

  • clarification of the extent of the fiscal obligation inscribed in the summons, if the debtor has objections to it;
  • analysis performed by the fiscal authority together with the debtor regarding the debtor’s economic and financial status, in order to identify optimal solutions for settling fiscal obligations, including the possibility of benefiting from payment facilities provided by the law.

The mediation procedure will be approved through an Order issued by ANAF.

  • The fiscal obligations determined in fiscal administrative acts appealed according to the law, which are guaranteed according to art. 210-211 or art. 235 do not represent outstanding fiscal obligations, as such are defined in the Fiscal procedure code.
  • Introducing the possibility of suspending the forced execution for tax receivables determined in appealed fiscal administrative acts, by means of guarantee other than a letter of guarantee / insurance policy of guarantee.

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