Government emergency ordinance no. 8/2013 for the amendment and supplementation of Law no. 571/2003 regarding the Fiscal Code and the regulation of certain financial and fiscal measures (published in the Official Gazette no. 54/23.01.2013) enters into force starting from 1 February 2013. GEO 8 introduces a number of important amendments and supplementations in the fiscal legislation. We shall further present some of the amendments related to direct taxation, respectively to social insurance:
New general rules
The fiscal authorities may refuse the application of the provisions of the double tax treaties in the case of artificial transactions. The artificial transactions are defined as those transactions lacking economic content and that may not be normally used within common economic practices, their essential scope being that of avoiding taxation or of obtaining fiscal advantages that would not have otherwise been granted.
The incomes resulting from services performed outside Romania are also considered incomes obtained in Romania.
Corporate tax
The tax payers must register in the fiscal evidence registry all the incomes obtained during a fiscal year, as well as all the expenses made with a view to obtaining these incomes (previously these provisions were encompassed in the methodological norm for the application of the Fiscal Code).
The research and development expenses are deductible in a 50% proportion at the calculation of the corporate tax (before it was 20%). Moreover, a number of additional clarifications are brought regarding the research and development activities to which the 50% deduction is applied.
The expenses registered in the accounting evidence related to corruption acts are excluded from deductibility for the calculation of the corporate tax. Also, all types of penalties owed to the public authorities, regardless of whether or not these are delay penalties, become non-deductible. The expenses with the interests pertaining to the agreements with delayed payment for the acquisition of fixed assets are not considered deductible expenses.
The investments made also in the fixed assets that form object of the deeds of in-corporation, as well as the biological assets registered by the tax payers that apply the accounting regulations according to the International Financial Reporting Standards are introduced in the category of depreciable fixed assets.
The expenses with the fiscal amortisation for the means of transportation for per-sons that have maximum 9 passenger seats, including the driver's seat, of the M1 category, are depreciable within the limit of RON 1,500 / month. For these transportation means, the amortisation according to the number of kilometres or number of functioning hours is not applicable anymore.
Income tax
According to the new regulations, the allowance received by the employees during a business delegation and detachment in a different city, within the country or abroad, will be considered income from wages and, as a consequence, will form object of the taxable incomes, for the part which exceeds 2.5 times the legal level established for the personnel from public institutions.
In the case of incomes representing wages, differences from wages, interests granted in relation thereto, as well as their update with the inflation rate, established on the basis of certain final and irrevocable court decisions, the income tax is calculated and retained at the date of performing the payment, according to the legal regulations in force at the payment date for the incomes obtained outside the main position, and is transferred by the 25th of the month following the one when they were paid.
The incomes from silviculture and pisciculture are added to the category of incomes taxable by 16%. For these types of incomes, the rules of income taxation from in-dependent activities for which the net annual income is determined in the real sys-tem, on the basis of the data from the single-entry bookkeeping, will be applicable.
The definition of incomes from agricultural activities has been extended and includes also the animal breeding and exploitation, including from the exploitation of animal products, in natural state.
Tax on the incomes of microenterprises
The companies with a turnover of maximum EUR 65,000 are obliged to pay tax on the in-comes of microenterprises.
The condition regarding the existence of a number of employees between 1 and 9 has been eliminated from the cumulative conditions for qualifying a Romanian legal person as a microenterprise.
The microenterprises that pay corporate tax and fulfil the new conditions to be qualified as microenterprises must pay income tax for the incomes obtained starting from 1 February 2013, being under the obligation to communicate to the territorial fiscal authorities the amendment of the taxation system by 25 March 2013 inclusively. By this term, the statement regarding the corporate tax owed for the taxable profit obtained between 1 January 2013 and 31 January 2013 will be filed in.
The newly founded Romanian legal persons, whose share capital is held by persons other than the state and the local authorities, must pay the tax on the incomes of microenterprises starting from the first fiscal year.
The Romanian legal persons performing activities in the banking, insurance and reinsurance sectors, capital markets sectors, with the exception of persons perform-ing brokerage activities in these sectors, as well as those performing activities in the gambling, consultancy and management sectors, are not obliged to, but may choose to apply the taxation system for the incomes of microenterprises.
Tax on the incomes obtained in Romania by non-residents
The incomes from services performed outside Romania, excluding the international transport and the performance of additional services to this transport, are also con-sidered taxable incomes in Romania.
The taxation by 10% of the incomes from interests and royalties for non-resident persons, applicable in the transition period from the accession of Romania to the European Union and until 31 December 2010, has been repealed.
With certain exceptions, the taxation quota applicable to the taxable incomes obtained in Romania by non-residents is 50% if those incomes are paid in a state with which Romania has not concluded a legal instrument on the basis of which an exchange of information may be performed.
Social security contributions
Also starting from 1 February 2013, the allowances for delegation and detachment in a different city, in the country or abroad, which exceed 2.5 times the amount established for public institutions (respectively RON 13 which is the current level in case of delegation or detachment within the country) are included in the calculation base of the mandatory social security contributions, but only for the part exceeding this limit.
Local taxes
The local public administration authorities that have registered arrears (Romanian: arierate) on 31 December 2013 will increase the level of the local taxes and fees, of the fees assimilated thereto, as well as the fines applicable starting with the year 2013.
The natural persons that have already paid the local taxes and fees for the year 2013 and that are fully paying the differences resulted from the increases of the local taxes and fees until 30 September 2013 will nevertheless benefit from the incentives for payment of local taxes and fees in advance.
Increase of the national minimum wage
Starting from 1 February 2013, the value of the national gross minimum wage will also increase. Thus, according to Government Decision no. 23/2013 for establishing the national gross minimum wage guaranteed for payment, the increase will be done in two phases: from 1 February 2013, the minimum wage will increase from RON 700 to RON 750 (for a full-time working schedule of 168.667 hours in average per month in the year 2013, representing RON 4.44 / hour), whereas from 1 July 2013, the minimum wage will be of RON 800 (for a full-time working schedule of 168.667 hours in average per month in the year 2013, representing RON 4.74 / hour).
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
