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The latest CIT, VAT and taxation of foreign entities updates in Romania

Romania

Romania has pushed through various tax updates to legislation in recent months. Taxand Romania specifically looks at new measures concerning corporate income tax, taxing foreign entities and VAT.

Corporate income tax
Following the intoduction in the Fiscal Code of the provisions regarding the profit tax relief on reinvested profit for the period 1 July 2014 – 31 December 2016, clarifications are brought with respect to the application of this facility, relating to:

  • The definition of certain terms such as manufacture of technological equipments, new technological equipments
  • The method for determining the tax exempt profit
  • Examples for computing the tax relief on reinvested profit, in different situations

Tax on income obtained from Romania by non-residents and tax on the representative offices of the foreign companies established in Romania
Following the introduction in the Fiscal Procedure Code of the general procedure for the refund of withholding taxes and its cancellation from the Fiscal Code, the corresponding provisions from the Methodological Norms are also repealed.

VAT
Following the allignment of the national legislation to the Decision of the European Union’s Court of Justice in case C-424/12 SC Fatorie SRL against the Bihor General Directoarte of Public Finance, the provision according to which in certain situations the application of the normal VAT regime for transactions subject to reverse charge mechanism as a result of the application of simplification measures was accepted, is repealed.

Discover more: The latest CIT, VAT and taxation of foreign entities updates in Romania


Your Taxand contact for further queries is:
Angela Rosca
T. +40 21 316 06 45
E. angela.rosca@taxhouse.ro

Taxand's Take

Multinationals and individuals alike should further investigate all recent tax developments in Romania to ensure they remain compliant with the local tax laws and keep afresh of the current tax environment. 

Taxand's Take Author

Angela Rosca
Romania

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