Newsletter 10/2019 – Tax law amendments

Newsletter 10/2019 – Tax law amendments

References: LAW 156/2019, GEO 31/2019, GEO 43/2019, OG 213/2019, Order 1888/2019

Newsletter 10/2019 – Tax law amendments

In the last months, a series of amendments and additions to the tax legislation have been brought through the following normative acts: Law 156/2019 regarding the modification of the threshold applied for the sponsorships credit, published in the Official Gazette no. 625/26.07.2019, Emergency Ordinance 31/2019 regarding the granting of certain tax incentives and for amending and completing Law no. 227/2015 regarding the Fiscal Code, published in the Official Gazette no. 403/ 23.05.2019, Emergency Ordinance 43/2019 regarding the clarification of the application of the tax incentives granted to the constructions sector, published in the Official Gazette no. 507/21.06.2019, Government Decision 213/2019 for the modification and completion of the VAT title in the Methodological Norms for the application of Law no. 227/2015 regarding the Fiscal Code, published in the Official Gazette no. 282/12.04.2019, Order 1888/2019 regarding the extension of the obligation to file form 094 to all the companies that will use the quarter as VAT reporting period, published in the Official Gazette no. 592/18.07.2019.


We present below the main amendments brought to the tax legislation by the normative acts mentioned above.


Corporate income tax


Tax credit for sponsorships


The limit of the fiscal credit granted in connection with sponsorships, determined as a percentage from the turnover, has been increased from 0.5% to 0.75%.


No amendments have been brought to the other threshold, which limits tax credit to a maximum of 20% of the corporate income tax due for that period. Both thresholds must be met concurrently.


Note that the deduction of the sponsorship expenses from the corporate income tax payable is only possible if at the date of signing the contract, the beneficiary is registered in the Registry of entities/places of worship for which such tax deductions are granted.



Personal income tax and social contributions


Incentives for the constructions sector


The ordinance brings amendments and clarifications regarding the application of tax incentives for the employees of the companies operating in the constructions sector. The facilities in question have been introduced through GEO 114/2016 (which has already been presented in in our Newsletter no.3/2019).


Thus, the granting of tax facilities for the constructions sector extends by including three new NACE codes, namely: 2351-Manufacture of cement, 2352-Manufacture of lime and plaster and 2399-Manufacture of other non-metallic mineral products n.e.c.


Separately, the way of determining the turnover taken into account from the activities related to the accepted NACE codes is modified, within the limit of at least 80% of the total turnover (which is one of the conditions for applying the tax facilities), as follows:

  • For newly-established companies, the turnover is calculated on a monthly basis, cumulatively from the beginning of the year, including the month in which the incentives apply (if the limit of 80% is exceeded, the facility applies)
  • For companies already established as of January 1st of each year, the basis of calculation is the turnover from the previous year. If during that previous year 80% or more of the turnover is generated from activities for which tax incentives are granted, then these incentives apply throughout the current year (the limit of 80% from the turnover will not be re-calculated on a monthly basis). For companies that do not achieve this minimum turnover limit, the same treatment as for newly-established companies applies.

Note that the monthly gross incomes from salaries and incomes assimilated to salaries derived by individuals, to whom the exemption is applied, are calculated for 8 hours of work per day and an income of at least 3.000 RON. The exemption applies to the amounts of monthly gross income up to 30,000 RON, the part exceeding 30,000 RON will not benefit from tax facilities.


Value added tax


Amendments regarding the obligation to file form 094


The obligation to file the annual "Statement regarding the turnover obtained by tax payers which use the quarter as VAT reporting period and did not perform any intra-Community acquisition of goods in the previous year" (form 094) is extended to the tax payers who, during the previous year used the month as VAT reporting period (and who return to quarter as reporting period) but did not perform any intra-Community acquisition of goods and did not exceed the threshold of EUR 100,000.


Completion of norms regarding the trading of goods with different VAT rates


The methodological norms applicable to VAT have been updated following the addition of Case C-463/16 Stadium Amsterdam CV, delivered by the European Court of Justice (accessory operations benefit from the same tax treatment as the principal operation).


Thus, if a package containing goods or services is subject to both the reduced VAT rate and the standard VAT rate and a principal operation can be established, the VAT rate applicable to the package will be the VAT rate applicable to the principal operation, even if the price of each item that compose the total price paid by a consumer can be identified.


In cases where the principal operation cannot be determined, the VAT rate corresponding to each item is applied, provided that the goods can be separated. Otherwise, it is considered that a single complex operation takes place, applying the standard VAT rate to the total value of the package.


Reduced VAT for high quality food


The VAT rate is reduced from 9% to 5% for the supply of high quality food, respectively mountain, bio and traditional products, authorized by the Ministry of Agriculture and Rural Development.


The provisions are valid as of June 1st, 2019.




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