Tax

Romania: 2016 – The Year the Romanian Fiscal Code puts on New Clothes

After lengthy debates, the Romanian legislature has finally approved what is without a doubt the most significant revision of the Romanian Fiscal code since it entered into force on 1 January 2004.

Foreword

The Romanian Fiscal Code has been, for taxpayers and tax professionals alike, an endless source of debate and exasperation, its complexity obvious to anyone who looks at the number of amendments (somewhere in the hundreds) made to this very important piece of legislation since it was first enacted on 1 January 2004.

After a process, which spanned many years the new version of the Fiscal Code was finally published in Romania’s Official Gazette in September 2015. It is a “remake” of the 2004 version, embedding a necessary, even if incomplete, reaction to market realities. The general opinion of the business community and professionals involved in consultations for the new Fiscal Code is that the outcome, though not perfect, is a significant step forward.

As expected, the changes scheduled to enter into force starting on 1 January 2016, are quite numerous and it is no exaggeration that they will have a material impact on doing business in Romania.

For obvious reasons, in this article, we will only focus on

…the main changes…

The New Fiscal Code is abundant with tax rate cuts, which are going to look very appealing to anyone doing or planning to do business in Romania in the immediate future:

(i) VAT – the standard VAT rate will be reduced from 24 % to 20 % in 2016 and to 19 % in 2017. Despite the administrative complications expected from the first reduction in 2016 (mostly because the VAT rate will change right in the middle of the winter holiday season) ultimately this tax rate cut is likely to bring good news to the average consumer who should see prices drop for most goods and services.

(ii) Excise duties – excise duty rates for certain alcoholic beverages and products are going to be reduced in 2016, while those for gasoline and diesel fuel are going to be reduced in 2017. We expect that this will also lead to a drop in prices. In addition, the so-called “non-harmonised” excise duties for certain products (eg, coffee, jewels, hunting rifles, and certain vehicles and boats) will be removed altogether.

(iii) Tax on dividends – the taxation rate for dividend income will be reduced from 16 % to 5 %. In the version of the Fiscal Code published in September 2015, the rate cut was applicable as of January 2017, but a subsequent Government Ordinance published at the end of October 2015 changed the effective date to January 2016. The reduced rate for individuals will be partially mitigated by the introduction of a mandatory health contribution (5.5 %) on dividends starting on January 2017, irrespective of whether the individual also derives active income, eg, from salary, or freelancing. A cap will apply for the monthly contribution base: five times the national average salary (the 2015 average salary is EUR 540/month).

(iv) Tax on constructions – this tax which sparked extensive controversy when it was first introduced in 2014, is finally going to be removed as of 1 January 2017. Historically, the tax was perceived as a tax on investments and it constituted an important deterrent for foreign investors considering bringing their business to Romania.

In addition to these rate cuts, there are a number of other relief mechanisms or incentives that will bring significant benefits to businesses:

(i) The domestic VAT reverse charge rules (ie, the rule that VAT is not paid between traders) will extend to business-to-business sales of real-estate assets and various electronics (eg, smartphones, tablets, and laptops etc). Although this extension’s main purpose is to reduce VAT abusive practices in the relevant market sectors, it will also generate obvious cash flow advantages for various businesses.

(ii) The exemption for reinvested profits available until 31 December 2016 will be extended to other categories of assets for which taxpayers can claim relief. In particular, the relief will be extended to cover also computer hardware and software as well as electronic equipment.

(iii) A clarified definition for Stock Option Plans will be introduced for tax purposes, bringing clarification that should make it less troublesome for multinational companies with Romanian subsidiaries to reward Romanian staff in a tax efficient manner, safeguarding the taxation regime that was previously unclear and risky.

(iv) A new transitory tax regime will be introduced to encourage start-up micro-companies. A reduced micro-company tax of 1 % (down from the standard micro-company tax rate of 3 %) will apply to qualifying micro-companies in the first two years of activity. Additionally, in October 2015 the Government approved the application of the reduced tax rate of 1 % for micro-companies with at least two employees and introduced a 2 % rate for micro-companies with only one employee.

