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Amendment to the Tax Code

The Government Emergency Ordinance no. 19/2014 for the amendment and addition to Law no. 571/2003 on the Tax code has been published the Official Gazette of Romania, part I,.no. 308on 25th April 2014.

The emergency ordinance is amending and adding to the Tax Code provisions referring to the tax exemption from the reinvested profit.

Thus, the profit reinvested in technological equipment – machines and work installations – as provided in subgroup 2.1 from the Catalogue regarding the classification and normal durations of fixed means of operation, used for performing economic activities, is exempted from tax.

The provisions are applied for the profit reinvested in technological equipment made and/or purchased after 1st July 2014 and to be operated until 31st December 2016, inclusively.

The technological equipment has to be new.

The reinvested profit represent the balance on the profit and lose account, respectively the account gross profit cumulated from the beginning of the year, in the year of operating the respective technological equipment.The tax exemption on profit associated to the investments made, is granted in the limit of the profit tax owed for the respective period.

For the 1st July – 31st December 2014 period, for applying this facility, it is taken into consideration the account gross profit registered as of 1st July 2014 and invested in the assets mentioned above and made or purchased and operated after the same date.

For the taxpayers who are bound to pay profit tax quarterly, in the situation in which there are investments made in the previous quarters, from the account gross profit cumulated as of the beginning of the year, the amount of the previously invested profit for which the facility was applied, is deducted.

The taxpayers who benefit from tax exemption are bound to keep in patrimony the respective technological equipment at least a period equal to half of the duration of economic usage, established according to the applicable accountancy regulations, but no longer than 5 years.

:: The source: JURIDICE.ro

Denis BORTIS

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