Law no.156 / 2019 for amending art. 25 para. (4) lit. i) of Law no. 227/2015 regarding the Fiscal Code, published in the Official Gazette of Romania (Part I) no. 625 / 26.07.2019, is addressed to the taxpayers on profit
With the entry into force of the aforementioned normative act, respectively July 29, 2019, the fiscal facilities granted for the sponsorship have been improved.
Thus, the percentage of the turnover in which sponsorships can be made, by which the tax on the profit is reduced, increases from 0.5% to 0.75%.
It is important to note that the cumulative condition of not exceeding 20% of the profit tax due on payment is kept.
The rest of the regulations applicable to the sponsorships remain unchanged, in the sense that the sponsorships represent tax-deductible expenses when calculating the tax on profit and sponsorships can be made only to the persons who have this right, provided by Law no. 32/1994, with subsequent modifications.
According to the Law of sponsorship, article 4, paragraph (1) the beneficiary of the sponsorship can be:
- any non-profit legal entity, which operates in Romania or is to carry out an activity in the fields: cultural, artistic, educational, scientific – fundamental and applied research, humanitarian, religious, philanthropic, sports, human rights protection , medical-sanitary, assistance and social services, environmental protection, social and community, representation of professional associations, as well as maintenance, restoration, preservation and enhancement of historical monuments;
- public institutions and authorities, including specialized bodies of public administration, for the activities provided to art. a);
- also, under the conditions of the present law, programs or programs of the television or radio broadcasting unities, as well as books or publications from the fields mentioned at art a) can be sponsored.
- any natural person with domicile in Romania whose activity in one of the fields provided at art a). is recognized by a non-profit legal entity or by a public institution active in the field for which sponsorship is requested.
Thus, legal entities that have a social role, such as non-patrimonial entities – associations and foundations, public institutions or radio and television programs, can be beneficiaries of the sponsorship.
Sponsorship must be established in a sponsorship contract. The sponsorship contract is concluded in written form, specifying the object, value, and duration of the sponsorship, as well as the rights and obligations of the parties.
Important! When sponsoring a worship unit or entity without a patrimonial purpose, in order to benefit from the fiscal facilities of the sponsorship, these sponsorship beneficiaries must be registered in the Register with the sponsor’s beneficiaries (Register of worship entities/units for which is granted tax deductions), held by the tax authority. The other sponsored legal entities do not have this obligation.
If a sponsorship is carried out and its value is greater than the tax reduction corresponding to the two parameters (0.75 thousand of the turnover, without exceeding 20% of the profit tax), then the sponsorship can be carried forward for a period of time of 7 years and the facilities can be applied respecting the same conditions.
We remind that by March 25 of the following year, the taxpayers who make quarterly payments or by February 25 of the following year for the annual taxpayers, will submit the form 107 – Informative statement regarding the beneficiaries of the sponsors, patronage, private scholarships.
Register of cult entities /units for which tax deductions are granted:
This Register is organized by the Tax Authorities (ANAF) according to the Regulation of the State Tax Office (OpANAF) no. 819/2019, it is public and can be consulted by accessing the link https://www.anaf.ro/RegistrulEntitatilorUnitatilorCult/
The registration in the Register, by the beneficiary of the sponsorship, is done on the basis of the request of the entity, by submitting online form 163 “Application for registration / cancellation in / from the Register of entities / units of worship for which tax deductions are granted“, together with the certificates of fiscal attestation issued by local fiscal authorities in whose evidence this is registered as a tax payer and local taxes, if the following conditions are met cumulatively (at the time of submission of the application):
- carries out activity in the field for which it was established, based on the declaration on its
own responsibility;
- fulfilled all the tax declarative obligations stipulated by the law;
- has no outstanding fiscal obligations to the consolidated general budget, older than 90
days;
- filed the annual financial statements, provided by law;
- was not declared inactive, according to art. 92 of the Fiscal Procedure Code.
The request is solved within a maximum of 5 days from submission, and the Cult entity/unit that meets all the above conditions is registered in the “Register of Cult entities/units for which tax deductions are granted” with the date of approval of the decision regarding the approval of the application for registration in the mentioned Register.
As conclusion, the new limits will apply from the third quarter of the current year (2019). Thus, companies that have sponsored the first two quarters, will calculate their deductions as before (0.5%), following that the sponsorships granted during the last 6 months of the year will be deductible with up to 0.75% of the turnover.