Not all news is good news, however, and the new Fiscal Code is no exception. The not so pleasant changes include:

(i) Local taxes – in particular the building tax regime – will be significantly amended in terms of tax rates, tax base, and taxable period. In particular, as of 2016, the building tax regime will depend not only on the legal status of the landlord (whether legal entity or individual) but also on the purpose of the building, namely whether the building is used for residential or for non-residential purposes. The overall impact will be a significant increase in building taxes, particularly for those buildings owned by individuals. A negative impact in terms of building tax cost is also expected for the energy sector and NGOs that will no longer benefit from the exemptions available in the past.

(ii) Individuals rendering independent services, for example as authorised freelancers or liberal professions, will generally pay higher mandatory social contributions due to the increase of the contribution base for pensions. While before January 2016 individuals were free to choose a pension contribution base, starting from a minimum of approx. EUR 190/month, the new base will be the actual income (less deductible business expenses).

As expected, the changes, which are scheduled to enter into force starting 1 January 2016, are numerous and it is no exaggeration that they will have a significant impact on companies and individuals doing business in Romania…

România: 2016 – Anul in care Codul fiscal imbraca haine noi

Dupa indelungate dezbateri, legislativul Romaniei a aprobat in sfarsit ceea ce este fara indoiala cea mai semnificativa revizuire a Codului fiscal roman de la intrarea acetuia in vigoare in data de 1 ianuarie 2004.

Codul fiscal din Romania a fost, pentru contribuabili si profesionisti deopotriva, o sursa nesfarsita de dezbateri si exasperare, cu o complexitate evidenta pentru oricine se uita la numarul de amendamente (cateva sute) aduse acestei legislatii extrem de importante de cand a fost implementata, pe data de 1 ianuarie 2004.

Dupa un proces care a durat multi ani, noua versiune a Codului fiscal a fost in sfarsit publicata in Monitorul Oficial in septembrie 2015. Aceasta versiune este un ”remake” al versiunii din 2004, care implementeaza o reactie necesara, chiar daca incompleta, la realitatile pietei. Opinia comunitatii de afaceri si a profesionistilor implicati in consultarile pentru noul Cod fiscal este ca rezultatul, chiar daca imperfect, este un pas semnificativ inainte.

Asa cum era de asteptat, schimbarile care vor intra in vigoare de la 1 ianuarie 2016 sunt numeroase si, fara exagerare, vor avea un impact semnificativ asupra modului in care se fac afaceri in Romania.

Din motive evidente, in acest articol ne vom concentra doar pe

…principalele schimbari…

Noul Cod fiscal vine cu o abundenta de reduceri de taxe, care vor fi foarte atragatoare pentru cei care fac afaceri in Romania sau intentioneaza sa faca afaceri in viitorul apropiat:

(i) TVA – cota standard TVA va fi redusa de la 24% la 20% in 2016 si la 19% in 2017. In ciuda complicatiilor administrative care sunt de asteptat odata cu aceasta prima reducere din 2016 (deoarece TVA se va schimba in mijlocul sezonului sarbatorilor de iarna) in cele din urma aceasta reducere a taxei va aduce probabil vesti bune pentru consumatorul final, care ar trebui sa plateasca preturi mai mici pentru majoritatea bunurilor si serviciilor.

(ii) Accizele – cotele accizelor pentru anumite produse si bauturi alcoolice vor fi reduse in 2016, iar accizele pentru benzina si motorina vor fi reduse din 2017. Ne asteptam ca si aceste demersuri sa duca la o scadere a preturilor. In plus, asa-zisele accize ”nearmonizate” pentru anumite produse (cum ar fi cafeaua, bijuteriile, pustile de vanatoare si anumite vehicule si barci) vor fi eliminate.

(iii) Impozitul pe dividende – cota de impunere pentru venituri din dividende va fi redusa de la 16% la 5%. In versiunea Codului fiscal publicata in septembrie 2015, reducerea impozitului pe dividende era aplicabila din ianuarie 2017, insa Guvernul a decis la finalul lui octombrie 2015 ca modificarea va intra in vigoare din ianuarie 2016. Scaderea cotei de impunere pentru persoanele fizice va fi partial compensata de introducerea contributiei de asigurari sociale de sanatate (5,5%) calculata pe dividende incepand cu ianuarie 2017, chiar daca persoana obtine venituri active, cum ar fi salarii sau venituri din activitati independente. Va fi aplicat un plafon pentru baza lunara de contributie: de cinci ori salariul mediu pe economie (in 2015 salariul mediu este de aproximativ 540 EUR/luna).

