What declaration do you have to file starting this year?
February 21, 2024Renata Ban
Another impact change for companies with the advent of GEO 115/2023 is the obligation to report high tax risk assets within Romania.READ MORE
Starting this year, companies are earning a 6-month deadline from the fourth quarter tax return for deciding what amounts to pay as sponsorship.Read article
Lawmakers have radically changed the legal framework for the decrease in corporate and micro-tax sponsoring under Law 322/2021. In short, the idea is that, as of 1 January 2022, taxpayers of income tax and corporate tax cannot carry forward the amounts left after the decrease in sponsorship from business taxes to the next seven years. But, by way of exception, for sponsorship by 31 December 2021, carryovers are still possible until 2028.
As before, sponsorships made, treated as non-deductible expenses in the calculation of corporate tax, may be deducted from corporate tax payable up to the value determined as the lower of:
However, from 1 January 2022 (or from the date on which the amended tax year 2022 begins for taxpayers with a modified tax year), the following procedure shall apply:
Thus, the sponsorships made in 2021 which exceed the value for the financial and fiscal year 2021 are the last such amounts which can be carried forward and usable in the future until 2028. Similarly, taxpayers who pay taxes on the income of the micro-enterprise retain the right to reduce the tax on the income of the micro-enterprise, with the sponsorships made, within 20% of the income tax due in that quarter.
Since 1 January 2022, taxpayers who have closed the previous financial year and submitted their income tax return for the fourth quarter shall calculate the value for the reduction of the micro-enterprise income tax for the whole financial year. If the amount of sponsorship does not exceed 20% of the tax, the taxpayer may, within 6 months of the date of submission of the tax return for the fourth quarter, redirect the sponsorship difference. The rules on deferral of sponsorship beyond the value for use in the next 28 consecutive quarters are also changed, as in the case of corporate tax payers.
We therefore believe that this change will result in an increase in the amounts that non-profit organizations can benefit from. The procedure, model and content of the re-routing form will be adopted by order of the president of the ANAF.