Important amendments to the Fiscal Code - Government Ordinance 8 (1)

Government Ordinance (GO) no.8 for amending and supplementing Law no.227 / 2015 on the Fiscal Code was published in the Official Gazette no.832 of August 31, 2021, with applicability from September 3, 2021.

The main changes related to the profit tax:

Changes regarding the fiscal year in the case of foreign companies that have the place of exercising the effective management in Romania:

In the case of foreign legal entities that have the place of exercising the effective management in Romania, when a taxpayer is established during a fiscal year, the taxable period starts from the date of registration with the central fiscal authority.

We specify the fact that the other rules provided by the Fiscal Code regarding the date of the beginning of the taxable period in the case of a taxpayer that is established during a fiscal year, remain unchanged, ie:

– from the date of its registration with the Trade Register, if it has this obligation according to the law;

– from the date of registration in the register kept by the courts or other competent authorities, if it has this obligation, according to the law;

– for the permanent establishment, from the date on which the foreign legal entity begins to carry out, in whole or in part, its activity in Romania,

Tax regime for dividends received from Member States of the European Union:

One of the conditions for which the dividends distributed to a Romanian legal person, parent company, by a subsidiary located in a Member State, not to be taxable when calculating the fiscal result, is for the Romanian legal person to pay profit tax according to the provisions of the title II, without the possibility of an option or exemption, or another tax that replaces the profit tax, according to the national legislation.

We emphasize the fact that the current provision specifies that the Romanian legal person to pay profit tax, according to the provisions of title II, without the possibility of an option or exemption.

This measure is necessary to comply with the provisions of Article 2 of Directive 2011/96 / EU, EU Pilot file EUP (2021) 9893.

New fiscal rules for taxpayers who declare and pay the annual profit tax, with advance payments and who benefit from reductions of the profit tax following the increase of the own capital (EMERGENCY ORDINANCE 153/2020)

Taxpayers who declare and pay the annual profit tax, with advance payments, and who fall under the provisions of article I of the Government Emergency Ordinance no. 153/2020 for the establishment of fiscal measures to stimulate the maintenance / increase of equity completing some normative acts, makes the advance payment for the first quarter of each fiscal year / modified fiscal year at the level of the amount resulting from the application of the tax rate on the accounting profit of the period for which the advance payment is made, until the 25th of the month following the quarter I.

This rule is also applicable to taxpayers who are in the second year of the mandatory period provided for in Article 41 paragraph (3) of the Fiscal Code.

The application of the rule for calculating the advance payment for the first quarter begins with the fiscal year 2022, respectively with the modified fiscal year starting in 2022, and ends with the fiscal year 2026, respectively with the modified fiscal year starting in 2026, as the case may be.

The amounts to be deducted from the annual profit tax, provided in article I paragraph (12) letter a) of the EMERGENCY ORDINANCE no. 153/2020, is completed with “Other amounts that are deducted from the profit tax, according to the legislation in force”.

Modification of the fiscal regime of the adjustments for the depreciation of receivables (from 30% to 50%):

We mention that until now they were deductible up to a percentage of 30% of their value, if certain conditions were met, but the deductibility was introduced at 50%.

Thus, according to GOVERNMENT ORDINANCE no. 8/2021, the taxpayer has the right to deduct reserves and provisions / adjustments for depreciation, only in accordance with this article, as follows:

(….)

c) adjustments for impairment of receivables, recorded according to the applicable accounting regulations, up to a percentage of 50% of their value, other than those provided in letters d), e), f), h) and i), if the receivables cumulatively meet the following conditions: ”

(…) Considering that on January 1, 2022, the provisions adopted by Law no. 296/2020, for the full deduction of these adjustments, a measure that has a significant budgetary impact, would enter into force, it is necessary to modify them.

The provisions related to the increase of the deductibility of adjustments for the depreciation of receivables enter into force on January 1, 2022.

Changes regarding the payment term of the distributed dividend tax, but not paid until the end of the year:

If the dividends distributed, according to the law, have not been paid until the end of the year in which their distribution was approved, the related dividend tax is paid, as the case may be, until January 25 of the following year, respectively until 25 of the first month of the amended fiscal year following the year in which the distribution of dividends was approved (current provision: “the annual financial statements have been approved”).

These provisions do not apply to distributed and unpaid dividends until the end of the year in which their distribution was approved (current provision: “the annual financial statements have been approved”), if the Romanian legal entity receiving the dividends meets the conditions provided in paragraph ( 4) on the last day of the calendar year or on the last day of the modified fiscal year, as the case may be. ”

In short: the reference to the annual financial statements has been removed, as dividends can also be distributed from accounting periods.

1. Income tax:

There are non-taxable incomes, the incomes received as a result of the transfer of the property right over the real estate and movable goods from the personal patrimony, other than the gains from the transfer of the securities and / or the investment gold provided in ch. V – Income from investments, as well as other than those defined in ch. IX – Income from the transfer of real estate from personal patrimony.

The phrase “financial gold” is replaced by the phrase “investment gold”, in order to correlate it with article 94 of the Fiscal Code.

Clarification of the possibility of determining the net income from the transfer of the use of goods in the real system:

Taxpayers who obtain income from the transfer of the use of personal assets, other than income from leasing of agricultural goods and income from renting for tourist purposes of rooms located in personal property have the right to opt for determining the net income in real system, based on accounting data .

