Tax alert 3 – Law regarding the cancelation of certain tax obligations

Tax alert 3 – Law regarding the cancelation of certain tax obligations

On 15 January 2018, the President of Romania, Mr. Klaus Iohannis has signed the decree for promulgating the Law on canceling certain fiscal obligations.

The law provides the cancellation of the following fiscal obligations:

Income tax and social contributions related to income earned from transfer of real estate

The cancelation will cover the differences of principal fiscal obligations, namely the income tax and the social contributions, and the accessory fiscal obligations related to these, imposed by the tax authority by means of a tax decision communicated to the tax payer, subsequent to the reclassification of income derived from the transfer of real estate assets from the personal patrimony of the individual as income derived from independent activities, in the fiscal periods ending on 1 June 2017, and that are not paid until the current law comes into force.

Moreover, the tax authorities shall not reclassify income derived by individuals from transfers of real estate from their personal patrimony as income derived from independent activities and will not issue a tax decision related to such a reclassification, for periods preceding 1 June 2017.

VAT differences for income from agriculture activities

VAT differences will be canceled, as well as the fiscal obligations related to such activities for tax periods prior to 31 December 2016, established by a taxation decision communicated to the tax payer until the date when this law will enter into force, as a consequence of exceeding the exemption threshold of RON 220.000 provided by the Romanian Fiscal code, by the individuals, authorized individuals, individual enterprises and family enterprises having the seat of economic activities in Romania and which performed agricultural production, as well as processing of agricultural products by other methods than industrial ones or provided agricultural services using own handiwork and/or specific equipment. Moreover, the tax authorities would not settle those differences between VAT amount and penalties and will not issue any impose decisions for periods before 31 December 2016.

Other aspects

Individuals, who have already paid the fiscal obligations canceled by the present law, will have the right to be reimbursed with amounts paid, based on an order which will be issued by NAFA within 30 days from the date when the present law comes into force.