References: EOG 84/2016, Law 227/2015, Law 207/2015
In the Official Gazette no. 977 from 6 December 2016, it was published the Emergency Ordinance no. 84/2016 for amending and supplementing normative acts from financial and tax legislation.
You may find below the main amendments brought to the Fiscal Code and Tax Procedure Code through the mentioned Ordinance, amendments that entered into force from 1st January 2017.
Corporate income tax
Expenses related to the non-taxable revenues
The New Fiscal Code introduced in 2016 the general rule according to which, in case the accounting evidence does not provide the possibility to identify the non-deductible expenses related to the non-taxable revenues, it is necessary to allocate as non-deductible expenses, a part of the expenses incurred for the management and administration of the company.
This Ordinance clarifies that for certain types of non-taxable revenues it is not mandatory to allocate non-deductible expenses, such as: income recorded upon full or partial reversal of the provisions, income registered for the increases in value of the fixed assets resulted after revaluation, income from deferred tax.
For the revenues related to dividends, sale of shares or from liquidation, the allocation of non-deductible expenses is still necessary.
Inactive/ reactivated Taxpayers
New provisions are introduced regarding the inactive taxpayers in case of their reactivation. Therefore, the taxpayers will have the possibility to deduct the expenses related to the transactions incurred in the period of inactivity, after the date of their reactivation.
Additionally, the beneficiaries who have made acquisitions of goods/ services from legal entities declared inactive will have the deduction right for the expenses related to these acquisitions, based on the invoices issued by the suppliers, after reactivation.
The tax exemption for the reinvested profit is extended for an unlimited period. Moreover, starting with 2017 the facility applies also for the right to use of software programs.
Income tax for microenterprises
Romanian legal entity which has a share capital of at least RON 45,000 may choose to pay corporate income tax instead of income tax on microenterprises. Thus, the threshold for this option is reduced, previously being set at EUR 25,000.
Register of Intra Community
Starting with 1st January 2017, the obligation of taxable persons performing intra-Community transactions to register in the Registry of Intra-community Operators ROI is removed.
VAT adjustment for capital goods
According to the new provisions, the VAT adjustments for the capital goods is carried out in stages, for a value of 1/5 or 1/20 from the VAT initially deducted, for each year from the remaining adjustments period.The obligation to adjust the entire amount, in certain conditions like sale or disposal of capital goods, is preserved.
Inactive taxpayers/VAT registration number cancelled
Similarly with the applicable provisions for corporate income tax, the taxpayers declared inactive or whose VAT registration number was cancelled, are allowed to exercise their right of deduction for the VAT related to the transactions carried out during the period in which were declared inactive/ the VAT registration number was cancelled, after their reactivation/ re-registration for VAT purposes.
Also, the beneficiaries who have made acquisitions of goods/ services from the legal entities declared inactive or with the VAT registration number cancelled, are allowed to deduct the VAT related to these acquisitions based on the invoices issued by the suppliers, after reactivation/ re-registration.
Registration for vat purposes
According to the Ordinance, the tax authorities will no longer cancel the registration for VAT purposes of an entity who become temporary inactive, based on its voluntary request to the Trade Register.
Special regime for farmers
A special optional scheme has been introduced for farmers, for which may opt: private individuals, authorized individuals, individual enterprises or family-run companies. The farmers who apply the regime do not collect any output VAT, nor deduct input VAT, but they will charge a flat-rate compensation, as such: 1% for the year 2017, 4% for the year 2018 and 8% for the year 2019.
The taxpayers who make acquisitions from these farmers will have to keep a separate evidence of these and will be able to deduct the flat-rate compensation invoiced by the farmers in the same limits and under the same conditions applicable for the VAT deduction.
According to the new provisions the obligation to submit 392 statement is suspended until 31 December 2019.
In case of anticipated tax audit performed in order to solve the VAT reimbursement requests, the period under review will only cover the fiscal period that generated the VAT subject to the reimbursement request. The period may be extended in case of any indications of a breach of tax legislation or if the fiscal obligations were incorrectly assessed.
The threshold for establishing the competence in the solving of tax appeals changes from RON 5 million to RON 1 million. Thus, the specialized appeal settlement structures within the general regional directorates of public finance have the authority to settle the appeals whose tax receivables are amounting up to RON 1 million. The General directorate of settlement of appeals within A.N.A.F is the appeal settlement authority for solving the appeals against tax receivables amounting more than RON 1 million.
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