Taxpayers who obtain income from the transfer of the use of goods and do not determine the net income from the transfer of the use of goods in the real system, based on accounting data, have no obligations to complete the Register of fiscal records and management of accounting records.

The option to determine the net income in real system, based on accounting data, is mandatory for the taxpayer for a period of 2 consecutive fiscal years and is considered renewed for a new period if the taxpayer does not request a return to the previous system, by completing the declaration regarding the income tax and the social contributions due by the natural persons and the submission of the form to the competent fiscal body until May 25, inclusive, of the year following the expiration of the 2-year period.

For the taxpayers who start the activity during the fiscal year, the option for determining the net income in the real system is exercised within 30 days from the beginning of the activity..

clarification of the situation of taxpayers who in a fiscal year made income from renting for tourism purposes a number of over 5 rooms, located in personal property, regardless of the number of homes in which they are located, in the sense that it is established that the obligation to determine the annual net income in the real system, based on the accounting data, according to the provisions of article 68 and to complete the Register of fiscal evidence, to be established for the following fiscal year.

Therefore, the method of determining the net income (income norm or real system) is established for the following year, depending on the number of rooms rented for tourism purposes during the fiscal year of income.

Taxpayers who in a fiscal year have earned income from renting for tourism purposes a number of over 5 rooms rented for tourist purposes, located in personal property homes, regardless of the number of homes in which they are located, determine in the next fiscal year , the annual net income in real system, based on the accounting data, according to the provisions of article 68, and have the obligation to complete the Register of fiscal evidence.

Clarification of the situation of taxpayers who in 2021 made income from renting for tourism purposes a number of less than 5 rooms rented for tourism purposes, located in personal property, regardless of the number of homes in which they are located and determined the annual net income in the real system, based on the accounting data, respectively, in 2022 they determine the annual net income based on the income norms.
Amending the provisions on the tax regime established in the case of dividends distributed to individuals, so that the provisions regarding distributed dividends but which were not paid until the end of the year in which the annual financial statements were approved, to be applied to all distributed dividends and unpaid, respectively the payment term is until January 25, inclusive, of the year following the one in which their distribution was approved.
Basically, this change concerns the situations in which the dividends / gains obtained as a result of holding shares were distributed, but which were not paid to shareholders / associates / investors until the end of the year in which their distribution was approved, the dividend tax /earnings to be paid by January 25 inclusive of the year following the distribution.
In the case of dividends / earnings obtained as a result of holding shares, distributed, but which were not paid to shareholders / associates / investors until the end of the year in which their distribution was approved, the dividend / gain tax is paid until January 25 inclusive of the year following the distribution.
The introduction in the category of non-taxable incomes of incomes from the cultivation of fodder plants, in the surface of up to 2.0 ha inclusive.

These provisions shall enter into force on January 1, 2022.

Clarification of the method of determining the tax due in the case of gambling income obtained as a result of participating in gambling characteristic of casinos, poker clubs, slot machine silos, with a value higher than the non-taxable ceiling of 66,750 lei.

Therefore, the tax due in case of income obtained as a result of participating in gambling characteristic of casinos, poker clubs, slot machines and lotteries, with a value higher than the non-taxable ceiling of 66,750 lei, is determined by applying the scale provided in art. paragraph (2) Fiscal Code on each gross income received by a participant, and the amount of 667.5 lei is deducted from the result obtained.

Clarification of the fact that in the case of the purchase of fiscal electronic cash registers, the acquisition cost is deducted within the limit of the tax due.

The annual tax due is established by taxpayers in the single declaration on income tax and social contributions due by individuals for income earned in the previous fiscal year, by applying the rate of 10% on net annual taxable income determined according to Article 118, from which it is deducted, within the limit of the tax due, the acquisition cost of the fiscal electronic cash registers, as defined in article 3 paragraph (2) of the Government Emergency Ordinance no. 28/1999, republished, approved by Law no. 64/2002, with the subsequent modifications and completions, put into operation in the respective year.

Clarification of the use of the amounts received from the income tax by the non-profit entities / cult units that carry out non-profit activities, respectively that these amounts be used for this purpose.

Non-profit entities that are established and operate under the law, as well as religious units benefit from the amounts provided in paragraph (1) of article 123 ^ 1 CF if at the time of their payment by the tax authority or employer / income payer is listed in the Register of Entities / cult units for which tax deductions are granted.

The amounts received from the annual tax due must be used for the purpose of carrying out non-profit activities.

Regulations regarding the Application “230”:

The measure takes into account the regulation at the level of primary legislation, of the possibility for the taxpayer to submit the form 230 “Application regarding the destination of the amount representing up to 3.5% of the annual tax due” to non-profit entities / religious units, considering that this method is currently provided in the Circular of the Minister of Finance no. 888/2018.

The non-profit entity / cult unit has the obligation to send by electronic means of remote transmission, to the competent fiscal body a form by which it centralizes the requests received from taxpayers in accordance with the procedure established by order of the president of the A.N.A.F.

Legal basis:

– Government Ordinance (GOVERNMENT ORDINANCE) 8/2021 for amending and supplementing Law no. 227/2015 regarding the Fiscal Code;

– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions.