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Amendments to the Fiscal Code startig with July 1st 2010

Starting July 1st 2010, new tax and fiscal regulations are applied in Romania, due to the Emergency Ordinance 58 from June 26th 2010, that will affect all sectors of the national economy.

We briefly present the changes brought by this ordinance:

Profit Tax

Article 32 of the Fiscal Code is amended and has the following content:

“Art.32 Any loss realized by permanent headquarters situated in other states other than Member States of the European Union / European Association of Free Trade or which are located in a state with which Romania has concluded a double taxation convention is deductible only from the income earned by that permanent headquarters. read more»

New registered companies don't pay minimum tax in 2010

As by the application rules of the Romanian Tax Code, the companies founded in 2010 pay income tax but do not pay the minimum tax.

This provision is included in art.11^6 of the Implementing Rules of the Tax Code for Article 18:

"11^6. Taxpayers established during the year are not entering under the provisions of Art. 18 para. (2) for the year wehen they are registered at the Trade Registry, but they are required to determine the income tax as by the provisions of Title II "Tax profits" of the Tax Code."

VAT payment after receipt of the amounts

Romanian Senate approved in March 2010 the Law stipulating that corporate taxpayers will have the possibility to pay VAT resulting from the issuing of the invoice to customers within 30 days from receipt of the amounts and not until the 25th of the month following the month in which the invoice was issued.

This amendment is contrary to the European Directive 112/2006, which states as a general rule that the payment liability appears at the time of the delivery of goods, at the date of services provisioning and on the date of receipt of advance payments before delivery or performance.

However, notwithstanding the general rule regarding the generator event and VAT payment, at art. 66 from the European Directive 112, there is stated that EU Member States may stipulate that VAT becomes chargeable for certain transactions or certain categories of taxable persons, the latest at the payment date. read more»

The Minimum Tax or Lump Tax in 2010. Evolution and Expectations

In 2010, in addition to the minimum tax that has got no economical logic, the tax system for micro-enterprises in Romania was adjusted as well, from an income tax based on applying a rate of 3% on revenue, to the implementation of an income tax with a rate of 16%, even further burdening these enterprises that have been already affected by the global economic crisis.

I believe that eliminating the income taxation of micro-enterprises and keeping the minimum tax which, I repeat, has no economical logic, will substantially contribute to the suspension or closure of many companies and certainly the growth of tax evasion in 2010. read more»

How can we use the tax exemption for the reinvested profit?

In the Romanian Official Gazette No.761 of November 9, 2009 was published the Law nr.329 of 05.11.2009 amending the Tax Code with an new Article, namely Article 19.2 paragraph (1) which states a tax exemption on the reinvested profit.

Thus, by law, the profit invested in the production and/or acquisition of equipment (machinery, equipment and work facilities), as stated in subgroup 2.1 of the “Catalogue on classification and normal periods of operating fixed assets, used in order to obtain taxable income” is exempt from tax.

The exemption from tax applies only to assets considered new, by this understanding that they were not used before the publication of these provisions.

Profit invested under Law 329 of November 9, 2009, represents the balance of the profit and loss account, representing the cumulative accounting profit from the beginning of the year and is used within the year when the investment is made. read more»

What news brings us the Fiscal Code in 2010?

2010 is preparing us a series of new amendments to the Tax Code. In addition to those which are still in the planning phase or in the center of public debate, there are some changes that have already become certainties, since they were already published in a legal document, the Ordinance 109 of October 7, 2009 published in Official Gazette no. 689 of 13.10.2009.

The main amendments of the Fiscal Code refers to the place of delivery for services and the finalcial summary statement. Thus, the Ordinance 109 of 07/10/2009 amended Article 133 of the Tax Code, regarding the place of delivery for services.

If until now the place of delivery for services was considered the place where the supplier is established or has fixed office from which services are delivered, once with the amendments of the Ordinance 109 of 2009, under Article 133 paragraph 2), the place of delivery for services became the place where the person that receives the services has the business office. read more»

New taxes and less deductibilities – the latest amendments of the Romanian Fiscal Code

Starting with 1st of May 2009 a few important changes of the Romanian Fiscal Code became effective, through the Emergency Ordinance 34/2009. We present below the most important elements that have been changed.

Introduction of the lump tax rate

One of the main news brought by the Emergency Ordinance 34/2009 is reffering to the introduction of a new type of taxing, the lump tax rate.

In this respect, was introduced for the Romanian legal entities, payers of the taxable profit, the compulsoriness to determine the quarterly tax by comparing the quarterly income tax with the minimum quarterly lump tax rate and the income payment at the higher amount.

To apply the lump tax rate, the amounts corresponding to the minimum tax, determined according to total income registered on December 31st 2008, are: read more»

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