Situation: An ABC SRL company was a taxpayer on the income tax of micro-enterprises until the third quarter. From the fourth quarter, the company switched to profit tax. ABC SRL made a sponsorship of 10,000 lei in the second quarter. In the second quarter, the company deducted from the micro tax the amount of 3700 lei.
In the third quarter he deducted another 2000 lei from the micro tax. The question is whether the company can deduct, in the fourth quarter, from the profit tax, the rest of the amount of 4300 lei (10,000 lei – 3700 lei – 2000 lei)?
Solution:
First of all, we remind you that only for sponsorships granted under the conditions provided by Law no. 32/1994 on sponsorship can benefit from the ease of their deduction in a maximum of 20% of the income tax of micro-enterprises, as regulated in Article 56 paragraph (1) of the Fiscal Code.
(1^1) The micro-enterprises that carry out sponsorships, according to the provisions of Law no. 32/1994, with the subsequent amendments and completions, for the support of non-profit entities and cult units, which at the date of concluding the contract are registered in the Register of cult entities / units for which tax deductions are granted according to article 25 paragraph (41), as well as micro-enterprises that grant scholarships to students enrolled in vocational-dual education in accordance with the provisions of Article 25 paragraph (4) letter c) of Law no. 1/2011, with the subsequent amendments and completions, decrease the related amounts from the income tax of micro-enterprises to the value level representing 20% of the income tax of micro-enterprises due for the quarter in which they registered the respective expenses.
According to Article 52 paragraph (3) of the Fiscal Code, the calculation and payment of corporate income tax by micro-enterprises that fall under the provisions of paragraph (1) – the micro-enterprise generates revenues greater than 1,000,000 euros – is carried out taking into account revenues and expenses starting with that quarter.
Considering the mentioned provisions, we consider that we cannot determine the profit tax taking into account the sponsorships made at the time when the company was a micro-enterprise.
Therefore, at the time of determining the profit tax, we cannot take into account the expenses with sponsorships made during the period when the company was a micro-enterprise.
According to Article 56 paragraph (1^2) of the Fiscal Code, we find the following provision:
“(1^2) The amounts that are not deducted according to the provisions of paragraph (1 ^ 1) from the tax on the income of micro-enterprises due shall be carried forward in the following quarters, for a period of 28 consecutive quarters. The deduction of these amounts from the income tax of micro-enterprises due, in the next 28 consecutive quarters, is made in the order of their registration, under the same conditions, at each term of payment of the income tax of micro-enterprises. “
Therefore, sponsorships made by a micro-enterprise can be deducted from the income tax of micro-enterprises under the same conditions (within the term of 28 quarters, if the company becomes a micro-enterprise again).
Considering the fact that in the Fiscal Code there is no provision based on which the sponsorship performed can be carried over in case of change of the tax regime, ABC SRL cannot deduct from the profit tax the sponsorships performed in the micro-enterprise regime from the I- III.
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;
– The Methodological Norms for the application of the Fiscal Code (approved by Government Decision no. 1/2016);
– Law 32/1994 on sponsorship, with subsequent amendments and completions.