Legislative summary – March 2018

Amendments to the Tax Code

Law no. 72/2018 for the approval of Government Ordinance no. 25/2017 for the amendment and completion of Law no. 227/2015 regarding the Tax Code, published in the Official Gazette no. 260 / 23 March 2018

Please refer to the tax alert no. 13 / 30 March 2018 for more details.

Emergency Ordinance no. 18/2018 regarding the simplification of the reporting obligations for individuals, published in the Official Gazette no. 260/23 March 2018.

Please refer to the tax alert no. 14/30 March 2018 for more details.

Order of the President of the National Agency for Tax Administration no. 888/2018 on the approval of the template, content, reporting and administration of 212 form – „The annual statement regarding income tax and social charges due from taxpayers”, published in the Official Gazette no. 279/29 March 2018

Please refer to the tax alert no. 15/5 April 2018 for more details.

Government Emergency Ordinance no. 25/2018 for the amendment and completion of several normative acts and for the approval of some tax-budgetary measures, published in the Official Gazette no. 291 / 30 March 2018

Please refer to the tax alert no. 16/11 April 2018 for more details.

Amendment on the indirect methods for determining the income

Order no. 675/2018 on the approval of indirect methods for determining the income and application procedure, published in the Official Gazette no. 257/23 March 2018, which repeals Order no. 3733/2015 with the same description
The regional directorates of public finance have been included as competent authorities that can take measures to carry out the provisions of this order.

Preliminary tax audit has been excluded from the preliminary activities related to the inspection of the personal tax status.

Tax measures in the health sector

Government Emergency Ordinance no. 8 /2018 on certain measures in the health sector, published in the Official Gazette no. 190/1 March 2018
Starting with the January 2018 reporting obligations, the amount of the social insurance contribution due cannot be higher than the 10.5% rate applied to 35% of the RON 3,131 (i.e. RON 115.06) for the individuals who are or will be on medical leave during 1 January 2018 – 30 June 2018, respectively 1 January 2018 – 30 September 2018, depending on the type of medical leave.

Oil & Gas tax amendments

Law no. 73/2018 for the approval of Government Ordinance no. 7/2013 regarding the tax on supplementary revenues obtained from deregulation of natural gas prices, published in the Official Gazette no. 258 / 23 March 2018
The Law approves certain amendments to Government Ordinance no. 7/2013 regarding the tax on supplementary revenues obtained from deregulation of natural gas prices.

As such, starting April 1, 2018, the tax on supplementary revenues derived by natural gas producers and distributors will be amended as follows:
– A 60% tax will be charged on the supplementary revenues in case of prices up to RON 85/MWh inclusively; and
– In case of prices exceeding RON 85/MWh, an 80% tax will be charged on the supplementary revenues obtained from the difference between the RON 85/MWh and the actual price used;
– The tax will be applicable for an unlimited period of time (as per the old provisions, the tax was applicable only until 31 December 2018).

International taxation

Law no. 75/2018 for the approval of the Convention for the avoidance of double taxation and prevention of tax evasion with respect to income taxes between Romania and Bosnia and Herzegovina, published in the Official Gazette no. 269 / 27 March 2018

The Law approves ratification of the Convention for the avoidance of double taxation and prevention of tax evasion with respect to income taxes between Romania and Bosnia and Herzegovina, signed at Sarajevo on the 6th of December 2016.

The Convention is significantly amended. Among the most important changes, we note the following:
– Article 5 ‘Permanent establishment’ – a building site, a construction project, an assembly or installation project or the related surveillance activities constitutes a permanent establishment only if such building site, project or such activities lasts for more than 12 months (the currently applicable Convention provides for a period of 24 months);
– Article 10 ‘Dividends’ – Dividends are also taxable in the contracting state of which the company paying the dividends is resident at a 5% rate, if the effective beneficiary is an enterprise (other than a partnership) which directly owns at least 25% of the share capital of the company paying the dividends and at a 10% rate in all other cases (the currently applicable Convention provides only for a 5% tax rate);
– Article 11 ‘Interest’ – Interest is also taxed in the contracting state in which it arises and according with the legislation of that state, if the effective beneficiary of interest is resident of the other contracting state, at a 7% rate (the currently applicable Convention provides for a 7.5% tax rate);
– Article 12 ‘Royalties’ – Royalties are also taxed in the contracting state in which they arise and according with the legislation of that state, if the effective beneficiary of royalties is resident of the other contracting state, at a 5% rate (the currently applicable Convention provides for a 10% tax rate);
– The article on taxation of commissions will be eliminated.

