Legislative summary - February 2019
In this issue:
· Computation methodology for the annual monetary contribution levied by the National Energy Regulatory Authority (NRAE)
· Tax on the revenues of the online gambling organizers
· Environmental fund
· Amendments to several tax forms
· Customs duties
· Computation methodology for the annual monetary contribution levied by the National Regulatory Authority for Energy (NRAE)
Order no. 18/2019 for the approval of the Methodology regarding the computation and establishment of the annual monetary contribution provided by Emergency Ordinance no. 33/2007 on the organization and functioning of NRAE
This Methodology was elaborated and published as a result of Emergency Ordinance no. 114/2018 which established inter alia an increased level (of 2%) for the monetary contribution due by license holders in the field of electricity and natural gas.
The monetary contribution of 2% is applied to the turnover realised in the reference year (reffered to as year „n”) from those activities for which the licenses were granted.
The computation method involves:
(i) the estimation of the contribution for year „n” based on the estimated turnover for the previous year („n-1”) which should be communicated to NRAE by 15th of March, respectively
(ii) the regularisation of the contribution for year „n” which will be performed in the following year („n+1”) based on the acutal turnover realised in the reference year. In this respect, titleholders have a 5 days term after the statutory deadline for submission of the annual financial statements to provide to NRAE the information on the actual turnover, respectively the financial statements for the reference year („n”).
The regularization of the contribution should occur between 1 June - 31 December of year „n+1”.
The Methodology also covers those situations where the reference year is the year when the respective license either expires or is withdrawn from the titleholder.
With regard to the computation base, the Methodology provides for certain particular cases which should be considered when establishing the turnover – computation basis for the 2% contribution.
Reporting and payment of the contribution for 2018
As per the Methodology and the announcements posted on NRAE’s official website, the deadline for communicating the estimated value of turnover for the year 2018 is 15 March 2019, by completing and transmitting accordingly the relevant appenddices provided by Order no. 18/2019.
For more details, you may consult the Official Gazette no. 149 of 25 February 2019.
· Tax on the revenues of the online gambling organizers
Order no. 38/2019 for approving the computation Methodology of the monthly tax due by online gambling organizers, as well as the template of the monthly declaration
The tax due by the online gambling organizers starting 1 January 2019 is computed as 2% on the total monthly participation fees cashed on a monthly basis. The participation fees cashed on monthly basis refer to any transfers performed from the players’ bank accounts or similar to the online gambling platform.
The tax is computed, declared and paid to the State Budget by the 25th of the month following the one during which the monthly participation fees were cashed.
The methodology and template of the monthly declaration comes into force following the provisions introduced through the Emergency Ordinance no. 114/2018.
For more details, please refer to Official Gazette no. 120 / 15 February 2019.
· Environmental fund
Order no. 149/2019 for the amending and completion of the Annex to the Order of the Minister of Environment and Waters Management no. 578/2006 approving the Methodology for calculating the contributions and fees due to the Environmental Fund, act in force from the date of publication in the Official Gazette, Part I no. 156, 27 February 2019
The Order change the methodology for calculating the contributions to the Environment Fund
Please refer to Tax Alert no. 7/ 11 March 2019 for more details.
· Amendments to several tax forms
Order of the President of the National Agency for Fiscal Administration no. 426/2019 for the approval of the template and content of the forms used for the declaration of taxes and obligations with self-imposed or withholding tax regimes
The template and content of Form 100 was approved, with changes to the nomenclature, legal deadlines, and instructions.
Two additional categories are included, as follows:
· The monthly tax due by online gambling organizers
· The tax on financial assets
Starting 1 January 2019, the tax due by online gambling organizers is paid on a monthly basis, whereas the tax on financial assets will be paid on a quarterly basis, by the 25th of the month following the reporting period.
The modifications performed for the Form 100 are as a consequence to the provisions introduced through the Emergency Ordinance no. 114/2018.
For more details, please refer to Official Gazette no. 140 of 21 February 2019.
Order of the Ministry of Public Finance no. 611/2019 on the approval of the template, content, reporting and administration of the form " The statement of obligations to pay the social contributions, the income tax and the nominal record of the insured persons"
A new form for "The statement of obligations to pay the social contributions, the income tax and the nominal record of the insured persons" was published. It can be found on the official web address of the National Agency for Fiscal Administration:
The statement includes both taxpayer tax information and information required for social benefits corresponding to the specific legislation.