(iv) Taxa pe constructii – aceasta taxa, care a generat puternice controverse cand a fost introdusa in 2014, va fi in sfarsit eliminata incepand cu 1 ianuarie 2017. Din punct de vedere istoric, aceasta taxa a fost perceputa ca impozit asupra investitiilor si a constituit un important element de descurajare a investitorilor straini care intentionau sa faca afaceri in Romania.

In plus fata de aceste reduceri de impozite, sunt implementate mai multe mecanisme de reducere a poverii fiscale sau de stimulare a investitiilor, care vor aduce beneficii semnificative mediului de afaceri:

(i) Regulile locale de taxare inversa la TVA (mai exact regula conform careia TVA nu se plateste efectiv pentru anumite tranzactii intre comercianti) va fi extinsa si pentru vanzarile intre comercianti care vizeaza active imobiliare si diferite electronice (telefoane inteligente, tablete, laptop-uri). Desi scopul principal al acestei extinderi este acela de a reduce practicile abuzive de TVA in sectoarele de piata relevante, masura va genera si avantaje evidente pentru fluxul de numerar al multor companii.

(ii) Scutirea de la impozitare a profitului reinvestit, aplicabila pana la finalul anului 2016, va fi extinsa si pentru alte categorii de active. Scutirea va fi extinsa in mod special pentru componente si programe de calculator, precum si pentru echipamentele electronice.

(iii) O definitie pentru Stock Option Plan (planuri de optiuni pentru actiuni) va fi introdusa in scopuri fiscale, iar aceasta definitie va reduce din incertitudinile pe care le au multinationalele in Romania atunci cand vor sa isi rasplateasca/motiveze angajatii intr-o maniera eficienta fiscal, respectand un regim de impozitare care era neclar si riscant.

(iv) Un nou regim de impozitare tranzitorie va fi introdus pentru a incuraja microintreprinderile start-up. Se va aplica o taxa redusa de 1% (taxa standard e de 3% pentru microintreprinderi) pentru acele microintreprinderi care sunt in primii doi ani de activitate. In plus, in octombrie 2015 Guvernul a aprobat aplicarea unei cote reduse de impozit de 1% pentru microintreprinderile cu cel putin doi angajati, si a introdus o cota de 2% pentru cele cu un singur angajat.

Nu toate vestile sunt bune, insa, iar noul Cod fiscal nu e o exceptie de la aceasta regula. Printre schimbarile mai putin placute se numara:

(i) Taxele locale – in special regimul de impozitare a cladirilor – vor fi puternic modificate in ceea ce priveste cotele de impozitare, baza de impozitare si perioadele de calcul. In mod special, incepand cu 2016, regimul impozitarii cladirilor nu va depinde numai de statutul juridic al proprietarului (daca este persoana fizica sau juridica) ci si de scopul utilizarii cladirii, mai exact daca respectiva cladire este folosita in scopuri rezidentiale sau nerezidentiale. Impactul general va aduce o crestere semnificativa a taxelor pe cladiri, mai ales pentru acele cladiri detinute de persoane fizice. Un impact negativ asupra costurilor fiscale legate de cladiri e de asteptat si in sectorul energetic sau pentru ONG-uri, care nu vor mai beneficia de scutirile din trecut.

(ii) Persoanele fizice care presteaza activitati independente, de exemplu ca liber profesionisti autorizati sau cei activi in profesiile liberale, vor plati in general contributii sociale obligatorii mai mari, data fiind majorarea bazei de contributie pentru contributia de pensie. Inainte de 2016 persoanele erau libere sa isi aleaga baza de calcul a contributiei pentru pensie, pornind de la un minim de aproximativ 190 EUR/luna, insa noua baza de calcul va fi venitul e fectiv realizat (minus cheltuielile efectuate in scopul desfasurarii activitatii care sunt deductibile).

Asa cum era de asteptat, schimbarile care vor intra in vigoare de la 1 ianuarie 2016 sunt numeroase si, fara exagerare, vor avea un impact semnificativ asupra modului in care se fac afaceri in Romania…