State aid schemes

Order no. 2254/2018 of the Vice Prime-Minister, Minister of regional development and public administration, for the amendment of the Order no. 760/2016 of the Vice Prime-Minister, Minister of regional development and public administration on the approval of the de minimis state aid scheme for the supporting of the development of microenterprises in the regional operational Programme 2014-2020, published in the Official Gazette no. 221 / 12 March 2018

The Order amends Order no. 760/2016 as concerns the total estimated value of the de minimis state aid, which will be of EUR 527.65 mil.
Order no. 2253/2018 of the Vice Prime-Minister, Minister of regional development and public administration, for the amendment of the Order no. 3254/2016 of the Vice Prime-Minister, Minister of regional development and public administration on the approval of a supporting measure, comprised of granting state aids and de minimis aids for the improvement of economic competition through the increase of work productivity in the small and medium enterprises in the regional operational Programme 2014-2020, published in the Official Gazette no. 223 / 13 March 2018

The Order amends Order no. 3254/2016 as concerns the total estimated value of the state aids granted, as follows:
– State aids: EUR 629.74 mil.;
– Regional state aids: EUR 503.79 mil.;
– De minimis aids: EUR 125.95 mil.

Order no. 208/2018 for the approval of the de minimis state aid scheme ‘Support for applying the local development strategies under the responsibility of community’ related to the Operational Programme for fishing and sea businesses 2014-2020, published in the Official Gazette no. 251 / 22 March 2018

The Order approves the de minimis state aid scheme ‘Support for applying the local development strategies under the responsibility of community’ related to the Operational Programme for fishing and sea businesses 2014-2020.

The objective of the scheme is the facilitation of access to financing of the enterprises which contribute to the local development of fishing communities, through granting de minimis aids for the rendering of a service of general economic interest.

The duration of the scheme is from the date of its publication in the Official Gazette up until 31 December 2018 and the total value of the de minimis aid granted according to the scheme is of EUR 10 million.

Miscellaneous

Order of the President of the National Agency for Tax Administration no. 620/2018 on the approval of the list of the State Budget Income Accounts in which are cashed in the amounts from the VAT account opened by the taxable persons registered for VAT purposes according to art. 316 of the Law no. 227/2015 regarding the Fiscale Code, published in the Official Gazette no. 218/ 12 march 2018

Please refer to the tax alert no. 12 / 15 March 2018 for more details.

Order no. 627/2018 of the president of National Agency for Tax Administration regarding the approval of the procedure of data transmission in respect of the obligation of economic operators to use electronic tax cash registers, approved by Government Decision no. 479/2003, to the National Agency for Tax Administration, published in the Official Gazette no. 238 / 19 March 2018

Order no. 627/2018 approves the procedure of data transmission provided for at art.3, par (1) letter a) or art. 3, par. (2), letters a), b) or c), respectively those provided for at art. 3, par. (1) letters b) and c) from the annex no. 11 of the methodological Norms for the application of the Government Emergency Ordinance no. 28/1999 regarding the obligation of the economic operators to use electronic tax cash registers, approved by Government Decision no. 479/2003, to the National Agency for Tax Administration.

The annex to the Order also provides the format of the statement regarding the unused electronic tax cash registers.

Order no. 673/2018 of the president of the National Agency for Tax Administration for amending and completing several orders regarding the approval of forms used in the collection of tax obligations, published in the Official Gazette no. 243 / 20 March 2018

The Order amends and completes Order no. 63/2017, as well as Order no. 3454/2016 of the president of the National Agency for Tax Administration.

Several forms on the collection of tax obligations are approved in the annexes to the Order.

Form 700

On 27 March 2018, the National Agency for Tax Administration published a first change of Form 700 – Statement for the registration / modifying in the electronic environment of the categories of tax obligations included in the fiscal vector (intelligent pdf format).

Form 700 is used starting with 1 January 2018 for the modifying of the tax obligations, which the taxpayer has the obligation to declare. This form is used exclusively for the declaration through electronic means of the amendments regarding the tax vector.

Authors:
Arcadie Parfenie – Senior Manager, Corporate Income Tax
Cristina Galin – Senior Manager, Indirect Tax
Corina Mindoiu – Senior Manager, People Advisory Services

For additional information, please contact:

Alex Milcev, Partner – Head of Tax & Legal

Email: office@ro.ey.com



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