Last updated: 29 October 2015
NEW FISCAL CODE: FIRST CHANGES
Although the new Fiscal Code will enter into force on January 1st; 2016, it is already subject to several amendment projects... An Ordinance provides, among others, changes regarding the taxation of revenues obtained by microenterprises or dividends, as well as sanctions for entities who fail to comply with their obligation to provide documents to the tax authorities. These potential changes are presented to you hereinafter.
THE OBLIGATION TO INFORM THE TAX AUTHORITIES
As provided by article 494 paragraph 12 of the new Fiscal Code, in order to clarify a taxpayer’s real tax status, the tax authority is entitled to request tax-related information and documents; such information and documents may also be requested in order to identify potential taxpayers, the taxable assets that they own or any other taxable sources. Notaries, lawyers, bailiffs, police and customs authorities, the personnel of the Departments for Vehicle Registration or the personnel of the Passport Agency, as well as any other entity holding information or documents regarding taxable assets or taxpayers have to provide such information or documents to the tax authority, free of charge. (The applicability of this article may be questioned, taking into account that it refers to entities subject to professional secrecy).
Failure to communicate the information requested by the tax authority or to comply with the deadline of 15 days from the date when such information was requested is considered an offence and is sanctioned by a fine between Lei 500 and 2,500.
LEGAL REGIME FOR MICROENTERPRISES
In accordance with the Fiscal Code in force, a microenterprise is a Romanian legal person, whose share capital is not held by the State or the local authorities and which, among others, obtains over 80% of its revenues from activities other than management and counselling. (Observation: please note that, because of a typing error, our article of September 24 regarding microenterprises contains the phrase “over 80% of their revenues from management and counselling activities”, and not the contrary...). In accordance with the Fiscal Code in force, microenterprises are subject to a 3% tax on revenues.
As provided by the new text, a company can be considered a microenterprise if it obtained revenues inferior to the equivalent in Lei of EUR 100,000. (If this threshold is exceeded, it will pay a 16% tax on revenues). The new Fiscal Code provided the same 3% tax and a 1% tax for newly created microenterprises with at least one employee (if certain conditions were met).
The new text will establish a gradual tax on revenue for microenterprises, of 1%, 2% or 3%, depending on the number of employees:
- 1% tax on revenue for microenterprises with 2 or more employees;
- 2% tax on revenue for microenterprises with 1 employee
- 3% tax on revenue for microenterprises without employees
TAX ON DIVIDENDS
Pursuant to the new Fiscal Code, the tax on the dividends paid by a Romanian legal person to another legal person should have been reduced from 16% to 5% starting with January 1st, 2017. The latest changes provide that the 5% tax on dividends will apply as of January 1st, 2016, the date of entry into force of the new Fiscal Code.