Legislative modifications in February

1) GEO for amending and supplementing Law no. 227/2015 regarding the Tax Code and the Accounting Law no. 82/1991

In the Official Gazette no. 197 / 26.02.2021 was published the Emergency Ordinance no. 13/2021 for the amendment and completion of Law no. 227/2015 on the Fiscal Code and the Accounting Law no. 82/1991

Amendment of the Tax Code

The provision that Annex II countries (including Turkey and Australia) will be considered as non-cooperating jurisdictions for tax purposes is revoked. At the same time, this measure also clarifies the tax treatment applied to transactions performed starting with January 1, 2021 in relation to these jurisdictions.

In the context of reporting cross-border arrangements under EU Directive 2018/822 (DAC 6), the Ministry of Finance states that the notion of non-cooperating jurisdictions refers only to countries in Annex I of the EU List of Non-Cooperative Jurisdictions for Tax Purposes, published in the Official Journal of European Union.

VAT

Regarding the limit for the application of the cash VAT accounting system, it will be updated to RON 4,500,000 in all the provisions of the Tax Code.

Also, if the conditions are met, there is also the possibility to opt for the application of this VAT system, at any time during the year.

Income Tax

Regarding the non-taxable income, art. 76, para. 4) lit. a) specify the non-taxable social income for employees, for example gifts for employees and their minor children, the value of transport to and from the employee's workplace, etc., and complete this letter as provided in the employment contract or internal regulations.

2) Order no. 239/2021 for the approval of the Registration Procedure for VAT purposes, according to the provisions of art. 316 para. (1) lit. a), b) or c) of Law no. 227/2015 regarding the Tax Code

In the Official Gazette no. 182 / 23.02.2021, Order no. 239/2021 for the approval of the Registration Procedure for VAT purposes, according to the provisions of art. 316 para. (1) lit. a), b) or c) of Law no. 227/2015 on the Fiscal Code, entering into force on February 23, 2021.

Currently, the tax authorities assign the registration code for VAT purposes following a request from the taxpayer, without having to go through the risk assessment procedure.
If a company is declared inactive or there are facts recorded in the tax record, the tax inspectors perform a series of checks and simultaneously issue a decision to cancel the registration for VAT purposes, and the VAT certificate is sent to the taxable person only after these checks. 

At the same time, the possibility to cancel the VAT registration later, remains valid if the criteria regarding the fiscal risk assessment are not met.

Thus, we recommend checking and meeting the criteria before requesting the VAT registration, in order to avoid the risk of a new cancellation of the VAT code.

Disclaimer

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