What’s new, what’s old in tax in 2015?

The beginning of 2015 has brought important changes in tax and accounting law, which may impact your business. Additional tax compliance obligations, as well as the international evolution regarding fight against BEPS (‘base erosion and profits shifting) modify the context of the tax strategy of tax payers in general, and of multinational enterprises particularly.

We present you a short summary of these changes and evolutions, as well our thoughts on desirable features of a tax strategy for 2015.

First of all, the accounting rules have changed since 1^st of January 2015. The simplified accounting system applicable since 2011 to the economic operators that in the previous financial year recorded a net turnover below the RON equivalent of EUR 35,000 and total assets worth lower than the RON equivalent of EUR 35,000, which no longer complies with the new Community accounting framework represented by Directive 2013/34/EU, has been abrogated starting January 2015, and replaced by the new simplified European financial reporting system. In addition, firms are reclassified in compliance with the relevant European rules into three categories, the area of entities that may apply the new simplified system being thus expanded.

The accounting rules for individuals obtaining income from independent activities are also going to be changed. They have the possibility to choose applying the single-entry bookkeeping or the double-entry bookkeeping system in order to conduct their accounting operations. Furthermore, they have a new obligation to fill in the Taxpayers’ Records, so that their taxable net annual income should be established.

Taxation has seen no so many changes compared with other years, but with big impact.

From 1 January 2015, the VAT rules for telecommunications, broadcasting and electronic services have changed. They will always be taxed in the country where the customer belongs, regardless of whether the customer is a business or consumer, regardless of whether the supplier is based in the EU or outside. The Mini One Stop Shop came into force allows taxable persons supplying telecommunication services, television and radio broadcasting services and electronically supplied services to non-taxable persons in Member States in which they do not have an establishment to account for the VAT due on those supplies via a web-portal in the Member State in which they are identified. This scheme is optional, and is a simplification measure, allowing the taxable persons to avoid registering in each Member State of consumption.

Revenues from gambling have seen also major changes in taxation. They are now subject to a 1% withholding tax applicable to all the amounts gained by a participant in gambling. The revenues from gambling, which are worth more than the RON equivalent of EUR 15,000, will be taxed at a 16% rate, while those in excess of the RON equivalent of EUR 100,000 euro are taxed at a 25% rate.

In the side of tax compliance, the Chamber of Tax Consultants published new rules for the certification of taxpayers’ tax returns. The Rules apply for the certification of the tax returns prepared by taxpayers that are either natural or legal entities that choose to have their returns be certified by a tax consultant before being submitted to the competent tax authority. According to a change of the Tax Procedure Code occurred in 2014, submitting certified tax returns may help the tax payers to score better in the tax risk assessment analysis made by the tax authorities when establishing what tax payers will be subject to tax audits. The Rules focuses on internal procedures of the tax payer ensuring reliable sources and flows of information for the preparation of the tax returns, as well as on correctness of the tax treatment of the transaction.

Other interesting change refers to the gradual replacement (until November 2016) of the paper roll-type fiscal memory with a digital memory and the connection of the new cash registers to the surveillance and monitoring system of the National Tax Administration Agency (ANAF).

At international level, the work on the directions designed by OECD for fight against BEPS continued, with the ultimate goal of bringing the international tax rules into the 21st century.

As you may see, taxes are becoming a concerted action on a national as well as international basis. In order to avoid risks and take advantage of opportunities, the necessity to implement an adequate tax compliance system cannot be ignored. It is time to act and we recommend you important directions, like reviewing the facts and figures for all entities of the Group, identifying the tax risk profile, reviewing internal procedures, agreeing on tax strategy for Romania and Group level, drafting tax procedure manuals, implementing and monitoring being essential.

Nadia Oanea, Senior Manager, Tax Services, Baker Tilly Romania

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