Amongst others, Government Emergency Ordinance no. 32/28 June 2016 amends and complets certain normative acts, amongst which also Law no. 227/2015 regarding the Tax Code.
The following amendments are brought to the Tax Code:
Income Tax
Income tax exemption on salary income
Starting with the salary income related to August 2016, the income tax exemption applies for the salary income earned as a result of performing activities in Research and Development or Technological Development fields. The conditions for such exemption will be provided through a separate common Order of several ministries (of Education, Economy, Public Finance, Labor and Agriculture) until August 2016.
Income from other sources
The income earned by the statistical operators from the collection activity from the population and from the legal entities contained in the statistical research realized with view to produce official statistics is included in the category of income from other sources.
Income tax exemption on income earned from individuals from transfer of immovable properties from personal patrimony
The Ordinance provides that the individuals are not liable to income tax on the first operation of Datio in Solutum for immovable assets in order to settle the obligations assumed through loans as per Law no. 77/2016 regarding Datio in Solutum of immovable assets.
VAT
VAT reduced rate
The applicable VAT rate for supplies of fertilizers and pesticides used in agriculture, seeds and other agricultural products for sowing or planting, as well as for the supplies of services such as the ones particularly used in agriculture provided through order of the minister of public finance and of the minister of agriculture and rural development, shall be reduced to 9%.
The application of the 9% VAT reduced rate will entry into force starting 1 August 2016.
Please refer to our Tax Alert no. 19/11 July 2016 for the most important provisions included in this decision.
Excise duty
Procedure for the registration of distribution and wholesales activities of alcoholic beverages and/or tobacco
(NAFA Order no. 1.850/17 June 2016 approving the Procedure for the registration of distribution and wholesale activities of alcoholic beverages and/or tobacco, as well as for the approval of the model and content of certain forms, published in the Official Gazette no. 471/24 June 2016).
The Order provides the conditions which should be met for obtaining the licence for distribution and wholesale activities of alcoholic beverages and/or tobacco.
Economic operators holding previously issued valid licenses, have a period of 180 days as of the entry into force of this Order, to submit a new application request, as per the new provisions. Upon expiry of the above mentioned period, these licenses will lose their validity.
The application requests have to be submitted to the following offices:
- to the interior / border customs office where the economic operators have their jurisdiction; or
- to the Authorization Department of the Customs General Directorate, applicable for large taxpayers.
The Order repeals the NAFA president Order no. 3.138/2011.
Procedure for the registration of economic operators carrying out wholesale or retail activities of energetic products – gasoline, diesel, kerosene, liquefied petroleum gas and biofuel
(NAFA Order no. 1.849/17 June 2016 approving the Procedure for the registration of economic operators carrying out wholesale or retail activities of energetic products – gasoline, diesel, kerosene, liquefied petroleum gas and biofuel, as well as for the approval of the model and content of certain forms, published in the Official Gazette no. 474/24 June 2016)
The Order provides the conditions which should be met for obtaining the licence to carry out wholesale or retail activities of energy products.
Economic operators holding previously issued valid licenses, have a period of 90 days after the entry into force of this Order, to submit a new application request, as per the new provisions. Upon expiry of the previously mentioned period, these licenses will lose their validity.
The application requests have to be submitted to the customs office in the jurisdiction area where the trading storage or the wholesale storage (for which the registration is requested) are located.
Economic operators which apply for a trading licence have to present the criminal record of the company’s administrator which should not contain any criminal sanctions from definitive court rulling regarding certain types of crimes.
The Order repeals the NAFA president Order no. 2.491/2010.
Pharma industry
Extension of the validity term of the prices for medicines for human use included in Canamed
(Order no. 769/28 June 2016 of the Ministry of Health for extension of the validity term of the prices for medicines for human use included in Canamed, as established by Order no. 810/2015 , published in the Official Gazette no. 486/29 June 2016)
The Order provides the extension of the validity term of the prices for medicines for human use included in Canamed until 1 November 2016, the initial validity term established by Order no. 810/2015 being 1 July 2016.
Procedural aspects
Repealing of certain forms
(Ministry of Public Finance Order no. 904/16 June 2016 repealing certain Orders regarding the administration procedure and forms in the fiscal system, published in the Official Gazette no. 492/30 June 2016)
This Order repeals the following Orders (that remain un-repealed although they were replaced by other Orders):
- Order no. 1.329 / 2004 approving the model and content of the form ‘Statement regarding secondary offices’;
- Order no. 2.157 / 2006 regarding the organization of the administration activity of non-residents which do not have a permanent establishment in Romania;
- Order no. 179 / 2007 approving the Instructions for correction of material errors in the VAT returns;
- Order no. 262 / 2007 approving the registration forms of taxpayers;
- Order no. 419 / 2007 approving the Procedure for changing of the registered office, as well as for the approval of the forms ‘Registration decision for registered office and tax residence’;
- Order no. 263 / 2010 approving the Procedure for the settlement of the VAT returns with negative amounts with refund option;
- Order no. 1.620 / 2014 approving the Procedure for submission to the tax body of the certified document prepared by tax consultants, as well as for the approval of the Procedure regarding the exchange of information between NAFA and the Chamber of Tax Consultants;
- Order no. 2.696 / 2011 approving the model and content of the forms necessary for requesting and communication of the data in the tax record, as well as for the approval of the model of organization, management and access to the information recorded in the tax record;
- Order no. 544 / 2014 approving the Book of rights and obligations of the individuals which are subject to a tax inspection.
