Gov’t passes Tax Code draft, sends it to Parliament

The Tax Code and Tax Procedure Code drafts were passed on Wednesday by the Government and will be submitted to Parliament for debate and final approval, with the Senate being the first notified chamber in this case.

According to Agerpres, the main tax policy decisions regard cutting the Value-Added Tax (VAT), cutting the social security contributions, taxing microenterprises stimulatingly, repealing the dividend tax, cutting the flat income tax, cutting excise tax, repealing the tax on special structures, as well as establishing a framework for local rates and taxes.

As far as the VAT cuts are concerned, it is about adjusting the standard value on all goods and services from a current 24 percent to 20 percent starting on January 1, 2016, as well as downwardly adjusting the VAT on livestock and live fowls of domestic species, meat, fish, dairy products and sub-products, fowl eggs, edible fruit and preparations thereof, from a current 24 percent to 9 percent as from January 1, 2016.

The new Tax Code also mentions further VAT cuts from 20 per cent to 18 per cent starting on January 1, 2018.

Prime Minister Victor Ponta explained about the repealing of the dividend tax that the measure is designed to encourage ploughing the profits gained in Romania back in Romania.

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As far as the cuts in the VAT and excise duties are concerned, Ponta said the measures will be phased in a timeframe spanning until 2018-2020.

He also added that the new Tax Code will provide a “flexible and modern framework for local rates and taxes”.

Staff