Any company that owns a building is obliged, according to the provisions of law 571/2003 – Fiscal Code, to pay building tax, a tax that is calculated annually, according to art. 253, by applying a tax rate on the inventory value. Tax rates are set by local governments, so they differ depending on the area, being between 0.25% and 1.50% inclusive.
Tax rates are set by local governments, so they differ depending on the area, being between 0.25% and 1.50% inclusive. In the case of a building that has not been revalued, the share of the building tax is established by the local council / General Council of the Municipality of Bucharest between
- 10-20% for buildings that have not been revalued in the last 3 years prior to the reference fiscal year;
- 30-40% for buildings that have not been revalued in the last 5 years prior to the reference fiscal year (rates applicable from 1.01.2012).
Revaluation of buildings is one of the methods that can bring major benefits by reducing the tax paid. From a financial point of view, the revaluation is profitable, the costs of a revaluation report being relatively low compared to the tax payable if the revaluation did not take place.
In the case of a building that has been revalued, according to the accounting regulations, the taxable value of the building is the book value resulting from the revaluation, registered as such in the accounting of the owner, legal entity.
An appraiser will calculate the taxable value of the building using one of the following financial techniques:
- updating
- capitalization
- discount rate
and one or more of different valuation methods, as follows:
- equity methods
- yield methods
- market methods
Items in a group of property, plant and equipment are revalued simultaneously to avoid selective revaluation and reporting in annual financial statements of values that are a combination of costs and values calculated at different dates (if a fixed asset is revalued, all other assets from the group to which it belongs must be re-evaluated).