Romania’s Ministry of Finance issues new draft bill: Simplified VAT for farmers, extended tax exemption for reinvested profit

Newsroom 21/09/2016 | 15:53

The Ministry of Finance has announced a second package of measures aimed to make it easier for Romanians to pay taxes and to reduce the overall tax burden for companies.

The draft bill that changes the Fiscal Code and Fiscal Procedure Code was put up for debate.

“The purpose of this new simplification package is to encourage the payment of taxes online, and reduce the administrative burden for individuals and the business environment. In addition, there are proposals that stimulate investments and the professional training,” said the minister of Finance, Anca Dragu.

Among the changes there is the option of taxpayers to prove that they made a certain payment using online baking. In addition, the blocking or unblocking of bank accounts will be done in real time, in the case of tax payers that have debts.

The Ministry has also proposed a simplified VAT regime for farmers.

“For deliveries of agriculture products/services, farmers will not have to respect the provisions of the regular VAT regime, respectively: to register for VAT purposes after exceeding the exemption threshold of RON 220,000, to collect VAT, to issue bills, to hold journals for sales/acquisitions or other data for VAT, to issue VAT return papers etc,” said the Ministry of Finance. This measure would apply for individuals and also for family run businesses.

The MFP is also looking to extend the tax exemption for reinvested profits, which would apply for tax payers that invested in technological equipments, computers, IT systems.

Authorities are also planning to grant tax facilities to companies that provide professional qualification training. The MFP plans to include the Fiscal Code provisions regarding the deduction of expenses for companies that provide theoretical and/or practical training for students or for other categories of people that are in schools.

“At present, there are rules that make it possible to reduce from the profit tax the expenses for private scholarships granted by companies to students in certain limits,” said the Ministry.

Authorities are also planning to lower the threshold for micro enterprises taxation regime application by reducing the share capital on the creation of such a firm from EUR 25,000 to EUR 10,000.

The MFP is also looking to offer benefits for tax payers that recover their VAT code similar to those that never lost it.

In addition, the Ministry of Finance has proposed the elimination of the provision that asks for the mandatory inclusion in the Intra-EU Registration for tax payers that are doing intra-EU operations (intra-EU deliveries or acquisitions).

The authorities are planning to drop other mandatory registration procedures, such as in the case of retailers dealing with products with excises for which the excise was paid. For instance, these companies will not be required any more to register at the specialized institution handling such operations.

Ovidiu Posirca

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