State aid schemes
(Order no. 760/25 May 2016 for approving a ‘de minimis’ state aid scheme for supporting the development of microenterprises in the regional operation Programme 2014 – 2020, published in Official Gazette no. 416/2 June 2016)
The Order approves a ’de minimis’ state aid scheme for supporting the development of micro enterprises operating in the competitive fields as identified in the national Strategy and regional development plans by granting non-refundable funds (subject to certain eligible criteria).
The duration of the ’de minimis’ state aid scheme is up to 31 December 2020.
The total amount granted within the ’de minimis’ state aid scheme is EUR 234.12 million.
Miscellaneous
Convention between Romania and Hong Kong for the avoidance of double taxation and prevention of tax evasion for income taxes (Decree no. 569/2016 was published in Official Gazette no. 416/2 June 2016)
The Treaty between Romania and Hong Kong for the avoidance of double taxation and prevention of tax evasion with respect to income taxes was sent for ratification to the Parliament.
Approval of the quantities of diesel fuel determined for payments by the Payment and Intervency Agency for Agriculture for which state aid may be granted under the form of reimbursement
(Order of the Minister of Agriculture and Rural Development no. 819/1 June 2016, published in Official Gazette no. 416/2 June 2016)
The Order approves the quantities of diesel fuel related to the period 1 January 2016 – 31 March 2016, for which state aid may be granted under the form of reimbursement.
The total value of the state aid is of approximative RON 93.91 million.
Amendments and completion regarding the method of managing packaging and waste packaging
(Government Emergency Ordinance no. 38/28 June 2016 for amending and completing Law 249/2015 regarding the method of managing packaging and waste packaging, published in the Official Gazette no. 489/30 June 2016)
The amendments brought by the Government Emergency Ordinance, refer, inter-alia, to the following:
- Manufacturers and wholesale retailers that commercialize goods in returnable packaging should apply a deposit-system for the management of packaging; the procedure for the implementation, control and monitoring of the deposit-system will be approved in 60 days after entering into force of the present Emergency Ordinance;
- The management of waste packaging can be realized by the economic operators individually, by collecting and recycling waste packaging from its own activities or taken from generators or holders of waste, sorting plants, authorized collectors, etc.;
Amendments and completion of the Environmental Fund
(Government Emergency Ordinance no. 39/28 June 2016 amending and completing the Government Emergency Ordinance no. 196/2005, published in the Official Gazette no. 489/30 June 2016)
The amendments brought by the Government Emergency Ordinance, refer, inter-alia, to the following:
- The 3% contribution for income derived from the sale of ferrous and non-ferrous waste does not include any longer goods for dismantling;
- New contributions to the Environment Fund are introduced, as follows:
- a contribution of a certain value, due by economic operators that introduce on the national market electrical and electronic equipment, starting 1 January 2017;
- a contribution of 4 RON / kg of batteries and portable accumulators, due by the economic operators that introduce on the national market batteries and portable accumulators, starting 1 January 2017;
- contributions of a certain value, due by the authorized economic operators for taking over the annual obligations for collection of electrical and electronic equipment waste, respectively batteries and portable accumulators waste, starting 1 January 2019;
- Economic operators are liable to declare the quantities of electrical and electronic equipment waste, respectively batteries and portable accumulators waste introduced on the national market, by 25th of the following month. The the tax is declared and paid annually, by 25th of January of the following year;
- New reporting and payment deadlines are introduced for authorized economic operators taking over the collection of electronic equipment waste, respectively batteries and portable accumulators);
- The references to the old Tax Procedure Code were replaced with the new Tax Procedure Code (i.e. Law no. 207/2015).
Adoption of certain opinions regarding the measures proposed by the European Comission, respectively by the European Economic and Social Commission
(Decisions of the Chamber of Deputies no. 54, 55 and 56/ 22 June 2016, published in the Official Gazette no. 484/22 June 2016)
The Decisions adopt the opinions regarding the measures proposed by the European Commission, respectively by the European Economic and Social Commission on the following:
- Decision no. 54: Communication from the Commission to the European Parliament and Council – Anti-Tax Avoidance Package: Next steps towards delivering effective taxation and greater tax transparency in the EU;
- Decision no. 55: Communication from the Commission to the European Parliament and Council on
the External Strategy for Effective Taxation;
- Decision no. 56: Proposal for a Council Directive laying down rules against tax avoidance practices that directly affect the functioning of the internal market.
Government press release announcing Romanian’s accession as member to BEPS actions
The announcement was published on the Romanian Government web-site:
On 2nd June 2016, the Romanian Government published a press release announcing trough a memorandum Romanian’s accession as member to BEPS actions and participation in the OECD’s inclusive framework.
This will allow Romania to be involved in the achievement of the measures against tax base erosion and transfer of profits and implement them within the national territory.
