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Legislative Summary - September 2019

In this issue:

·        The procedure regarding the tax amnesty established through Government Ordinance no. 6 / 2019

·        VAT exemption for the supply of land together with a building which the parties intend to demolish - CJEU Decision in the case C-71/18 KPC Herning

·        Miscellaneous

·        The procedure regarding the tax amnesty established through Government Ordinance no. 6 / 2019

Order no. 3126 / 19 September 2019 approving the Procedure for the annulment of accessory payment obligations and amending the Order of the Minister of Public Finance no. 2810 / 2019 for approving the Procedure for the implementation of the measures for restructuring the outstanding budgetary obligations at 31st of December 2018, in the case of debtors who have principal debts in an amount greater than or equal to the amount of RON 1,000,000

The Order brings clarifications in respect to the taxpayer categories targeted by the Order and in respect to the type of debts for which annulment or postponment can be granted, as well as the procedure for granting these tax incentives.

For more details, you may consult the Legal Alert no. 2 /  October 2019.

Also, through the Emergency Government Ordinance no. 67 / 2019, the deadline for submitting the notification regarding the intention to restructure the budgetary obligations (stipulated in chapter I of the GO no. 6 / 2019) which was initially set up for 30 September 2019 was extended until 31 October 2019.

For more details, you may consult the Official Gazette no. 784  / 26 September 2019.

 

·        VAT exemption for the supply of land together with a building which the parties intend to demolish 

CJEU Decision in the case C-71/18 KPC Herning

On 4 September 2019, the Court of Justice of the European Union ("CJEU") issued a judgment in case KPC Herning (C-71/18). This case is particularly relevant for those companies who perform transactions with immovable properties (i.e. building and the land on which it stands) when the parties intend to demolish the building in order to construct a new building, where the building and the land on which it stands are subject to two successive supplies.

 

Facts of the case and Court Decision

The case analyses to what extent a supply of a land, on which at the time of supply there is a building, qualifies as a sale of building land, subject to VAT, when the parties’ intention is that the building be demolished in order to allow the construction of a new building.

Given previous jurisprudence of the CJEU, it is important to decide in which case a number of successive supplies, such as the sale of a building and the land on which it stands, the demolition of that building followed, as the case may be, by a construction of a new building, must be classified for VAT purposes as independent transactions or as a single transaction from an economic point of view.           

According to CJEU, in the case at hand, at the time of both successive transactions the building (a warehouse) was fully functional and could be used.

Based on all of the above, the CJEU ruled that the Article 12 (1) (a) and (b) and Article 135 (1) (j) and (k) of the VAT Directive must be interpreted as meaning that a supply of land and the building upon it cannot be described as a delivery of building land, when this operation is independent from other services and does not form, along with them, a single operation, even if the intention of the parties was that the building be totally or partially demolished to allow the construction of a new building.

 

·        Miscellaneous

NAFA Order regarding the procedure for transferring the amounts recovered within the mutual assistance to the recovery and for approving the model and the content of certain forms

On 21 August 2019, Order no. 2288 approving the Procedure  for transferring the amounts recovered within the mutual assistance to the recovery as well as the model and the content of certain forms was issued.

For more details, you may consult the the Official Gazette no. 741 / 11 September 2019.

 

Order no. 189 / 23 September 2019 for amending the Order of the President of the National Regulatory Authority in the Energy Field no. 36 / 2016 on establishing the method in which the annual determination of the level of the minimum stock of natural gas will be performed for the holders of licenses to operate natural gas transportation systems

The order provides the computation method of the level of the minimum stock of natural gas for the holders of the license to operate the natural gas transportation systems and the deadlines for notifying the National Energy Regulatory Authority in the Energy Field regarding the stock to be constituted until 31 October 2019.

For more details, you may consult the Official Gazette no. 775 / 24 September 2019.

 

Order amending and supplementing the Order of the Minister of Public Finance no. 660 / 2017 regarding the approval of the Communication procedure by electronic means of distance transmission between the Ministry of Public Finance / the central tax authority and the natural persons, legal persons and other entities without legal personality

The Order includes ammendments in respect to the registration procedure in the Virtual Private Space ("SPV"), the procedure for filing tax registration statements by individuals, legal entities and entities without legal personality, the procedure for filing tax declarations through SPV by natural persons who identify themselves with their name and password ('NPOTP').

In addition, in Annex 1 of the Order are presented all the documents that can be communicated by SPV in the case of natural persons, and in Annex 2 all the documents that can be communicated by SPV in the case of legal persons or entities without legal personality.

For more details, you may consult the Official Gazette no. 785 / 27 September 2019.

 

De minimis aid schemes

During September, various de minimis aid schemes were approved, such as:

-        De minimis aid scheme foreseen under the National Multiannual Program for the development of entrepreneurs among women in the small and medium-sized enterprises sector;

-        De minimis aid scheme ‘Implementation of local development strategies in cities / municipalities with a population of over 20,000 inhabitants’;

-        The scheme of 'De minimis aid to compensate for the effects of unfavorable hydrometeorological phenomena manifested during March – May 2019 on the apiculture sector ';

-        The scheme of 'De minimis aid for the application of the program supporting the sheep breeders for the marketing of wool ';

-        De minimis aid scheme ‘Romania Start Up Plus’, in respect to the objective of ‘Increasing occupation by supporting non-agricultural enterprises in the urban area’;

-        De minimis aid scheme for the support of social economy enterprises of insertion;

For more details, you may consult the Official Gazette no. 736 / 9 September 2019, Official Gazette no. 740 / 10 September 2019, Official Gazette no. 774 / 24 September 2019, Official Gazette no. 775 / 24 September 2019, Official Gazette no. 778/ 25 September 2019, Official Gazette no. 779 / 25 September 2019, Official Gazette no. 784 / 26 September 2019

 

Meal tickets value for second semester

As of October 2019 until March 2020, the value of a meal ticket remains the same and cannot exceed RON 15.18.

For more details, you may consult the Official Gazette no. 770 / 23 September 2019.

 

Prepared by:
Valentin Cretu –Manager, Direct Taxes
Alexandru Slujitoru – Attorney, Radu și Asociații SPRL
Andreea Cosmanescu– Senior Manager, People Advisory Services
Nina Sava – Senior Manager, Indirect Taxes

 

For additional information, please contact:
Alex Milcev - Partner, Head of Tax&Legal

 

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

Email: office@ro.ey.com

 

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