Legal & Tax Updates

Tax Flash No. 7/2014

Emergency Ordinance 8/2014 regarding the amendment and completion of certain normative acts and other fiscal-budgetary measures was published in the Official Gazette 151/2014

We mention below the main amendments and completions:

Fiscal Code

Corporate Income Tax

• Incomes from the sale/disposal of participation titles held in a Romanian entity by a legal person resident in a state with which Romania has not concluded a double taxation treaty are taxable

Withholding Tax

• The European Union legislation also applies in Romania’s relationships with the countries with which the European Union has concluded agreements providing equivalent measures (before this provision referred to the member states of the European Free Trade Association)

VAT

• The provisions of the Fiscal Code regarding the place of supply of telecommunication, radio and television services and electronically supplied services were aligned to the provisions of Directive 112/2006/CE and of Council Implementing Regulation (EU) no. 1042/2013, applicable starting with January 1st, 2015
• The special regime provided for taxable persons established outside the Community that supply electronic services is also extended to telecommunication, radio and television services, and can also be applied by taxable persons established within the Community, but which are not established in the Member State of consumption. These provisions shall enter into force starting with January 1st, 2015. Thus, from that date forward the services will be taxable at the place where the beneficiary as a non-taxable person is established
• The settlement of the refundable VAT or payable VAT, cumulative for a fiscal period, shall not include the amounts set forth by the tax inspection through decisions whose execution was suspended by the courts. These amounts shall be included in the VAT statement of the fiscal period during which the suspension of the decision stopped

Excises

• If the tax warehouse authorisation has been revoked, a new authorisation may be issued after a period of at least 6 months from the date when the revocation decision took effect, irrespective of whether the decision was appealed or not
• The law defines the consumers for which the sales with premiums do not apply for excise products subject to marking through stamps/banderoles

Fiscal Procedure Code

• The fiscal authority may provide the information related to a taxpayer’s fiscal liabilities to any applicant, with the written consent of the taxpayer concerned
• The conflict of competence of the tax authorities is defined
• The following reporting obligations regarding residents of other EU member states are introduced:
  • the obligation of income payers to report the following amounts paid to non-residents: incomes from employment, remuneration paid to directors and other persons assimilated to them, income related to life insurance products, pensions;
  • the obligation of taxpayers who are residents in other EU member states to report the income from immovable property located in Romania
• The selection of taxpayers for a tax audit is conducted based on a risk analysis
• The certification of tax returns becomes optional, but is a criterion for assesing the taxpayer’s risk with respect to the selection of entities to be audited by the tax authorities
• Means of evidence are defined as any item that proves a fiscal fact, including data stored on any media and audio-video recordings
• The seizure of bank accounts can be established only after a period of 30 days from the notification of the summons
• The threshold established for solving the VAT reimbursement requests with a subsequent tax audit is increased to RON 45,000. The exceptions in which the VAT amounts are reimbursed with a subsequent tax audit, irrespective of the VAT amount requested for reimbursement, are also provided. These provisions shall enter into force starting with the VAT return for February 2014
• The late penalty interest is reduced from 0.04% to 0.03% per day of delay
• Anti-fraud inspectors may perform operative and unannaunced audits, as well as thematic audits
• The taxpayer is entitled to interest for the receivables resulting further to the cancelation of an administrative fiscal act which were settled before cancelation
• Details are brought with regard to the assessment of exigibility of amounts to be reimbursed from the state budget, in the context of their compensation with the liabilities of the respective taxpayer
• If the income payer withheld an income tax higher than the amount legally owed, the payer will reimburse the difference to the taxpayer, regularizing it with the same type of tax obligations due for the fiscal period when the refund was made
• The threshold representing the disputed amount based on which the competence to solve the appeals against fiscal administrative acts is determined is of RON 5 million