Tax Flash No. 5/2022 – Law No. 370 for the approval of Government Ordinance No. 16/2022 was published in the Official Gazette
22.12.2022 – Law No. 370 for the approval of Government Ordinance No. 16/2022 amending and supplementing Law No. 227/2017 on the Tax Code, abrogating certain normative acts and other financial-fiscal measures was published in the Official Gazette no. 1228
For the measures provided by GO 16/2022, please refer to out Tax Flash No 3/2022 published on our website.
The approval Law No. 370/2022 makes the following main amendments to GO 16/2022:
- Dividend tax
It is clarified that interim dividends distributed during 2022 are subject to the 5% dividend tax rate, without re-computation of the tax, following the adjustment based on the annual financial statements for 2022.
- Corporate income tax
The deduction for research and development expenses is granted for activities of applied research and/or experimental development activities (as opposed to technological development activities as provided by law until now), relevant to the activity carried out by the taxpayer.
- Tax on microenterprises’ revenues
For the qualification as a micro-enterprise, the EUR500,000 threshold applies starting with the income for 2023 (not by reference to data registered at 31 December 2022), with corporate income tax due from the quarter in which the threshold is exceeded.
Revenues from tax consultancy services is excluded from the limit of 20% for the revenues obtained from advisory and management services.
Legal entities engaged in HoReCa activities owe corporate income tax for the revenues from other activities (than HoReCa activities), starting with the quarter in which any of the following conditions is met, for the entire period in which the taxpayer exists:
- more than 20% of their total revenues are obtained from advisory and/or management services;
- render activities excluded from the scope of application of the tax on microenterprises’ revenues;
- revenues from other activities exceed the equivalent in RON of EUR 500,000.
The measure applies from 1 January 2023.
- Income tax and mandatory social contributions
The annual base for calculating the social security contribution is modified, in case of persons obtaining income from independent activities and/or income from intellectual property rights, from one or more sources and/or income categories, the cumulated amount of which is at least equal to 12 minimum national gross salaries, in force at the date of filing of the Single Tax Return regarding the income tax and the social security. This will be the income indicated by the taxpayer, which cannot be lower than:
- the level of 12 gross minimum wages per country, in the case of income between 12 and 24 gross minimum wages per country;
- the level of 24 gross minimum wages per country, in the case of income of at least 24 gross minimum wages per country (as opposed to the original form of GO 16/2022 which provided for the application of the ceiling of 24 minimum wages for income above 24 minimum wages).
The annual base for calculating the health insurance contribution is modified in case of persons deriving income from independent activities, income from intellectual property rights, income from a collaboration with a legal entity, income from assigning the right of use over assets, income from agricultural activities, forestry and fish farming, income from investments and income from other sources, from one or several sources and/or categories of income, the cumulated amount of which is at least equal to 6 gross national minimum salaries, in force at the date of filing of the Single Tax Return regarding the income tax and the social security contributions owed by natural persons, as follows:
- the level of 6 gross minimum wages per country, in the case of income between the minimum 6 and up to 12 gross minimum wages per country;
- the level of 12 gross minimum wages per country, in the case of income between a minimum of 12 and up to 24 gross minimum wages per country;
- the level of 24 gross minimum wages per country, in the case of income of at least 24 gross minimum wages per country (as opposed to the original form of GO 16/2022 which provided for the application of the ceiling of 24 minimum wages for income above 24 minimum wages).
- The excise duty and other special duties
Starting 1 January 2024, a new rule on the level of excise duty on alcohol and alcoholic beverages is introduced. This provides that the excise duty rate applicable to these products on 1 January each year is updated by the increase in consumer prices over the last 12 months, computed in September of the previous year of application, compared to the period October 2022-September 2023.
- Local taxes and duties
A new building tax exemption is introduced for new or rehabilitated residential buildings for which the owners carry out at their own expense works to increase energy performance, for the installation of photovoltaic electricity systems or for certified ecological systems for the collection and treatment of wastewater from own consumption.
As regards the new manner of computing the taxable value for residential/non-residential buildings, it will be applicable as from 1 January 2025 (as opposed to 1 January 2023 as foreseen in the original form GO 16/2022).
- Government Emergency Ordinance 193/2002 regarding the introduction of modern payment systems
With regard to the obligation for legal entities engaged in retail, wholesale and service activities to accept debit, credit and prepaid cards as means of payment, the turnover threshold of EUR 10,000 – RON equivalent (provided for in the initial form of GO 16/2022) is replaced by the threshold of cash receipts during a year with a value greater than RON 50,000.
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