2019 started with a series of amendments in the tax field, changes that will enter into force throughout the year and will influence the activity of taxpayers in several ways. We highlight below the main changes brought by Law 30/2019, published in the Official Gazette on January 17.
A. Amendments to the Fiscal Code
I. Corporate income tax
1. Deductibility of financing costs
increase of the deductible annual threshold on the excess indebtedness costs to the RON equivalent of EUR 1,000,000 (initially this threshold was set as the RON equivalent of EUR 200,000).
increase of the second deductibility threshold to 30 percent of the specific calculation base (i.e., the accounting profit adjusted with the elements specified in the Fiscal Code).
introduction of provisions regarding the situation of a taxpayer who ceases to exist as a result of a merger / splitting operation and which has carried over the overpayment of the debt, as well as for the taxpayers who incur a loss. For the latter, expenses that fall within the EUR 1,000,000 threshold are deductible.
2. Donation and sponsorship activity
in order for taxpayers to apply for the donation and sponsorship option, respectively private scholarships, the tax authorities will prepare the registry of non-profit entities/cult units, for which tax credits are allowed, which will be publicly available for consultation on the tax authority’s website. Sponsorships granted to non-profit entities not listed in this register are not eligible for tax credit.
taxpayers (natural persons) can dispose of an amount representing up to 3.5 percent of the income tax, which they may choose to grant for the support of non-profit entities and cult units, respectively of granting private scholarships under the conditions of the law.
for certain types of income subject to withholding tax, taxpayers may opt for the employer/income payer to compute, withhold, declare and pay the amount up to 3.5% of the income tax to certain beneficiaries, within the payment deadline for the income tax. If the agreement is concluded with the employer/income payer, the latter is responsible for checking the beneficiaries in the registry of the tax authorities. If the entities for which the employees have opted to grant part of the income tax are not entered in the Registry, the employers/income payers have the obligation to deny payment of the amounts to these entities.
II. Income tax
specific provision is included in the legislation classifying revenues from digital currency transfers as income from other sources.
the gain derived from transactions with digital currencies is not taxed (i) if it is below the level of RON 200/transaction and (ii) if the value of the total gain obtained within a fiscal year does not exceed the level of RON 600.
III. Value Added Tax
1. Adjustment of the taxable base
the provisions covering the possibility to adjust the VAT taxable base for bad debts arising from the bankruptcy of the beneficiary or following the implementation of a reorganization plan are amended – in case of bankruptcy, the adjustment may be performed starting (i) with the date of the sentence, or, as the case may be, of (ii) the final court ruling through which the bankruptcy was decided.
if the bankruptcy took place prior to 1 January 2019 and no final judgement was issued, the adjustment shall be made within a 5 years period, as of 1 January 2019.
2. Reduced VAT rate for sale of real estate properties to individuals
for the sale of real estate properties with an usable area of maximum 120 sqm (excluding household annexes) and with a value not exceeding RON 450,000 (VAT excluded), the reduced rate of 5% will be applied, regardless of the number of acquisitions made by the same individual.
IV. Excise duties
details are included regarding the solutions that can be used by the authorized warehouse keeper/ importer, the registered consignee/consignor for creating the guarantees, namely:
o placing an amount of money at a unit of the State Treasury;
o through a guarantee letter/guarantee insurance policy issued under the terms of the law by a credit institution/insurance company registered in the European Union and the European Economic Area, authorized to operate on the territory of Romania, in favour of the territorial fiscal authority where the economic operator is registered as a taxpayer.
B. Amendments to the Fiscal Procedure Code
1. Ex-officio registration of taxpayers in the electronic communication system
the tax authority will be able to register ex-officio taxpayers in the electronic communication system by means of remote transmission.
for taxpayers registered ex-officio who did not access the electronic communication system within 15 days from the communication of the registration data, the tax authorities will communicate documents by publishing them at the headquarters of the competent tax authority and on its internet page.
2. Changes regarding the outstanding obligations
a taxpayer is not considered to have outstanding tax liabilities if the corresponding amount is less than or equal to (a) the amount to be refunded/repaid for which a claim was submitted or (b) to the amount that the taxpayer has to collect from the tax authorities.
3. Mediation procedure
the mediation procedure is introduced for the enforcement claims received by the taxpayers, who have 15 days from receiving such claim to notify the tax authorities about the intention to start the mediation procedure. Within maximum 10 days from the receipt of the notification, the tax authority has the obligation to organize the meeting with the taxpayer and the result of the mediation is recorded in the minutes.
the enforcement procedure does not start from the date when the debtor notifies the tax authority of the intention to start the mediation process, however the tax authority may order precautionary measures during the mediation procedure.
4. Enforcement procedure
a new provision is introduced, according to which enforcement procedure is suspended or does not start for the tax liabilities assessed through tax administrative acts challenged and guaranteed according to the provisions of the Fiscal Procedure Code, not only by means of a bank guarantee letter, but also when other guarantee means are in place, such as cash guarantee with the State Treasury, mortgage, pledged etc. The enforcement procedure continues or begins after the tax administrative acts have remained final in the administrative or legal appeal channels.
Law 30/2019 approves the Government Emergency Ordinance no. 25/2018 and brings certain amendments to the initial content of this ordinance, regarding: (a) Law 227/2015 regarding the Fiscal Code and (b) Law 207/2015 regarding the Fiscal Procedure Code, as subsequently amended and modified.
This article is written with the contribution of DLA Piper Romania Tax team and Tudor Nedelea (photo), Head of Tax Practice at the law firm.