The new 112 tax return for 2019 has been adapted to comply with the provisions of Emergency Ordinance 114/2018. Therefore, the form was adapted for reduced wages in construction field.
Another change provided in the new form is related to IT employees who are no longer granted with the facility to support a portion of their health insurance contributions from the state budget starting with January 2019.
At the same time, a change to the 112 form is linked to employers who hire under a labor agreement a minimum of two people under the age of 45, and employment is in the agricultural or aquaculture and food industry. They receive a financial support starting January 2019 according to Law no. 336/2018.
· Customs duties
Law no. 1/2019 to ratify the Economic Partnership Agreement between the CARIFORUM states and European Community
This agreement provides, inter-alia, the elimination of the customs duties for imports of goods originated from CARIFORUM, excepting the goods falling under the Chapter 93 of the Harmonized System.
For more information, you can consult the Official Gazette no. 94/06.02.2019
Order no. 169/2019 of the President of the National Agency for Tax Administration (“NATA”) for approving the procedure for updating the fiscal vector for taxable persons registered for VAT purposes which use the quarter as fiscal reporting period and perform an intra-community acquisition of goods taxable in Romania
Through this order the templates and contents of some forms, including 092 Form were updated, in order to update the provision of the Order with those from the Tax Code, as well as for replacing the mentions from Law 571/2003 with those of the current Law 227/2015 regarding the Tax Code.
Also, the Order introduces the possibility of submitting the 092 form by electronic means.
For more details, you may consult the Official Gazette no. 154 of 27 February 2019.
ECJ Decision in the case C-562/17 Nestrade SA
On the 14th of February 2019, the European Court of Justice (“ECJ”) issued a judgment in the Nestrade SA case.
The case refers to the deadlines imposed by the tax authorities for correcting invoices in order to obtain the VAT amounts requested for refund.
According to the ECJ’s decision, an EU Member State may impose a limited period of time in which the taxable person can rectify the incorrect invoices, in order to exercise its right of reimbursement of VAT, provided that the principles of equivalence and effectiveness are respected.
This case is particularly relevant for companies requesting the VAT reimbursement and cannot provide supporting documents to tax authorities at the time of tax audit. Moreover, if the time-limit is exceeded, the company risks losing the VAT deduction right.
ECJ`s Decision in the case C-531/17 Vetsch Int. Transporte GmbH
On the 14th of February 2019, the European Court of Justice (“ECJ”) issued a judgment in the Vetsch Int. Transporte GmbH („Vetsch”) case.
The case refers to the VAT exemption on importation granted to the importer of record, in the situation in which the recipient of the subsequent intra-Community transfer of goods commits VAT fraud.
According to a constant judicial practice of the ECJ, the VAT deduction right or the VAT exemption in respect of an intra-Community supply are denied where VAT fraud is committed by the taxable person himself with respect to such transactions.
Furthermore, those rights are limited also for a taxable person who knew or should have known that the transaction which he carried out was in connection to a VAT fraud committed by the supplier or by another person.
According to the ECJ’s decision, the benefit of the VAT exemption on importation may not be refused to the importer designated or recognized as liable for payment of VAT in customs, in the case (i) the recipient of the subsequent intra-Community transfer of goods commits VAT fraud in connection with a transaction which follows and is not linked with such transfer and (ii) the importer did not know or couldn`t have known that such transaction was related to a VAT fraud.
Opinion of the General Advocate in the case C-26/18 Federal Express Corporation Deutsche Niederlassung
On the 27th of February 2019, the General Advocate issued his opinion in the Federal Express Corporation Deutsche Niederlassung (“FedEx”) case.
This case refers to the VAT chargeability for an import of goods, in case where the goods enter the European Union territory in one Member State, but they are subsequently transported in another EU Member State, without observing the customs regulations.
Considering the provision of the Community Customs Code, based on which the customs duties on importation arise at the moment when the goods are illegally introduced on the territory of the European Union, the question arises whether VAT is chargeable at the same date.
According to the opinion of the Advocate General, in case it is proved that the good has been introduced into the economic circuit of the European Union in another Member State than the one in which the customs legislation has been infringed, the VAT becomes chargeable in the latter Member State, even though the customs duty is due in the first Member State.
Order no. 114/2019 for approving the Registration procedure of lease contracts, as well as the model and content of the form for the ‘Registration request for lease contracts’
The request form for registration of the lease contracts concluded under private signature can be submitted to the central tax authorities subordinated by the National Agency for Fiscal Administration, followed by their registration within 5 days from their submission in the Registry of lease contracts, as performed by the competent central tax authorities.
