Last updated: 22 July 2024
The new procedure approved by ANAF Order No. 3562/2024 and published in Official Gazette No. 643 on July 5, 2024, establishes the rules that profit taxpayers must follow to redirect part of their profit tax to sponsorship and/or patronage. In addition to this procedure, the order also provides the template, content, and instructions for completing several forms, including Form 177, "Request for Redirecting Profit Tax."
Prior to rolling out the main provisions of the ANAF procedure, it should be noted that sponsorship and / or patronage are regulated under the law no. 32/1994 on sponsorship.
The ANAF Order comes into force and applies to the amounts pertaining to the financial year 2024 or the modified financial year starting in 2024.
Conditions for redirecting profit tax
Taxpayers may redirect part of the profit tax due to the State budget (based on a sponsorship contract signed priory with the beneficiary of the sponsorship) before the legal deadline for submitting the annual profit tax return (and not within 6 months as in the previous years) by filling in the Form 177 electronically.
The amount of the profit tax or the amount of the profit tax that may be redirected is calculated by deducting from the minimal value established under the Law no. 227/20151 of the amounts accounting for sponsorship and / patronage, granted to the beneficiary entities in the year concerned by the annual profit tax return and the amount carried forward (provided in the Form 101 ”The profit tax return” corresponding to the respective year).
Taxpayers are not allowed to redirect the profit tax established at the level of the minimum tax on the turnover set under the law.
Taxpayers are not allowed to redirect the profit tax calculated at the level of the minimum tax on the turnover. It should also be noted that the tax treatment of private scholarships changed too, therefore expenses related to private scholarships are no longer in the same category with sponsorships.
They are considered social expenses deductible in the limit of 1,500 lei / month, alongside other expenses from the same category, without though exceeding 5% of the expenses with the staff.
For establishing the amount of the profit tax hereinabove, the tax credit and exempted / reduced profit tax must also be deducted, in accordance with the provisions of the OPANAF no. 3.386/2016. The obligation to pay the redirected amounts lies with the competent tax body.
Sponsorships can benefit non-profit entities or worship units to the extent that the beneficiary is registered in the Registry of entities / worship units for tax deductions. Are exempted UNICEF and other international organizations, which are not subject to such registration. The beneficiaries can be non-profit legal entities, worship units, UNICEF, and other international organizations as well as other beneficiaries according with the laws on sponsorship and libraries.
Filing of the request for redirecting
The taxpayer may opt to redirect the profit tax by filling in the Form 177. The option to redirect the profit tax may concern one or several non-profit entities, without exceeding the legal amount. In tax groups redirecting falls to the legal person in charge. Requests that are not filed within the legal deadline and requests that are not corrected in due time shall not be processed by ANAF.
Porcessing of the requests to redirect
The specialized service of ANAF processes the requests, verifies the fulfilment of profit tax obligations, and notifies taxpayers in case of errors. The notifications are sent via the virtual private space (SPV). ANAF maintains un electronic register of requests received from each taxpayer, and where there are multiple requests from the same taxpayer, they are analysed chronologically. Incompliant requests are rejected. A list for redirecting is drawn up and the entities non-registered in the Tax registry are excluded.
Other situation of redirecting the tax
In addition to profit taxpayers, natural persons obtaining revenues from salaries or pensions may also redirect 3.5% of the annual revenue tax due by submitting the Form 230 (also electronically). The deadline for filling and submitting the said form is May 25.
It should also be noted that as a consequence of the modification of the legislation under the GEO no. 115/2023, starting with 2024, the amounts corresponding to sponsorships and patronage are no longer deductible from the tax on the revenue of microenterprises or the revenues obtained from independent activities.
Notes
- This can be, as appropriate: (1.) the amount calculated by applying 0.75% to the turnover, where the accounting regulations do not define the indicator turnover, this limit is determined according with the norms; (2.) the amount representing 20% of the due profit tax.