Legislative summary – January 2018

Tax Forms

Approving the template and the content of Forms 101 and 120

Order of the President of the National Agency for Tax Administration no. 4160/2017 for amending and completing the Order of the President of the National Agency for Tax Administration no. 3386/2016 for approving the model and content of forms 101 ’Profits tax return’ and 120 ’Excise duty return’, published in the Official Gazette no. 14/8 January 2018

The Order approves the template and the filling-in instructions of forms 101 ’Profits tax return’ and 120 ’Excise duties return’. The new for are applicable starting with the tax liabilities related to 2017.

 

Form 101

The following rows were introduced:

  • 42.2.2 – regarding the tax exemption for taxpayers who exclusively carry out innovation and research and development activity.
  • 46 – regarding the 5% reduction of the profit tax for taxpayers which applied VAT split payment mechanism in the period between 1 October – 31 December 2017.

 

Form 120

New fields are introduced that should by used in case the successor of an entity that ceased to exist is the one taking the responsibility for its tax obligations.

 

Extension of the deadline for the submission for Form 600

Emergency Ordinance for the extension of certain terms provided by Law no. 227/ 2015 regarding the Tax Code, published in the Official Gazette no. 95 on 31 January 2018

The initial deadline for the submission of Form 600, “Statement regarding the income subject to social security contribution and regarding the qualification of the revenues obtained in the minimum ceiling for determining the health insurance contribution”, provided for in Article 148 (3) and Article 170 (4) of the Law no. 227/2015 on the Tax Code, has been extended from 31 January 2018 until 15 April 2018.

 

Cancelation of certain tax obligations

Law no. 29/2018 regarding the cancellation of certain tax obligations, published in the Official Gazette no. 52/18 January 2018

The following shall be cancelled:

–              The VAT differences, as well as the ancillary tax obligations, for tax periods prior to 31 December 2016, as a consequence of exceeding the exempted threshold by certain categories of persons that carry out agricultural activities; and

–              The differences of principal tax obligations, namely the income tax and the social contributions, and the accessory tax obligations related to these, subsequent to the reclassification of income derived from the transfer of real estate assets from the personal patrimony of the individual as income derived from independent activities, in the tax periods prior to 1 June 2017.

Please refer to Tax Alert no. 3/17 January 2018 for more details.

 

Amendments proposed to the Tax Code Norms

Draft of Government Decision for approving and completing the methodological norms for applying the Law 227/2015 regarding the Tax Code, published on the website of the Ministry of Finance

On 10 January 2018, a Draft of Government Decision for the approving and completing the methodological norms for applying the Law 227/2015 regarding the Tax Code was published on the website of the Ministry of Finance. A series of modifications were proposed regarding:

–              Corporate income tax

–              Tax on income derived by micro-enterprise

–              Tax on foreign representative offices incorporated in Romania

–              Income tax

–              Mandatory Social contributions

–              Excise duties

Please refer to Tax Alert no. 2/12 January 2018 for more details.

 

VAT

Applicability of the reduced VAT rate of 9% in the agricultural field

Order of Minister of Public Finances and of Minister of Agriculture and Rural development (OMPFMA) no. 3132/2017 for modification of OMPFMA no. 1155/868/2016 regarding the applicability of the reduced VAT rate of 9% for supplies of fertilizers and pesticides used for agriculture purposes, seeds and other agriculture products for sowing or plantation, as well as for specific services used in agricultural field, published in the Official Gazette no. 049/2018

New categories of goods and services subject to 9% reduced VAT rate were introduced.

Please refer to Tax Alert no. 7/24 January 2018 for more details.

 

Customs regulations

Case C-529/16 Hamamatsu

The Court of Justice of The European Union ruled that EU customs law does not permit an agreed transaction value, composed of an amount initially invoiced and declared and a retro-active adjustment made after the end of the accounting period, to form the basis for the customs value, when it is unknown at the time of import whether that adjustment would be made up or down at the end of the accounting period.

Please refer to Tax Alert no. 1/10 January 2017 for more details.

 

Social Contributions

Law for ratifying the Agreement between Romania and the Republic of Serbia on social security signed at Belgrade on 28 October 2016

On 12 January 2018, the Social Security Agreement between Romania and the Republic of Serbia, signed on 28 October 2016 in Belgrade, was ratified.

Please refer to our Tax Alert no. 5/2018 for additional details.

 

Medical leave and social health insurance indemnities

Order no.15/ 5 January 2018 of the Ministry of Health for approving the methodological norms for the application of Government Emergency Ordinance no. 158/2005 on medical leave and social health insurance indemnities, published in the Official Gazette no. 31/ 12 January 2018

The Order approves the methodological norms to clarify the calculation of the minimum insurance period for granting medical leave and social health insurance, following the legislative changes regarding the salaries computation applicable from 1st of January 2018.

