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Tax Implications of Amends to Fiscal Code
The Romanian governement have introduced new amendments and completions to the Fiscal Code. Taxand Romania explores the implications of these for key tax areas.
With regards to mergers, spin-offs, partial divisions, transfers of assets and exchanges of shares in which companies from two or more EU Member States are involved, the fiscal loss recorded by the transferring company will be recovered by the Romanian permanent establishment of the receiving company.
Income from activities performed under contracts/civil conventions concluded under the Civil Code derived by taxpayers that perform independent economic activities, or who are freelancers, is not imposed via the withholding tax mechanism.
Value Added Tax
Missing goods shall no longer be deemed as supplies of goods for which output VAT should be self-charged. Instead they
shall be covered by the provisions regarding the adjustment of VAT deduction, with certain exceptions. Therefore, in case of thefts, there will be new supporting documents required so as not to adjust the VAT initially deducted.
The provisions regarding the warehousing regime and movement and receipt of excisable goods under a suspension regime will now also apply to energetic products. Warehousekeepers that produce alcoholic beverages other then beer cannot benefit from the specific reduced excise duty.
Social Security Contributions
Income payers compute, withhold and transfer social security contributions for individuals that obtain income, imposed in a withholding tax regime, other than those who perform independent economic activities or freelancers and are registered for tax purposes.
Mulitnationals conducting business in Romania should take note of the amendments and completions to the Fiscal Code, and comply accordingly. It is important to note that the majority of these amendments will not come into action until January 2013, however it would be advantageous to investigate whether this applies across the board.