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Government issues Decision no. 77/2014
The Romanian Government have published Decision no. 77/2014 regarding amendments and completions of Methodological Norms for the application of Law no. 571/2003 regarding the Fiscal Code. Taxand Romania provides a summary of the key measures.
Corporate income tax
- The Decision introduces new specific provisions with respect to the deductibility of losses resulting from the adjustment of the value of receivables acquired from the nominal value to the acquisition cost, according to the accounting provisions effective starting 1 January 2014
- The Decision mentions what documents are required in order to benefit from the tax exemption applicable for income from dividends received from legal entities established in third countries (ie tax residence certificate, affidavit and documents proving the fulfilment of the ownership conditions)
- Completions are brought with respect to the fiscal credit for sponsorship, namely the introduction of the method for determining the turnover according to the applicable accounting regulations and the correlation with the provisions of the Fiscal Code regarding the possibility to carry forward the sponsorship expenses for a period of 7 years
Withholding tax for income derived by non-residents from Romania
The correlation of the Methodological Norms with the recent amendments brought to the Fiscal Code regarding the decrease of the holding period (for the minimum 10% holding in the share capital of the Romanian legal entity) from 2 years to 1 year necessary in order to benefit from the tax exemption for dividend income paid by Romanian legal entities to non-resident legal entities, according to the European Directive regarding the common fiscal regime which applies to the parent companies and their subsidiaries established in EU member states.
A taxable person not established in Romania which performs occasionally transactions for which it is liable to pay the Romanian VAT due, but is not required to register for VAT purposes in Romania, is liable to provide the beneficiaries (in order to exercise the deduction right) the invoices issued for those occasional transactions, as well as a copy of the decision regarding the VAT payment method for the supplies of goods and/or services performed occasionally.
Also published in Thomson Reuters' Taxnet Pro, 24 February 2014
The amendments brought by the Decision enter into force starting with 12 February 2014, the only exceptions being for provisions regarding the situation in which direct excise duties exemption for natural gas or electric energy is granted, which shall enter into force starting with 1 April 2014.