Amendments to the Fiscal Code

06/09/17

In brief

Government Ordinance no. 25/2017 for amending the Fiscal Code has been published in Official Gazette no. 706 dated 31 August 2017.

In detail

Title II – Corporate income tax

Expenses for alienated claims, as defined by law, are deductible up to 30% of their value.

Title IV – Personal income tax

Definition of income from self-employment

Income derived from independent activities carried out in Romania, according to the law, with the exception of intellectual property rights, is considered to be obtained from Romania, regardless of whether it is received from Romania or from abroad.

Income from intellectual property rights is considered to be obtained from Romania only if it is received from an income payer in Romania or from a non-resident through a permanent establishment created in Romania.

Income exempted from salary income tax

The category of income exempted from salary income tax includes amounts or benefits received by individuals from dependent activities carried out on board aircraft operated in international traffic, with certain exceptions.

Income from rental activities

For establishing the income tax from rental activities (either on the basis of income quotas or on the real system), in the event of cessation or temporary suspension of activity during the year, the taxpayer has to notify the competent fiscal authority about the event within 30 days as of the date of its occurrence in order to recalculate the advanced payments due within the current year.

Declaring revenue from other sources

Taxpayers who obtain income from other sources, as defined in the Fiscal Code, for which the income tax cannot be withheld at source, as well as revenues obtained from the assignment of claims by both the transfer or and the transferee, have to file the annual tax return by 25 May of the year following that in which the income was obtained.

Title V - Mandatory social contributions

Basis of calculation of mandatory social contributions

The category of income exempted from the social contributions calculation base includes the value of medical services subscription, as defined by Law 95/2006, paid by the employer for its own employees, up to the limit of EUR 400 per person per year (cumulated with voluntary health insurance premiums care according to Law 95/2006).

Title VI - Tax on income obtained in Romania by non-residents and representative offices of foreign companies established in Romania

The tax on representative offices is due by any foreign legal person with a representative office authorised to operate in Romania, according to the law. The tax is paid on an annual basis. The amount to be paid for a fiscal year is RON 18,000 (it was previously EUR 4,000).

The representative office of a foreign legal person has to declare and pay the tax to the state budget by the last day of February of the tax year.

Changes have also been made regarding the tax payment and tax return filing in the case for a representative office in Romania of a foreign legal entity established / closed during a tax year.

The provisions regarding representative offices bookkeeping requirements under the Romanian legislation in force remain unchanged.

Title VIII - Excise duties

Excise duties on gasoline (both leaded and unleaded) and diesel will be increased by RON 0.16/litre as of 15 September 2017.

Excise duties on the above fuels will then be further increased by RON 0.16/litre as of 1 October 2017.

[Source: Government Ordinance no. 23/2017, published in the Official Gazette no. 706, dated 31 August 2017]

The takeaway

Title II – Corporate income tax

The deductibility of expenses incurred for alienated claims, as defined by law, is limited to 30%.

Title IV - Income Tax and Title V - Mandatory social contributions

Amendments to Government Ordinance no. 25/2017 include the following:

  • Definition of income from independent activities obtained from Romania;
  • Inclusion of salary income earned by individuals on aircraft in international traffic as income exempted from tax in Romania, with certain exceptions;
  • Introduction of the notification obligation in the event of the cessation or temporary suspension of rental activities;
  • Specific provisions on declaring income from other sources for which the income tax cannot be withheld at source;
  • Exclusion from the basis of calculation mandatory social contributions of medical services, as defined by Law 95/2006, incurred by the employer for their own employees, within the limits provided by Law 227/2015.

TITLE VI - Tax on income obtained in Romania by non-residents and the representative offices of foreign companies established in Romania

Amendments to the tax on representative offices have been made regarding the establishment and payment of tax and filing of the tax return.

Title VIII - Excise duties

Excise duties on fuels are to be increased by RON 0.32/litre in two steps – by RON 0.16/litre as of 15 September 2017 and by another RON 0.16/litre as of 1 October 2017.

Contact us

Mihaela Mitroi

Partner, Tax Services, Romania

Tel: +40 21 225 3672

Ionuț Simion

Country Managing Partner, Romania

Tel: +40 21 225 3708

Daniel Anghel

Tax and Legal Services Leader, Romania

Tel: +40 21 225.3794

Diana Coroabă

Partner, Tax Services

Tel: +40 21 225 37 94

Ionuţ Sas

Partner, Tax Services, Romania

Tel: +40 21 225 3741

Contact us

Mihaela Mitroi

Partner, Tax Services, Romania

Tel: +40 21 225 3672

Ionuț Simion

Country Managing Partner, Romania

Tel: +40 21 225 3708

Daniel Anghel

Tax and Legal Services Leader, Romania

Tel: +40 21 225.3794

Diana Coroabă

Partner, Tax Services

Tel: +40 21 225 37 94

Ionuţ Sas

Partner, Tax Services, Romania

Tel: +40 21 225 3741

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