The main legislative changes in fiscal domain for 2011

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

During the last days of 2010, were published in the Official Gazette 891/30.12.2010 important changes of the Fiscal Code and of the Regulations for the application of the Fiscal Code, but also of the social insurance legislation and the Fiscal Procedure Code. The governmental decree that stipulates these changes is OUG 117 for the amendment and completition of Law no. 571/2003 regarding the Fiscal Code and reglementation of some financial and fiscal measures.

Amendments to the Fiscal Code relates primarily to: tax, income tax on small companies, VAT, income tax, excise duties, social contributions. Here are the main changes occurring in each of these areas:

• Income Tax
  • extension until 31.12.2011 for the period for which the deduction is limited to fuel costs, although this period was originally set up to 31.12.2010;
  • clarify the situation in which transactions are made with a taxpayer declared inactive under the Order of the ANAF President; the tax authority will not take into account the transactions made by a taxpayer declared inactive, excluding acquisitions and deliveries of goods made in enforcement proceedings.
• The companies’ possibility to choose for the status of microcompany in the following conditions:
  • the status of microcompany has been reintoduced
  • the microcompanies will not pay profit tax, but income tax, the tax rate being 3%;
  • a microcompany is considered a Romanian legal entity that on 31^st December of the previous fiscal year fulfills the following conditions: has from 1 to 9 employees, achieved revenues that did not exceed the equivalent in lei of 100.000 EUR, the registered capital is held by persons, other than state and local authorities, and has other income than those provided in Article 112 / 2, paragraph 6.
  • cannot make an option for the tax system for microcompanies the Romanian legal entities that: are performing banking activities in the insurance and reinsurance area, capital market, except for legal entities performing brokering activities in these areas, having activities in the gambling, consultancy and management; have a registered capital that is held by a shareholder or partner who is a legal entity with over 250 employees
  • to be classified as microcompanies, all companies that meet the above conditions must express this option until 30.01.2011
• Changes regarding VAT:
  • all persons registered for VAT purposes and that achieve a yearly turnover smaller than 35.000 EUR must submit a notice until the 25^th of February next year to fiscal authorities regarding the deliveries and purchasing activities.
  • all persons registered for VAT purposes, which have a lower turnover threshold that entitles them to apply the special exemption regime, they may apply for the cancellation of registration for VAT purposes, but if they exceed the limit are required to re-enroll in the records of the authorities.
• Changes regarding the income tax concern the following aspects:
  • art. 49 from Fiscal Code regarding “Establishment of annual net income from self-employment income based on the rules of income” was changed.
  • There is introduced a new article, namely art. 79 / 1 – “Defining and taxation of income whose source was not identified” according to which the income found by the fiscal authorities, under the Fiscal Procedure Code, and whose source was not identified, will be imposed at a rate of 16% applied the adjusted tax base through the procedures and indirect methods of reconstitution the revenues and expenses. Through the decision to impose the fiscal authorities will determine the amount of tax and excises.
  • There was introduced Article 80 / 1 – “Establish the annual net taxable earnings”, according to which: The yearly net income for the transfer of securities other than shares and transferable securities in case of closed companies is determined as the difference between net annual gains and losses carried forward from previous fiscal years. The yearly net loss from transfer of securities other than shares and transferable securities in case of closed companies, established through the declaration of accomplished income, will be recovered from annual net earnings obtained in the next 7 consecutive fiscal years. Yearly net losses from the transfer of securities other than shares and transferable securities in the case of closed companies from abroad are carried forward and offset against income of the same nature and source, made abroad, for each country, recorded in the next 7 fiscal years.
  • Deadline for submission to the competent fiscal authority of “Declaration of achieved income” is May 15 (including) next year following the year when the income was earned.For incomes earned from abroad, the declaration deadline is May 15 following the year the income was earned (art. 90)
• Changes related to excise duties:
  • publication of harmonized excise level for fiscal year 2011; increasing the rates for certain energy products and cigarettes; eliminating the exemption from excise duty provided for tobacco used for scientific tests and the product quality; maintaining the excise duties on coffee and coffee products for fiscal year 2011; the introduction of new categories of offences in the case of operations with excisable products.
• Social security contributions are stipulated by introducing a new title in the Fiscal Code, respectively the Title IX2, that determines the mandatory social contributions:
  • individual contribution for social insurance and contribution payable by the employer to social insurance budget;
  • individual contribution of health insurance and contribution payable by employer to the sole National Social Security Fund of health;
  • contribution for holiday and health insurance benefits owed by employer to the sole National Fund for health insurance;
  • individual contribution to the budget of the unemployment insurance and contribution payable by the employer to the unemployment insurance;insurance contribution for work accidents and occupational diseases owed by the employer to state social insurance budget;
  • contribution to the Guarantee Fund for payment of salary claims owed by natural person and legal entities who act as the employer according to Law no. 200/2006 regarding the establishment and use of the Guarantee Fund for payment of wage claims, as supplemented and amended.

There is introduced a new title containing provisions that define the contributors to social insurance systems, establish as a general principle that contribution to social security cannot exceed the amount of 5 average gross salaries for each income source.

OUG 117 changes other governmental decrees from social contributions, as well as the Government Emergency Ordinance no. 77/2009 regarding organization and exploitation of gambling.