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Legal & Fiscal

The Annual financial statements for 2009 are submitted only to the Trade Register

In January 28, 2006 was published the Law 441/2006, which amended the Law. 31/1990 on trading companies introducing new measures on the submission of annual financial statements. Although initially the measures should have been applied from January 1st, 2007, its implementation was delayed until January 1, 2010. Thus, since 2010, the annual financial statements and related addendums in Romania will be submitted only to the Trade Register Office.

According to the existing notification on Trade Register's website “annual financial statements for 2009 are submitted only in the county offices of the Trade Register respectively in the Trade Register Office of Bucharest. " 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»

New regulations regarding the registration of individual employment contracts

Under current legislation, employers in Romania are required to register the individual employment contracts at Labor Inspectorates within 20 calendar days from their closing and to transmit them to the General Registry of Evidence of Employees within 5 days.

Due to some new regulations, as a measure against tax evasion, the Labor Ministry published the GD. 37/2010 on January 20th, 2010 which states that employers must register in the General Registry of Evidence of Employees the employment contracts and the identification data of employees - name, surname, personal identification number, date of employment, position, type of contract - not later than the previous day of the beginning of work by the employee. The employment contract must be submitted online or presented at the Labor Inspectorate on the same date, the term of 5 days given to employers to communicate this information at the Labor Inspectorates being eliminated. read more»

Starting with January 1, 2010 micro-enterprises no longer exist in Romania

According to the communication of the Ministry of Public Finance of Romania, on January 27, 2010, starting with January 1, 2010, the provisions of Title IV ‘Taxes on the Income of Micro-enterprises ", the application regulations, as well as other provisions incident to this system, are not longer produceing legal effects.

In accordance with the provisions of Art. 107 of Law no. 571/2003 regarding the Fiscal Code, the taxation system for micro-enterprises had a limited application in time, ending on December 31, 2009, by way of regulating tax rates only for the years 2007-2009. read more»

New regulations in the activity of the Romanian Trade Registry

On December 29th, 2009 the Romanian Government issued the Emergency Order number 16 ofor the establishment of new measures for registrations in the Trade Registry, legal provision published in the Official Gazette of Romania no. 926 of December 30rd, 2009.

This emergency ordinance shall enter into force 15 days after its publication in the Official Gazette and applied until the publishing of the regulation of registration made by commercial registers. Within 6 months from the effective date of this Emergency Ordinance, the Government will adopt the proposal of the Ministry of Justice, for the law on the establishment, organization and operation of the profession of commercial registrator.

The legal provision comes as a result of crowded courts with a large number of cases and procedures related to business flow. 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»

Uncertainty regarding the tax rate for micro-enterprises in 2010

The Government Ordinance amending the Tax Code which will apply from January 1, 2010 has been adopted and does not contain any provision on the reduced tax of 3%.

According to the Tax Code for 2010, published by the National Tax Administration Agency, micro-enterprises will pay from January 1, 2010 an income or profit tax of 16%, as the reduced income tax of 3% applies only until 31 December 2009, as indicated in the Article 107 of the Tax Code:

“The tax rate on micro-enterprise's income is 2% in 2007, 2.5% in 2008, 3% in 2009”.

The Finance Ministry has expressed its intention of not changing the tax rate of 3% for micro-enterprises, with the possibility of extending its application for a further year. These are only expressed opinions, as there is no legislation in this regard till today.

If this tax rate will disappear, all the advantages that firms bearing the status of micro-enterprises benefited from, will be abolished from 2010. 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»

December 25 – the date when Romanians will be able to pay the taxes online

The portal e-Romania will be launched on December 25th with the first ten services. So whether you must pay a tax on a good or a fine, starting with this date you can do it directly on internet, saving any unnecessary travels or lossing time staying at the endless queues.

Later on, the portal will cover other areas such as education, health and culture.

A better news is coming, but for legal entities: within maximum 89 days, all companies will be able to present the balance sheets and pay all the fees online.

According with the World Bank, Romania has currently one of the most bureaucratic tax administrations in the world.

If on December 25 the portal will be really launched , then we could say that we are witnessing a great step that Romania is doing towards information technology and, implicitly, to improve the communication between the State and its custumers, the taxpayers.

Bulgaria – now even easier to start-up a business!

Bulgaria is trying to become more and more attractive for investors. One of the most recent changes in the Bulgarian legislation, voted on 02.10.2009 decreased the minimum start-up capital for the limited liability companies from BGN 5000 to BGN 2, a symbolic amount, representing the equivalent of 1 euro.

By applying this measure it’s considered that the level of entrepreneurship in Bulgaria will increase. The Bulgarian Government is aiming to stimulate young people's wish and desire to become entrepreneurs, considering that “entrepreneurs who are capable of an idea to make a successful business are the lifeblood of any economy and a key factor in creating jobs, growth and competitiveness of the economy”.

The principle of "Think Small First" is recommended also by the European Commission to member states to adjust local legislation in order to minimize administrative barriers to small businesses and create favorable conditions for its emergence and development.

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