Government Emergency Ordinance (GEO) no. 3/2017 has been published, bringing a series of modifications and amendments to Law 227/2015 concerning the Fiscal Code.
Law 227/2015 concerning the Fiscal Code has been amended and supplemented as follows:
Taxpayers which exclusively perform innovation and R&D activities as defined by Government Ordinance 57/2002 on scientific research and technological development, as amended and supplemented, and related activities, are exempted from corporate income tax for the first 10 years of activity.
The condition regarding the maximum revenues of a company for being considered a microenterprise has been changed, increasing the threshold to EUR 500,000.
A new rule has been introduced regarding the classification of a company as a microenterprise for fiscal purposes. Thus, for 2017, Romanian companies which are corporate income tax payers and as at 31 December 2016 fulfil the conditions for being a microenterprise as defined by Law 227/2015 become subject to tax for microenterprise revenues as of 1 February 2017. They also have the following obligations:
The tax rates used as of 2017 for microenterprise income tax have been changed as follows:
Individuals deriving salary income and income treated as such are exempted from income tax, provided they perform activities based on individual employment contracts concluded for a 12-month period with Romanian legal entities that perform seasonal activities as stipulated by Law 170/2016 regarding the tax on specific activities.
Medical services provided by means of subscription, as defined by Law 95/2006 regarding healthcare reform, and which are borne by the employees are deductible for income tax purposes, up to the limit of the RON equivalent of EUR 400 per year.
Upon the transfer, by legal deeds inter vivos, of the property right and its dismemberments, on constructions of any kind and on the related land, as well as on land of any kind without constructions, the income tax due is assessed by applying a tax rate of 3% on the taxable income. The taxable income is assessed by deducting the non-taxable amount of RON 450,000 from the value of the transaction.
The following social contributions calculation caps are repealed beginning with February 2017 salary income and income treated as such:
The cap represented by the amount of five times the average gross salary income used for assessing the health insurance contribution due for investment income and income from other sources has been repealed.
Individuals deriving investment income and/or income from other sources do not owe the health insurance contribution for the respective income if they derive other types of income (e.g. salary income, income from the pursuit of self-employment activities, pensions or income from the pursuit of agricultural activities).
[Source: Government Emergency Ordinance no 3/2017 published in the Romanian Official Gazette no. 16 on 6 January 2017]
For a more detailed discussion of the impact that these provisions can play in your specific case, you can contact the following persons: