Legislative summary – January 2019
In this issue:
· Amendments to the Tax Code
· VAT registration procedure
· Amendments to several tax forms
· Amendments to the Tax Code
Law no. 30/2019 for the approval of the Government Emergency Ordinance no. 25/2018 amending and completing certain normative acts, and for the approval of certain fiscal measures
The law introduces several tax amendments related to corporate income tax, the tax on the income derived by microenterprises, VAT and salary income tax.
From corporate income tax perspective, an important amendment refers to the interest deductibility rules for exceeding borrowing cost. Thus, starting with 1 January 2019, the exceeding borrowing costs above the deductible threshold of EUR 1 million (increased from EUR 200,000) may be deducted for corporate income tax purposes up to 30% (increased from 10%) of the company’s EBITDA (adjusted for tax purposes).
Changes have been introduced to VAT adjustment rules when the beneficiary enters into the bankruptcy procedure or when the reorganization plan is applied.
From an excise duties point of view, a new possibility to set up the guarantee required for excise purposes was introduced.
Please refer to Tax Alert no. 4 / 23 January 2019 for more details.
Law no. 13/2019 for the approval of the Government Emergency Ordinance no. 89 / 4 October 2018
The law implements fiscal measures regarding to excise duties and VAT.
From a VAT perspective, new transport services have been included in the category of operations for which the reduced VAT rate of 5% is applicable.
From an excise tax point of view, the details are provided on the characteristics referring to the pressure, composition, tariff classification of specified products.
Please refer to Tax Alert no. 3 / 16 January 2019 for more details.
· VAT registration procedure
Order no. 167/2019 of the President of the National Agency for Tax Administration (“NATA”) on the amendment and completion of the Order no. 2.856/2017 of the President of the NATA
The Order amends and completes the VAT registration procedure.
Please refer to Tax Alert no. 6/ 5 February 2019 for more details.
· Amendments to several tax forms
Order no. 3200/2018 of the President of the NATA on the amendment and completion of the Order no. 3.386/2016 of the President of the NATA regarding the approval of the template and content of the Form 101 “Statement regarding the corporate income tax” and Form 120 “Return on excise duty”
Amendments and completions are brought in order to align the wording of the Form 101 with the legislation changes regarding:
· Taxation of sales of receivables
· Taxation of interest expenses and other costs equivalent to interest from economic perspective
Moreover, an additional section – Section C – Identification data of the empowered person is introduced. This section will need to be filled in if the reporting obligations are met by an empowered person.
Also, the instructions for filling in the Form 101 were amended in order to be consistent with the above mentioned changes.
Please refer to Official Gazette no. 18 / 8 January 2019 for more details.
Order no. 48 / 2019 of the President of the NATA on the approval of the template, content and instructions of Form 205 “Informative statement regarding the withholding tax and investments gains/ losses for taxpayers” and Form 207 “Informative statement regarding the tax withheld / exempt income for non-residents income beneficiaries”
The Order contains amendments and completions to the Forms 205 and 207 templates. Also, the instructions for filling in the Forms 205 and 207 were slightly amended.
Please refer to Official Gazette no. 38 / 15 January 2019 for more details.
Order of the President of the NATA no. 49/2019 on the approval of the template, content, reporting and administration of the form "The annual statement regarding income tax and social charges due from taxpayers"
The form "The annual statement regarding income tax and social charges due from taxpayers" was published. It can be found on the official web address of the National Agency for Tax Administration:
The form must be submitted electronically according to the current law provisions as follows:
· by uploading to “Virtual private space” (VPS);
· on e-guvernare.ro website, with electronic signature based on qualified certificate.
The statement must be submitted by 15th March 2019, by the taxpayers who have the obligation to:
· to declare the income tax derived from Romania or/and abroad in 2018;
· to declare the social charges due for 2018;
· declare the estimated income tax/income quota to be obtained in Romania in 2019;
· to declare the estimated income for 2019 in order to be determined the social charges due in this respect.
The statement includes new sections regarding the discounts granted for the electronic submission of the annual statement with respect to the income derived in 2017 and the estimated income for 2018.
The discounts will be included in this statement if the following conditions were met:
· the form has been submitted electronically by 31th July 2018;
· the income tax and/or social insurance contribution and/or health fund contribution due were fully paid by 15th March 2019.
The form introduces a discount scheme which will be granted on the full payment of the tax obligations reported for 2019, respectively, income tax and/or social insurance contribution and/or health fund contribution, as per the law.
It is provided that taxpayers have the right to amend the reported tax obligations as follows:
- the estimated income tax - by 31th December of the tax year for which the income tax is declared;
- the estimated social charges - by 15th March of the following year for which the income is declared.
For more details, you may consult the Official Gazette no. 43/16 January 2019.
Order of the President of the NATA no. 97/2019 on the approval of the template and content of the form 204 “Annual income statement for associations without legal personality and entities subject to the tax transparency regime”
The Order contains amendments to Form 204 template as well as the instructions for filling in and submitting the statement as per the last amendments of the law, as follows:
· the new template applies for income derived starting 2018;
· the due date for submitting the statement is by 15th of February of the current year for the previous year;
· the form can be submitted electronically.
As regards the income derived from agricultural activities imposed based on income quota, the form applies for the income derived stating 2019 and should be submitted with the tax authorities by 15th of February for the income to be earned during the current year.
For more details, you may consult the Official Gazette no. 67/28 January 2019.
Government Decision no. 30/2019 regarding the approval of the methodologies of establishing the income quotas imposed on income earned from the agricultural activities and the methodology of computing the reduced income quotas enforcing the provisions of the Agricultural Cooperation Law no. 566/2004 on income tax exemption.
The methodologies regarding the income quotas imposed on income earned from the agricultural activities and the methodology of computing the reduced income quotas regarding the provisions related to exemption of income tax payment as stated in art. 76 of the Agricultural Cooperation Law no. 566/2004 were approved.
For more details, you may consult the Official Gazette no.78/31 January 2019.
Government Decision no. 34/2019 regarding the 2019 work authorization quota for foreigners working in Romania
The work authorization quota for 2019 set by the Government is of 20.000.
For more details, you may consult the Official Gazette no. 80/31 January 2019.
Decision no. 9/2018 for the approval of the fees, payment deadlines and reporting obligations of the members of the Tax Consultants Chambers in 2019
The decision outlines the fees to be paid by the members of the Tax Consultants Chambers for the activity performed in 2018, as well as the template of the statement regarding such activity. The payment deadline is 15 March 2019.
Please refer to Official Gazette no. 7 / 3 January 2019 for more details.
Order of the President of the NATA no. 3201/2018 on the procedure of adjusting fiscal obligations in case of reassessment of a transaction/reclassification of a form of activity by the tax authorities
The order establishes the procedure to be applied in the following cases:
· income obtained from real estate transactions which was subject to income tax is reassessed as income derived from independent activities;
· income derived from independent activities and taxed accordingly is reassessed as salary income.
The order provides the following measures:
· the amount settled by the relevant tax authorities as a result of the reclassification of a transaction/activity is adjusted with the tax obligations which were already declared/paid by the taxpayer before the reclassification of the transaction/activity;
· the amount paid until the reclassification of a transaction/reclassification of an activity as dependent activity is considered to be an advance payment of the final tax obligations due after the reassessment procedure is finalized.
Please refer to the Official Gazette no. 61/23 January 2019 for more details.
Order of the President of the NATA no. 50/2019 on the approval of the procedure of establishing 2% from the annual income tax due to support nonprofit entities which are established and function under the law and cults as well as for private scholarships, provided by the law, or the amount of 3.5% from the annual income tax due to support nonprofit entities and cults which are providers of social services and accredited with at least one licensed social service, according to the law, as well as the template and content of certain forms.
According to the order, taxpayers can choose to redirect the amount of 2% or 3.5% from the annual income tax due for 2018 as follows:
· 2% to support nonprofit entities which are established and function under the law and cults, as well as for private scholarships, according to the law;
· 3.5% to support nonprofit entities and cults, which are providers of social services and which are accredited with a least one licensed social service, according to the law.
Depending on the type of income, the option to redirect the amounts can be exercised by completing and submitting the following forms:
· "The annual statement regarding income tax and social charges due from taxpayers";
· Form 230 “Application for the redirection of the amount representing 2% or 3.5% annual income tax due from salaries and pensions”.
For more details, you may consult the Official Gazette no. 40/15 January 2019
Order of the Minister of Research and Innovation no. 1006/2018 on the approval of the application norms regarding the procedure of approving the acceptance documentation for researchers from third countries for the purpose of performing research – development – innovation activities in Romania
The norms establish the acceptance procedure for third countries researchers who perform research, development and innovation activities in Romania for a period that exceeds 90 days, with the purpose of granting them the long stay visa and the right to extend their right of temporary stay, according to EU Directive 2016/801.
The Order no. 2414/2007 is repealed.
For more details, you may consult the Official Gazette no. 32/11 January 2019.
Government Decision no. 1045/2018 on the approval of the application norms for the enforcement of the Law no. 165/2018 regarding the grant of value tickets.
The Decision clarifies the tax treatment applicable to the meal tickets, gift vouchers, nursery tickets, holiday vouchers and cultural tickets.
According to the Decision, value tickets, except gift vouchers in some cases, are subject to income tax and exempted from social charges.
For more details, you may consult the Official Gazette no. 24/09 January 2019.
Alex Milcev, Partner – Head of Tax&Legal
Camelia Stanciu – Senior Manager, Direct Taxes
Cristina Galin – Senior Manager, Indirect Taxes
Corina Mindoiu – Director, Tax on salary income and contributions
Ernst & Young SRL
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