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Key Amendments to The Fiscal Code


The Romanian government recently introduced key amendments to the Fiscal Code. This was via an Emergency Ordinance, no. 24/2012 covering Profit Tax, Income Tax, VAT, Withholding Tax, Excise Duty and other taxes. Taxand Romania discusses these changes in brief, and assesses what impact they are likely to have on Romanian taxpayers.

The key amendments covered are as follows:
Profit Tax
The deductibility of operating, maintenance and repair expenses related to vehicles used by employees with management or administration positions internally. Until now this was limited to one vehicle per person and will now also be limited to 50% of such expenses.

Income Tax
The provisions regarding the limitation of deductibility to 50% for all expenses related to vehicles with a maximum authorised total weight below 3,500 kg or with no more than 9 passenger seats, including the driver's seat, owned or used by the taxpayer, which are not exclusively used for business purposes, apply for the computation of income tax as well.

Withholding Tax
As of 1 January 2013, Directive 2011/16/UE regarding administrative co-operation in the field of taxation, transposed in Government Ordinance no. 92/2003 will enter into force and Directive 77/799/CEE regarding mutual assistance between competent authorities of member states in the field of direct taxation and taxation of insurance premiums is repealed.

The 50% limitation of the VAT deduction right applies also to rental and leasing operations, as well as for expenditures (e.g fuel, repairs, operating expenses) related to vehicles which have a maximum authorised total weight below 3,500 kg or with no more than 9 passenger seats including the driver's seat, owned or used by the taxpayer and which are not used exclusively for business purposes.

Excise and other special taxes

New provisions were introduced with respect to the marking and coloring of heating oil with NC 2710 19 61 up to NC 2710 19 69 codes and any other energetic products assimilated in terms of excise level, as well as related transitory measures, offenses and sanctions.

Taxand Romania provides a complete look at the key amendments to the Fiscal Code

Taxand's Take

Taxpayers should note that these provisions will enter into force as of 1 July 2012.

For taxpayers that benefit from state aid in the form of subsidies from the state budget for the completion of their income, the tax liabilities related to the period to which the subsidy refers should be settled first.

Businesses should note that new provisions are introduced regarding the special regime of tax liabilities on the payment of which depends the maintenance of the authorisation, accord or similar administrative act.

Your Taxand contact for further queries is:
Angela Rosca
T. +40 21 316 06 45


Taxand's Take Author