The main tax changes brought by Package 2

The draft law introduces a series of important changes in the field of taxation, aimed at consolidating budget revenues, restricting tax breaks, combating tax avoidance practices, and reconfiguring certain special tax regimes. The changes affect both corporate and individual taxpayers.

1. Introduction of a new special regime for deducting expenses when calculating income tax

One of the most important elements is the introduction of Article 25¹ into the Tax Code, the special regime for taxpayers who record expenses with affiliated entities located outside Romania. The provisions apply to taxpayers (multinationals) that are not subject to the minimum turnover tax and refer to the limitation of the deductibility of certain categories of expenses related to intellectual property rights, management expenses, and consulting expenses in relation to affiliated entities.

2. Expansion of the categories of income considered as income from independent activities

The category of income from independent activities will also include income earned by taxpayers who obtain income from providing accommodation services, such as income from the short-term rental of more than seven rooms located in privately owned dwellings.

3. Basis for calculating the health insurance contribution owed by individuals who earn income from self-employment

The basis for calculating the health insurance contribution owed by individuals who earn income from self-employment increases from 60 times the gross minimum wage in the country to 72 times the gross minimum wage in the country.

4. Increase in tax rates on investment income

For income in the form of gains from the transfer of securities and derivative financial instruments through an intermediary (broker), the tax rate will change as follows:
– for holdings over one year, a rate of 3%, compared to the current 1%
– for transactions carried out for less than one year, a rate of 6%, compared to the current 3%.

Also, for transactions carried out on one’s own account, without an intermediary, the tax increases from 10% to 16%. A 16% tax will also be applied to income from virtual currency (cryptocurrency) transactions, except for income less than 200 lei/transaction, provided that the total earnings in a fiscal year do not exceed 600 lei.

5.Increase in the tax rate on luxury goods

The special tax on high-value immovable and movable property (residential buildings and cars) (residential buildings > RON 2,500,000; cars > RON 375,000), considered luxury goods, increases from 0.3% to 0.9%.

6.Increase in taxes on residential buildings and land

The increase will be achieved by changing the method of calculating the taxable value of buildings and land, applicable to built or owned areas.

7. Amendments to the Tax Procedure Code regarding payment deferrals

The draft law provides for a reduction in the deadlines for payment of liabilities, which is a condition for maintaining the simplified payment schedule, from 180 days to 60 days.
In addition, for the simplified payment schedule to be granted, a maximum liability ceiling is established, as follows:
– for individuals, liabilities of less than RON 100,000;
– for associations without legal personality, liabilities of less than RON 100,000;
– for legal entities, liabilities of less than RON 400,000.

The changes in the draft mark a significant shift in fiscal policy through important measures such as:
– consolidating the tax base by combating profit shifting;
– reducing existing tax breaks;
– tightening the tax regime for taxpayers considered high risk;
– limiting the deductibility of expenses, etc.