A. Main changes to the Tax Code

  • Romania
  • 10/03/2017
  • BCLAW Cringureanu & Partners

We list below the most important changes that Government Emergency Ordinance no. 25/2017 has brought to the Tax Code (Law no. 227/2015). With certain exceptions, the changes will enter into force starting January 1st 2018.

Corporate tax

  • The tax regime applicable to corporate tax payers for expenses incurred in relation to the disposal of receivables has been amended to restrict the right to deduct these expenses to 30% of the receivable’s value. Currently, these expenses are fully deductible under the general deductibility rule for expenses incurred for business purposes.

Tax on foreign representative offices established in Romania

  • The amount of tax due will be of RON 18,000. The tax is currently EUR 4,000.
  • The full tax will now be due by the last day of February of the assessment year.
  • When a new Representative Office is set up, it must declare and pay the tax within 30 days. The tax is calculated from the first day of the month in which the office was set up and up to the end of that year.
  • If a Representative Office is closed, the taxpayer is required to file a tax return within 30 days of the date of closure. The tax is recalculated for the period of activity from the beginning of the year to the first day of the month following that in which the office was closed.

Excise duties

  • The Ordinance increases excise duties on certain energy products (gasoline, diesel) with a first increase of RON 0.16/litre starting September 15, 2017. Starting October 1st 2017, the excise duties for these energy products will increase by a further RON 0.16 /litre.

Social contribution

  • Medical subscriptions paid by the employers are not subject to social contributions within the limit of the RON equivalent of EUR 400 per year/employee.

Personal income tax

  • The income obtained from independent activities carried out in Romania is deemed to be Romanian sourced, irrespective of whether it is received in Romania or abroad.

Likewise, income from intellectual property rights is deemed to be Romanian sourced if received from a Romania payer or from a Romanian PE of a non-resident.