The summary of the legislative changes in 2018

The year 2018 started with a lot of fiscal changes, contained in various normative acts. This is why we are trying to make a brief recap of the legislative changes that take place this year and a reminder of the main checks and declarations to be made at the beginning of the year:

With the latest tax changes some new information appeared regarding the micro-enterprise regime. They refer to the ceiling up to which a company is consider a micro-company and pays the tax on revenues, not on profits, the extention of this taxation system also to the companies who are now the now excluded, ans also the impossibility of companies with a certain share capital to switch from revenu tax to profit tax. The recent changes also include measures to combat outsourcing of profits made by multinational companies.

According to Government Emergency Ordinance no. 79/2017, published on November 10, starting with 1st of January 2018, will increase the ceiling to which a company becomes a taxpayer on micro-enterprise income, from 500,000 euros (as it is currently) to 1.000.000 euros.

This means that companies with a yearly turnover below 1.000.000 euros will not pay profit tax, but they will pay a 1% tax on the turnover.

The Ordinance no. 79/2017 regarding the amendment of the Fiscal Code approved by the Government on 08.11.2017 was published in the Official Gazette of 10.11.2017. This brings important news for both employees and employers.

The main change is represented by the transfer of contributions from the employer to the employee. Out of the total of 9 contributions currently paid by employers and employees, starting with 2018 there will be only 3 contributions, namely:

Even if it seems hard to believe, in Romania, we will get rid of the stamp requirement!

This provision actually already existed from 2015, when a paragraph of the Law 316 already eliminated the corporate obligation to stamp the claims, declarations or other documents in relation to institutions or public authorities. However, a large proportion of the public sector employees continued to request abusively the application of the stamp on these documents.

In order to improve this situation, on 30 June 2017 it was published in the Official Gazette no. 507 a Government Ordinance that not only reaffirms the lack of stamp obligation, but also qualifies officials`demand to apply the stamp as being abusive.

Thursday, the 20th of July, the Romanian Government adopted a decision through which is the employers will have to pay the CAS and CASS contributions at the level of the minimum wage even for the part-time contracts.

Therefore, under this decision, employers will be required to pay social and health contributions at the level of the minimum wage even in the case of part-time contracts.

The measure is taken even if the salary of the part-time employee, related to the number of hours worked, is lower than the country-guaranteed minimum gross salary. Thus, for example, if the part-time employee earns 600 lei gross, the employer will be obliged to pay the pension and health contribution at the level of the minimum salary of 1450 lei gross.

Starting with 2017 a series of legislative changes will take place. Some are applicable from the 1st of January, the others from the 1st of February. We have grouped them in several main categories:

The corporate income tax:

• The taxpayers engaged exclusively in innovation, research and development activities will be exempted from profit tax in the first 10 years of service;
• Will be extended the deadline for the tax exemption regarding reinvested profit in technological equipment, computers, electronics and peripheral equipment, and also software.

The income tax for microcompanies

The changes in the New Fiscal Code are making 2016 the best year for withdrawing dividends. The dividend tax was reduced from 16% to 5%. It is possible to benefit of this opportunity only in 2016.

If you haven`t already did it, you can still benefit from this tax relief only in December this year.

The only condition that must be fulfilled in order to pay only taxes rate of 5% is that the shareholder must obtain also other income for which he already pays the health insurance contribution. Therefore:

In July  the Law 207/2015 has been published regarding the new Code of tax procedure applicable from 1st of January 2016. As follows:

The new Fiscal Code, adopted in September 2015, brings various of changes, applicable from different data. We will briefly describe below the changes that will be effetive starting with 2016.

Changes in the VAT 

Standard rate of VAT for all goods and services will be reduced from 24% to 19% in two steps: starting from 2016 from 24% to 20% and starting with the 1st of January 2017 will be reduced to 19%.

For the delivery of school textbooks, books, newspapers and magazines, except those intended exclusively or mainly for advertising as well as for the service consisting in allowing acces to the castles, museums, memorial houses, historical monuments, monuments of architecture and monuments of archeology, zoological and botanical gardens, fairs and exhibitions and cultural events, sporting events, cinemas, other than those without the right to deduction it will be applied the reduced rate of VAT to 5%.

This is the time when we all are making plans for the New Year Eve, but did we properly budgeted expenditures for 2016?

And to do this, I propose you to review together the main changes of the new Tax Code and also the new provisions of the Ordinance 50/27.10.2015.

From a first look it’s noted that in 2016 the most vulnerable are individuals who are self-employed or freelancers, and the Fiscal Procedure Code is not meant to solve what really hurts, namely: the introduction of rules and procedural limitations about duration and conduct unannounced checks and anti-fraud, or the removal of the effects on third parties resulting from the declaration as being inactive of a taxpayer.

As it was already announced, starting with the year 2016, the Tax Code will have some changes. Some of them have a direct impact on employees. An amendment provides that the tickets gift in the value of maximum of 150 lei, will no longer be taxed starting with 2016. Another change is linked to the personal deductions.

The competition is unfair when the activity of a trader is achieved by the use of illegal procedures, contrary to commercial usage.

The methods which characterize unfair competition are multiple. Wheter they are acts or deeds contrary to the law and honest practices, they can be grouped into crimes, contraventions and/or civil wrongs.

“Exceptional offer, for only 24 hours!” or “Buy two products and you will receive one for free”. Every day we are bombarded by such messages trough written media, television, radio, on the street or subway, each one trying to make our lives easier, proposing best product or service. There is a whole industry of techniques for promoting and selling products with hundreds of specialized books and courses, which are trying to find the best way to reach consumers, many times through practices that are not the most fair.

