Amendments brought to the Tax Code
Order no. 409/2017 regarding the qualification as software development activity, published in the Official Gazette
no. 468/22 June 2017
Please refer to Tax Alert no. 13/June 2017 for more details.
Law no. 136 approving Emergency Ordinance no. 32/2016 for completing Law no. 227/2015 regarding the Tax Code and regulating certain financial and tax measures, published in the Official Gazette no. 440/14 June 2017
The Emergency Ordinance introduces new articles in the Tax Code regarding:
Tax exemption for research and development (“R&D”) activities, whereas the following conditions are introduced:
- it is granted to all persons who are included in theteam of a R&D project with defined results indicators;
- it is granted within the limit of the costs for the staff assigned to the R&D project, as shown separatelyin the budget of the project;
- the payroll of the salary income received by each employee from activities carried out in in the Research & Development project shall be drawn up separately for each project.
- specific exemption from the non-harmonized excise regime applicable to certain heated tobaccoproducts (falling under NC code 24039990);and
- special refunds for the above mentioned heatedtobacco products.
Amendments brought to the Tax Procedure Code
Government Emergency Ordinance no. 42/2017 for amending and completing the Law no. 207/2015 regarding the Tax Procedure Code for implementing the mandatory automatic exchange of information on the country-by-country report, published in the Official Gazette no. 438 / 13 June 2017
The Emergency Ordinance provides for amendments of the Tax Procedure Code so as to implement the mandatory automatic exchange of information on the country-by-country report, following the adoption of Council Directive (EU) 2016/881 of 25 May 2016 amending Directive 2011/16/EU as regards mandatory automatic exchange of information in the field of taxation.
The Emergency Ordinance enters into force at the date of publication in the Official Gazette (13 June 2017) and transposes the Council Directive (EU) 2016/881, without making significant changes.
Please refer to Transfer Pricing Alert from June 2017 for more details.
Order no. 895/2017 for the approval of accounting reporting system as at 30 June 2017 for the economic operators, as well as for regulating certain accounting aspects, published in the Official Gazette no. 463 / 21 June 2017
Please refer to Tax Alert no. 12 / June 2017 for more details.
Unitary pension system
Law no. 160/2017 for completing the Law no. 263/2010 regarding the unitary pension system, published in the Official Gazette no. 504/30 June 2017
The law regulates a derogation from the provisions of Law no. 7/2017 on the state social security budget for 2017.
Thus, a correction index of 1.14 is imposed for the entire year
2017, without any change to 1.05 starting July 1, 2017.
Technical approval for the business plan of the foreign investors
Order no. 689/2017 for the approval of the procedure for granting the technical approval for the business plan of the foreign investors – in force as of 21 June 2017, published in the Official Gazette no. 465 / 21 June 2017
The Order approves the procedure for granting the technical approval for the business plan of the foreign investors, in order to obtain the long-stay visa in Romania for the purpose of carrying out commercial activities. It also establishes the Commission within the Ministry for Business Environment, Trade and Entrepreneurship, which will be responsible for applying the provisions of this order.
State aid schemes
Order no. 692 / 12 June 2017 for approving a ‘de minimis’ state aid scheme provided in the Programme for stimulating the incorporation of small and medium enterprises “Start-Up Nation– Romania”, published in Official Gazette no. 431 / 12 June 2017
The Order approves a ’de minimis’ state aid scheme that aims to stimulate the incorporation and development of small and medium enterprises and the improvement of their economic performances, creating new jobs, labor market integration for disadvantaged persons, unemployed persons and graduates, increasing investment in innovative new technologies.
Small and medium enterprises fulfilling certain criteria specifically provided in the state aid scheme can benefit of the state aid. The state aid consists of non-refundable financial allocations of maximum 200,000 lei / beneficiary, amount which can represent 100% of the value of the eligible costs (including VAT for companies not registered for VAT purposes) related to the project.
The state aid scheme is valid until 31 December 2020 and payments will be made up to 31 December 2021.
The allocated budget for the scheme for 2017 is of 1,713,798,000 lei and the estimated budget for the period 2018 – 2020 is of 2,000,000,000 lei. For the year 2017 it is estimated that the ”de minimis” state aid will be granted to a number of maximum 10,000beneficiaries.
Common Corporate Tax Base / Common Consolidated
Corporate Tax Base
Decision no. 45 / 30 May 2017 for adopting the opinionregarding the Communication from the Commission to the European Parliament and the Council: Building a fair, competitive and stable tax system for the European Union – COM 2016 (682), the Proposal for a Council Directive on Common Consolidated Corporate Tax Base (CCCTB) – COM (2016) 683 and the Proposal for a Council Directive regarding Common Corporate Tax Base – COM (2016) 685, published in the Official Gazette no. 416 / 6 June2017
The Decision makes certain remarks in connection to the two proposed Council Directives of 25 October 2016 on a Common Corporate Tax Base (CCTB) respectively Common Consolidated Corporate Tax Base (CCCTB). In principle, the initiatives and proposed reform of the tax system are sustained but certain remarks are made, such as:
- it believes that large companies are against the mandatory CCCTB reporting, while SMEs, non-governmental organizations and individuals support it;
- based on Romania’s experience, it finds it necessary that the R&D activities should be subject to local national certification;
- it considers necessary that the Directives include provisions regarding the type of eligible expenses for R&D tax incentives;
- it does not support the option for benefiting of the R&Dtax incentive either in the form of a tax credit or a supra- deduction (and it considers appropriate only the supra- deduction option);
- while it supports the implementation of the two Directivesin two stages, it has reserves regarding the second stage (i.e. CCCTB), considering its potential impact on the national budgetary revenues.