Tax procedure changes from 2020

Starting with the year 2019, law 30/2019 approves Government Emergency Ordinance 25/2018 bringing some amendments and changes to the tax code and the new tax procedure started being applicable since 2019. Therefore, business owners are obliged to deduct finance costs up to 1 million Eur, plus 30% of EBIDTA. Even companies that recognize a division or merge must carry over excess costs of debt and be in line with the new regulations and the Court of Justice of the EU position. According to these new regulations, the limitation of the land area under this treatment is lifter, and the purchase of more buildings for which to pay only 5% VAT by the same person is allowed. In addition, gains resulting from crypto-currencies transactions are also clarified now.

Starting with April 2019, sponsorship expenses and related tax credit for individuals or companies granting them, will fall under new regulations as well. New and essential provisions have been inserted, due to which taxpayers must be allocated to 3 risk classes. Central tax authorities can continue to automatically enroll taxpayers under electronic communications through filling the papers online. The relationship with the tax authority will be established through a mediation procedure that can be initiated by the taxpayer after receiving the payment orders, in order to identify the best solution for erasing al liabilities, even payment reschedule. 

The most important changes brought by Law 30/2019, that was published in the Official Journal of Romania on 17.01.2019, regarding taxation:

Micro-enterprises and corporate tax:

-        The excess cost of debt over 1.000.000 Eur can be deducted when corporate tax is within 30% of the calculation base, instead of 200.000 Eur that was deducted within 10% of the calculation base (EBITDA). This way cases where negative or zero calculation basis will be avoided.

-        Taxpayers that want to take advantage of the sponsorship tax credit can only do so if the beneficiary is registered, in the entity bodies register for which tax deduction is possible.

-        The deadline has also changed at 25^th of the month after the firs quarter of which the tax is due to be paid.

-        Income from adjustments to expected loss due to financial assets is now a new revenue category that can be deducted from the tax base for micro-enterprises that operate in the banking, insurance or capital markets sectors.

-        Social expenditures for which you can deduct 5% of the total amount on salaries, now include cultural vouchers.

-        Controlled foreign companies are excluded from these rules now.

  VAT :

-        A taxable person can now adjust tax base of the payment for services or goods supple cannot be collected after client bankruptcy.

-        Lifting or the restrictions limiting the application of the 5% VAT rate for property to one per individual, and the limit of maximum 250 m2 surface per land.

  Fiscal procedure:

-        3 main risk classes for taxpayers: low risk, medium risk and high risk.

-        Elimination of the obligation of tax authorities to publish on their site the list of individuals with tax liabilities