The law analyzes two kinds of unfair commercial practices:

At the beginning of 2013 Romania introduced the VAT payment system at collection. A system that led to multiple controversy and, although it is based on a healthy fiscal philosophy, it was implemented with multiple gaps.



But 2014 starts with good news. According to the GO 111/2013 was instituted the option of VAT collection application for taxpayers whose yearly turnover does not exceed 2,250,000 lei in the previous calendar year.

In other words, VAT collection system is not mandatory anymore, it becomes optional, leaving eligible taxpayers to decide whether to apply or not based their economic particularities.



Therefore, taxable persons on January 1, 2014 who already apply VAT collection system will proceed as follows:

 

The beginning of 2014 brings a set of legislative changes in the tax area. The vast majority has been announced at the end of the last year, so there are few who know these modifications and the fact that they will take effect from January 2014.

Among these changes, we are listing here below the ones with impact in the field of labor and social protection:

From September 1, 2013 several changes to the Tax Code and its implementing rules shall take effect. Among them, are worth mentioning :

Introduction of the reduced VAT rate TVA of 9% for backery products

This will apply to the following products:

• all kinds of bread
• croissants, rolls, sticks, pretzels, minibaghete, batons and braids ;
• white wheat flour, milled wheat flour, wheat flour and dark rye flour ;
• triticum spelta and meslin wheat – CN code 1001 99 00, and rye – CN code 1002 90 00

Excise tax will be extended to more products.

New categories of luxury products will be subject of the excise tax, such as:

The recently discussed chenges regarding the minimum wage in Romania became a fact. Thus, in the Official Gazette (Part I, no. 52.2013) was published the Decision no. 23/2013, which states the minimum gross base salary guaranteed in Romania.

The new rates are:

• starting with February 1, 2013, the gross minimum wage is 750 lei per month for a full-time program of 168,667 hours in average per month
• starting with July 1, 2013, the gross minimum wage is 800 lei per month for a full-time program of 168,667 hours in average per month

The beginning of the year brought some changes related to the legal and fiscal status of the microcompanies in Romania. Specifically, based on the Government Ordinance no. 8/2013, published in the Official Gazette no. 54 from 23 January 2013, the article 1121, c) of the Fiscal Code was modified, it’s new content being: „obtained revenues that do not overcome the amount of 65.000 euro”.

In other words, the 100.000 eur limit for revenues that allowed a company to qualify as microcompany, valid until last year, was reduced to 65.000 euro.

According to Government Decision 15/2012 for modifying the Law 571/2003 regarding the Fiscal Code for 2013, the taxpayers with tax residence in Romania and whose revenue during October 1st 2011 – September 30th 2012, does not exceed 2.250.000 RON will be applying the VAT charge on cashed-in system starting January 1st 2013.

In order to comply with these provisions, the taxpayer who is pass to the new system is responsible for submitting, before October 25th, a written notification to prove that revenue during October 1st 2011 – September 30th 2012 (inclusive) did not exceed the 2.250.000 RON limit.

• VAT on cash system does not apply to taxpayers that are part of a single fiscal group.
• VAT on cash system applies only to transactions where goods or services are in Romania.

Transations which are not affected by the new system

Law no. 76/2012 for the implementation of law no. 134/2012 concerning the Civil Procedure Code is the law that brings modifications for commercial companies.
This law will enter into force on 01.09.2012.

Art.79 of law no. 76/2012 stipulates: “In a term of 2 years after the present law enters into force, companies registered in the Commercial Register with the words “commercial company” in their name are required to do the necessary steps in order to replace them with the term “company”. Until completing these steps, the company can function with the name entered in the Commercial Register when the present law entered into force. The registration in the Commercial Register of this mention about the modification of the constitutive act concerning the change of the name of the company is exempt of registration tax”.

The midsummer of 2012 marked a change in the management of Ascent Group. Thus, with the 1st of July, the new financial manager of Ascent Group is Otilia Gal.

Otilia is an alumni of the Faculty of Economics from the University of Timisoara. Over the years she enriched her knowledge by attending numerous courses and specializations in finance and accounting.

Professionally, Otilia has 10 years of experience in finance, both within multinational companies and local companies.

During the last four years Otilia has held the position of financial advisor in the Arad office of Ascent Group Arad, and since the 1st of July 2012 she became the financial manager of Ascent Group.

Tuesday, August 28th 2012, the Government Decision no. 16/2012 was published, modifying and completing Government Decision 92/2003 regarding the Fiscal Procedure Code.

Modifications will apply starting August 31st 2012, except dispositions regarding closing of debts (pct. 3), which will apply starting November 1st 2012. 



Most important changes:



• First step is finding that aberrance.

• First step is finding that aberrance.

Contribution rates of the employers and the employees for 2012 are currently established by the two normative acts: Law No: 294/2011 Law on social state insurance budget in 2012, published in the Official Monitor no. 913 and the Law No: 293/2011- Law on state budget in 2012, published in the Official Monitor no. 914 of 22 December 2011.

Contribution to the social insurances

For 2012, the contribution rates of the social insurances are:

According to art. 134 of the Labour Code, actualised in 2011 with the Law 40/2011, in Romania the legal non-working days are:

• 1-2 January, New Year
• 1st and 2nd day of Easter
• 1st of May, international worker`s day
• 1st and 2nd day of Whitsuntide, 3-4th of June
• Assumption Day, 15th of August
• 1st of December, National Day of Romania
• 1st and 2nd day of Christms, 25-26 December

The people who belong to different religions than the Orthodox one have the right to take two days off for every one of the three annual religious holidays, declared so by the legal religious cults.

More additional proposals for days-off have been made: 24th of January, 10th of May or 30th of November, but these haven`t been aproved yet, still having the project status. Therefore, these days are not presently acknowledged as legal holidays.