The Order defines inter alia the competent tax authority to be considered, as follows:
- for lessors who are resident individuals: the competent authority is the central tax authority where the lessor has its tax domicile;
- for lessors who are non-resident individuals: the competent authority is the central tax authority where the leased item is located;
- other lessors: the competent authority is the central tax authority where the lessor is registered as taxpayer.
The request form for registration of the lease agreements must be filed with the registry of the fiscal body competent to register the lease contract.
For more details, please refer to the Official Gazette no. 109 / 12 February 2019.
Order no. 500/2019 regarding the approval of the ‘de minimis’ state aid schemes for the export promotion program, financed from the State Budget
The Order approves the de minimis aid schemes for the export promotion program regarding the participation of economic operators at international fairs and exhibitions abroad, the organization of economic missions abroad, and the development of market and products studies.
This Order applies until 31 December 2020 and the payments may be performed until 31 December 2021.
For more details, please refer to Official Gazette no. 136 of 20 February 2019.
Order no. 452/2019 on the completion of the Appendix to the Order of the President of the National Agency for Fiscal Administration no. 16/12/2018 for the approval of the Nomenclature of tax liabilities to be paid into the unique account.
This order establishes the IBAN account in which the Social Insurance Contribution due by the persons who realize salary income from construction field must be paid.
In addition, the order introduces new categories of tax liabilities to be paid in the sole account:
· The tax on financial assets
· The social security contribution due by the individuals who earn revenues from the construction filed
For more details, please refer to Official Gazette no. 156 of 27 February 2019.
Order no. 33/2019 regarding the establishment of the compulsory quota for the acquisition of green certificates related to 2018
The compulsory quota for acquisition of green certificates for 2018 is set as following:
· for January – July 2018, the quota is set to 0.343 green certificates/MWh, corresponding to a final consumption of energy exempt from payment of green certificates of 4,278.3399 GWh;
· for August – December 2018, the quota is set at 0.433 green certificates/MWh, corresponding to a final consumption of energy exempt from payment of green certificates of 3,217.2545 GWh.
For more details, please refer to Official Gazette no. 158 of 27 February 2019.
Various methodologies, prices / tarrifs in the oil and gas sector, as well as in the energy sector approved following inter-alia the modifications / provisions introduced by Emergency Ordinance no. 114/2018:
· Order NRAE no. 10/2019 regarding the approval of the Methodology for setting the prices for electricity sold by producers based on regulated contracts and of the quantities of electricity from the regulated contracts concluded between the producers and suppliers of last resort (Official Gazette no. 84 of February 2019);
· Order NRAE no. 11/2019 on the approval of the Methodology for setting the regulated tariffs and prices applied by the suppliers of last resort to final customers (Official Gazette no. 96 of February 2019);
· Order NRAE no. 14/2019 regarding the Approval of the regulated price for the electricity produced in high efficiency cogeneration which benefits from the bonus, sold based on contracts regulated by the producers of electricity and heat energy in cogeneration, applicable for the period 1 March – 30 June 2019 (Official Gazette no. 119 of February 2019);
· Order NRAE no. 132/2019 regarding the approval of the Methodology for certification of the technological consumptions related to crude oil operations in the field of extraction and storage of crude oil (Official Gazette no. 146 of February 2019);
· Order NRAE no. 31/2019 regarding the Approval of the regulated prices for electricity applied to households customers by the last resort suppliers (Official Gazette no. 153 of February 2019);
· Order no. NRAE no. 32/2019 regarding the Approval of the regulated prices applied to households customers by the last resort suppliers whose designation decision came into force before 1 March 2019, but do not own households customers in their portfolios and by the last resort suppliers whose designation decision comes into force subsequent to 1 March 2019 (Official Gazette no. 153 of February 2019).
Alex Milcev, Partner – Head of Tax&Legal
Cătălina Sersea – Manager, Direct Taxes
Mihaela Bucurenciu – Senior Manager, Indirect Taxes
Inga Tigai – Senior Manager, Tax on salary income and contributions
Ernst & Young SRL
Bucharest Tower Center Building,
22nd Floor, 15-17 Ion Mihalache Blvd.,
Sector 1, 011171, Bucharest, Romania
Tel: (40-21) 402 4000, Fax: (40-21) 310 7124