The Order also updates the procedure for the recovery of the amounts representing medical indemnities, paid to the insured individuals and covered by the Sole National Social and Health Insurance Fund, considering the removal with 1st of January 2018 of the contribution for medical leave indemnities.

In addition, the Order provides the template of the insurance contract concluded for medical leave and social health insurance indemnities based on which individuals, other than those already insured, may be insured in the health insurance system in order to benefit from medical leave and social health insurance indemnities.

 

Income tax exemption for software development activity

Order no. 1168/2017/3024/2018/492/2018/3337/2017 regarding the qualification as software development activity, published in the Official Gazette no. 52 of 18 January 2018 – in force as of 1 February 2018

The Order provides the requirements for the application of the income tax exemption starting with 1 February 2018, including in the category of those that will benefit from this facility also the employees that have finalized short-term university programs and the ones that have a baccalaureate degree and are currently enrolled in an accredited university.

Please refer to our Tax Alert no. 4/2018 for additional details.

 

Accounting regulations

Annual financial statements and accounting reports

Order of the Ministry of Public Finance no. 470/2018 regarding the main aspects related to the preparation and filing of the annual financial statements and annual accounting reports of economic operators at the territorial units of the Minister of Public Finance, as well as for amending and completing certain accounting regulations

The Order regulates the preparation and the filing of the annual financial statements for the financial year 2017, and of the annual accounting reports prepared by economic operators as at 31 December 2017.

In addition, the Order amends and completes the Accounting regulations regarding the individual annual financial statements and the consolidated annual financial statements, approved by the Order no. 1802/2014, respectively the Accounting regulations compliant with the International Financial Reporting Standards, approved by the Order no. 2844/2016, mainly in respect of the following aspects:

–              Reference to using the Guidelines on non-financial reporting published by the European Commission, by the entities required, in accordance with the applicable accounting regulations, to prepare a non-financial declaration

–              Addition of new accounts to the general chart of accounts

The publishing the order repeals the MPFO no. 166/2017 regarding the main aspects related to the preparation and filing of the annual financial statements and annual accounting reports of economic operators at the territorial units of the Minister of Public Finance.

 

Accounting regulations applicable for the private pensions system

Norm no. 1/2018 regarding the completion of the Financial Supervision Authority Norm no. 14/2015 regarding the accounting regulations compliant with the European Directives applicable for the private pensions system

The Norm completes the accounting regulations applicable to the private pensions system, by adding new accounts to the chart of accounts.

 

Accounting regulations applicable to entities from the financial instruments and investments sector

Norm no. 2/2018 regarding the amendment and completion of the Financial Supervision Authority Norm no. 39/2015 for the approval of Accounting regulations compliant with the International Financial Reporting Standards, applicable to entities authorized, regulated and supervised by the Financial Supervision Authority, from the financial instruments and investments Sector

The Norm completes, repeals or amends some provisions of the accounting regulations, related inter allia to recording certain elements in the accounting books, or to the chart of accounts.

 

Miscellaneous

NBR reference rate

Circular no.1/2018 of NBR regarding the level of reference interest rate of the National Bank of Romania

Starting with 9 January 2018, the reference interest rate was increased to 2% per year (increased from 1.75% previously).

Considering the new amendments brought to the Tax Code which entered into force starting with 1 January 2018, the reference rate is no longer relevant for tax purposes (Art. 27 of the Tax Code related to interest expenses was abrogated and it was replaced with the new provisions regarding the deductibility of borrowing costs, transposed from ATAD).

 

CRS reportable jurisdictions

Order of the President of the National Agency for Tax Administration no. 4.142/2017 for amending the Order of the President of the National Agency for Tax Administration no. 3626/2016 regarding, inter alia, the list of reportable jurisdictions under CRS

The list of reportable jurisdictions under CRS (other than the EU Member States) was amended and thus, 29 of these jurisdictions being eliminated as compared to the previous list.

 

Competence of administration for medium taxpayers

The law no. 30/2018 completing the Article 30 of Law no. 207/2015 on theTax Procedure Code.

Starting with 1st of April 2018, the administration of tax liabilities due by medium taxpayers, including their secondary offices, will be managed by the county or Bucharest level tax body, as the case may be.

 

Reimbursement of tax overpayments

Order no. 187/2018 issued by the President of the NAFA on the approval of the Procedure for reimbursement of amounts representing taxes or other budget income, overpaid or paid without claim for which there is no declaration requirement, published in the Official Gazette no. 80/26 January 2018

The Order approves the procedure for reimbursement of amounts representing taxes or other budget income, overpaid or paid without claim for which there is no declaration requirement, as well as the format and content of the forms used for this purpose.

The Order will enter into force on the date of the repeal of Order no. 528/2015.

 

 

For additional information, please contact:

Alex Milcev, Partner – Head of Tax & Legal

 



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