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Further amendments to the tax Code in early june

Amendments to the tax code in early june

Monitorul Oficial al Romaniei No 384 / 7 June 2012 has published Government Emergency Ordinance No 24 / 2012 amending and supplementing Law No 571 / 2003, regarding the Tax Code, and regulating some tax and financial measures.

The amendments to the Tax Code refer, inter alia, to the following:

1.1.    TITLE II – Profit Tax

– The provisions referring to the limited deductibility of operating, maintenance and repair expenses related to the cars used by the managerial and administrative staff of legal entities;

– The provisions regarding the deductibility of expenses related to motor vehicles which are not used exclusively for economic purposes (i.e. the specific mention of “fuel expenses” is eliminated) and the provisions referring to the categories of vehicles for which such expenses are fully deductible (i.e. intervention and repair vehicles, news reports vans and vehicles used by employment agencies have been eliminated, and other new categories have been introduced, such as emergency vehicles, vehicles used by acquisition agents and vehicles used as goods for commercial purposes);

– New stipulations regarding the deductibility of provisions / adjustments for the amortisation of the debts taken over from credit institutions with a view to recovering them.

1.1.    TITLE III – Income Tax

– The provisions regarding limited deductibility of expenses related to motor vehicles which are not used exclusively for the performance of business when the net annual income obtained from independent activities should be determined, and the provisions referring to expenses relating to the categories of vehicles to which such limitation does not apply (similarly to the provisions specified in the section on profit tax) have also been amended.

– Taxpayers shall no longer calculate, on the basis of the quarterly tax return, the net gains / net loss resulting from the transfer of securities other than shares and closed companies’ securities.

Note: this provision becomes effective as of 1 January 2013.

– The provisions regarding tax on gains from the transfer of securities have also been amended.

Note: this provision is applicable as of 1 January 2013.

1.2.    TITLE V – Tax on the Income Obtained from Romania by Non-residents and Tax on Representative Offices in Romania

– Chapter V regarding the exchange of information in the sphere of direct taxes has been abrogated.

Note: this provision comes into force on 1 January 2013.

1.3.    TITLE VI – VAT

– The right to deduct VAT in respect of purchase, intra-Community acquisition, importation, rent or lease of vehicles, and the VAT levied on expenses related to vehicles which are owned or used by taxpayer, when such use is not for exclusively economic purposes, has been limited to 50%.  This provision may also be applied to the partial value of goods and/or services when invoices have been issued and/or advance payments have been made before 1 July 2012, if the goods have been supplied / services have been rendered after this date.  The categories of vehicles that are exempted from said limitation have also been modified.

– The exemption ceiling for VAT purposes has been raised from EUR 35,000 to EUR 65,000 (RON 220,000).  The ceiling calculation method in the case of newly established taxable entities has been modified, and the method of calculating the turnover taken as value of reference for the application of the ceiling is specified.

– The amendments also relate to the provisions regarding deregistration of the entities registered for VAT purposes, and the annulment of an entity’s registration for VAT purposes by the competent tax authorities.

1.1.    TITLE VII – Excise Taxes and Other Special Charges

Note: these provisions are applicable as of 1 August 2012

– The Ordinance provides for the period during which a bonded warehouse authorisation may be suspended (i.e. 1-to-12 months) whenever any of the offences stipulated by Art.2961 (1) (c), (f), (h), (i), (k), (n) – (p) of the Tax Code has been committed.

– The Ordinance details the marking and colouring of certain energy products.

– It also specifies other offences leading to the suspension of the bonded warehouse authorisation as well as to punishment with imprisonment from one (1) year to four (4) years.  The Ordinance sets the time interval (i.e. 3 days) during which the inspectors shall submit their report to the tax authority that has issued the authorisation, suggesting that the authorisation should be suspended.

1.2.    Other Provisions

–  The Ordinance establishes rules for the year 2012 referring to the special exemption regime applicable to the small-sized enterprises provided under Art.152 of the Tax Code.

– Specific mention is made of the regime applicable to certain unmarked and uncoloured energy products given to consumption before the entry into force of this Ordinance, as well as of the exemptions of such products from displaying marks and colours.

The amendments referred to hereinabove for which no specific mention has been made in respect to the date on which they come into force shall become effective from 1 July 2012.

Provisions Referring to the Tax Procedure Code

– The Ordinance provides for the order in which the tax obligations of taxpayers benefiting from State subsidies are extinguished.

Provisions Referring to Government Emergency Ordinance No 29 / 2011 Regulating Payment Rescheduling

New provisions are introduced with regard to the special regime of the tax obligations on the payment of which the maintenance of authorisation, approval or of any similar administrative act depends.

TAX ALERT by Mazars Consulting / MAZARS ROMANIA

* Note: You may find Romanian, German and French versions of the newsletter in Mazars’ archive

* TAX ALERT contains a selection of the latest major issues occurred in the Romanian legislative framework, is intended only to provide information and, hence, shall not be deemed to provide professional advice or consultancy.  Therefore, we assume no responsibility in this respect.

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