State eyes revenue growth from private sector: Company buildings to be taxed according to market value

Newsroom 28/07/2014 | 10:07

The government will conduct a radical change in the way that companies are taxed for their buildings, writes Mediafax. At the moment, companies are charged by the State according to the official value established by accounting documents. The state wants buildings to be taxed based on an outside evaluation report, similar to market value, which would then lead to building taxes increasing.

Buildings are taxed according to their value when they become an asset of the company, value that is registered by the accounting department.

The latest version of the Fiscal Code shows that the Government wants to increase its revenue from building taxes and will base them on market value as a result. The authorities argue that the real value of a building can be very different than the value declared by the company that owns it. Accountants may use different formulas to calculate a building’s value.

“In order to have a unitary approach, we will drop the tax based on accounting value and we will in stead consider the value of the building according to an evaluation report written by an expert evaluator”, according to the document.

Moreover, the Government argues that the International Monetary Fund recommended they change the formula for calculating company building taxes.

Therefore, companies will have to pay a tax of 0.1 percent of taxable value for residential buildings under their property. For non residential buildings, the levy varies between 0.25 percent and 1.5 percent of taxable value, established according to the new criterion.

If the taxable value has not been updated in the last three years prior to the fiscal year in reference, based on a report from an authorised evaluator, the tax quota will be between 5 and 10 percent of taxable value. The exact quota will be established by the local council.

 

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