Romania: Amendments of Fiscal Code

03.04.2018

1. Government Emergency Ordinance no. 25/2018 regarding the amendment of the Fiscal Code and other laws was published in the Official Gazette no. 291/30 March 2018

The main amendments are outlined below.

Microenterprise tax

  • Any company with share capital of at least RON 45,000 and at least two employees can opt, only once, to become a profit taxpayer starting with the quarter when these conditions are fulfilled cumulatively. The status as “employee” presumes that the person has been hired based on a labour agreement with full working hours or that several persons work part time if the total of the part time working hours is equivalent to full working hours. An “employee” can also be a person with whom the company enters into an administrator or mandate agreement concluded according to the law if the remuneration mentioned in this agreement is at least the gross minimum wage at national level. The modification entered into force on 1 April 2018.
  • Thus, a company can opt for profit taxpayer status (16% profit tax rate applied to its taxable profits) instead of microenterprise taxpayer status (1% or 3% tax rate applied to its revenue). If such option is not exercised, any company with annual revenues less than or equal to EUR 1,000,000 (RON equivalent) must pay 1% tax on its revenue if it has employees or 3% if it has no employees.
  • Microenterprise taxpayers that sponsor non-profit or charitable entities authorized to provide  social services and accredited with at least one licensed social service, can deduct up to 20% of their microenterprise tax in the quarter when the sponsorship is performed. Amounts not deducted can be carried forward for a period of 28 consecutive quarters. The modification entered into force on 1 April 2018.
  • Microenterprise taxpayers must submit an informative return regarding the recipients of their sponsorship generally by 25 January of the year following the year when the sponsorship was performed. The prescribed form for the informative return is not published at the present date. The modification entered into force on 1 April 2018.

Profit tax

  • Profit taxpayers granting sponsorship are compelled to submit an informative return regarding the recipients of sponsorship and/or patronage or private scholarships (i) by 25 March of the year following the year when the sponsorship was granted or (ii) until the 25th of the third month following the closing of the fiscal year for taxpayers with a fiscal year different from the calendar year. The form prescribed for the informative return is not published at the present date. The modification entered into force on 30 March 2018.

2. Government Ordinance no. 25/2017 regarding amendments of the Fiscal Code was approved with amendments by Law no. 72/2018, published in the Official Gazette no. 260 / 23 March 2018.

The main amendments are outlined below.

Profit tax

  • A new deduction rule was initiated for assigned/sold receivables in a loss position. Thus, the net loss (the difference between the sale price of the receivables and the value of the assigned receivable/its acquisition cost) is deductible up to 30% of the value of such net loss. The modification entered into force on 26 March 2018.

VAT

  • The VAT threshold for registration for VAT purposes was increased from EUR 65,000/RON 220,000 to EUR 88,500/RON 300,000. The modification entered into force on 1 April 2018.