In Official Gazette no. 93 of February 2, 2023, the MADR/MF joint regulation no. 396/2022/883/2023 approving the procedure for calculating, collecting and paying the tax and the obligations of declaration referred to in article 4² of law no. 17 /2014 on some measures regulating the sale of agricultural land in the countryside and amending Law No. 268/2001 on the privatization of companies that manage public and private land owned by the State for agricultural use, and on the establishment of the State Property Agency.
We remind you that according to Article 42, Paragraph (1) of Law No. 17/2014, the agricultural land located in the province can be sold by sale within 8 years from the date of purchase, the sellers being obliged , to pay a tax of 80% on the positive difference between the value of the agricultural land at the time of sale and at the time of purchase, calculated according to the indicative value determined by the expert opinion drawn up by the Chamber of Notaries or the minimum value, determined by the market study carried out by the Chamber of Notaries during this period
Thus, according to the Procedure approved by Order 396/2022/883/2023, the tax established in article 42 paragraph (1) of the law is calculated and collected by the notary public before the authentication of the notarial deed of sale of the agricultural land located in the countryside and is declared by the notary public in full as income to the state budget, monthly, up to and including the 25th of the month following the month in which it was collected, according to the law.
The declaration of the tax is made by filling in and submitting the form 100 “Declaration on payment obligations to the state budget”, in which the tax collected is highlighted, separately, according to article 42 paragraph (1) of the law.
The statement regarding the payment obligations to the state budget is submitted to the competent central fiscal body by notaries public, together with the “Border regarding the distribution to the administrative-territorial units of the amount of …, representing additional tax from the sale of agricultural land located outside the city pertaining to the month .”
Please note that the tax can be paid by the taxpayer either at the notary public’s office, in cash or via a POS terminal, or by bank transfer to the notary’s account. The model of the receipts to be used by the notary public to collect the tax in cash will be established and printed by the National Union of Notary Publics of Romania.
In the case/situation in which the tax is paid by bank transfer, the proof of payment shall be made according to article 1504 of Law no.287/2009 on the Civil Code, republished, with subsequent amendments and additions.
The document of payment of the tax by the taxpayer shall be mentioned in the authentication document.
In the application of article 42 of the law, no tax is levied in the case of alienation by sale of agricultural land located outside the village acquired by inheritance, sharing or other legal acts of acquisition, with the exception of the sale contract.
The refund of the tax withheld from the transfer by sale of agricultural land located outside the city, due in accordance with the provisions of article 42 of the law, collected by the notary office and transferred to the state budget, related to transactions terminated after the payment of the tax, is made at the taxpayer’s request by the competent fiscal authority in whose territorial area this domicile is located, applying the provisions of the M.E.F. Order accordingly. 3384/2008 for the approval of the Procedure for the refund of the amounts representing tax on the income from the transfer of real estate from the personal patrimony, transferred to the state budget, both in the case of natural persons and in the case of legal persons.
In order to alienate, through sale, the control package of legal entities, under the conditions stipulated in article 42, paragraph (2) of the law, the individual and/or legal entity that alienates has the obligation to pay a tax at the rate of 80% applied on the positive difference between the land value existing at the time of the alienation of the control package and that at the time of the acquisition of the land, determined according to the indicative value established by the expertise drawn up by the chamber of notaries public or the minimum value established by the market study carried out by the chambers of notaries public, as the case may be , from that period.
We remember the content of article 42, paragraph (2) of Law no. 17/2014:
“(2) In the case of alienation, through sale, of the control package of legal entities that own one or more agricultural lands located outside the village and that represent more than 25% of the assets provided for in paragraph (5) point 1 and to the extent that the alienation takes place before the completion of 8 years from the acquisition of any of these lands, the natural and/or legal person who alienates has the obligation to pay a tax at the rate of 80% applied on the positive difference between the value of the existing lands at the moment of the alienation of the control package and the one from the moment of land acquisition, determined according to the indicative value established by the expertise drawn up by the chamber of notaries public or the minimum value established by the market study carried out by the chambers of notaries public, as the case may be, from the respective period. In the situation where the legal entity owns several agricultural lands located outside the city, the 80% quota is applied to the total value calculated by summing up the positive differences related to the lands acquired no more than 8 years before the alienation of the control package, without taking into account calculate the negative differences, differences determined according to this paragraph.”
Thus, the tax is applied on the total value calculated by summing up the positive differences related to the lands acquired no more than 8 years before the alienation of the control package, without taking into account the negative differences, in the situation where the legal entity owns several agricultural lands located in the suburbs.
Attention! The taxpayer has the obligation to declare the income obtained within a maximum of 10 days from the date of the transfer, to the competent central fiscal authority , based on the legal act by which the alienation, through sale, of the control package of the legal entity takes place, by completing and submitting the declaration of whose model and content are approved by order of the ANAF president.
The taxpayer has the obligation to pay the tax within 60 days from the date of notification of the tax decision.
Example of calculation of the income obtained, in the case provided for in article 42 paragraph (2) of the law:
Company X is the sole associate of company Y and decides to sell, in June 2023, 60% of the controlling stake held in company Y. At the time of the sale, company Y owns five plots of land that represent 50% of its real estate properties . The lands entered the company’s patrimony as follows:
– 1. land A – agricultural land located outside the village, with an area of 20,000 sqm, purchased in March 2018; the period of ownership of the land – 5 years (the company);
– 2. land B – agricultural land located outside the village, with an area of 10,000 sqm, purchased in November 2017; the period of ownership of the land – 6 years (the company);
– 3. land C – agricultural land located outside the village, with an area of 100,000 sqm, purchased in September 2018; the period of ownership of the land 4 years (the company);
– 4. land D – agricultural land located outside the village, with an area of 2,500 square meters, entered into management through contribution in kind in May 2017; the ownership period of the land is 9 years [6 years (company) + 3 years (associate)];
– 5. land E – land located in the inner city, with an area of 5,000 sqm, entered into management by purchase in September 2013; the land ownership period is 9 years (the company).
The sole associate falls under the provisions of article 42 paragraph (2) and (3) of the law, having the obligation to pay a tax at the rate of 80% applied to the total value calculated by summing up the positive differences related to the land acquired no more than 8 years before the alienation the control package. The difference in value is calculated, for each agricultural land located outside the city, by subtracting from the existing value at the time of the alienation of the control package from the value at the time of the acquisition of the land, determined according to the indicative value established by the expertise drawn up by the Chamber of Public Notaries or the minimum value established by the market study carried out by the chambers of public notaries, as the case may be. Only positive value differences are taken into account.
Thus, at the time of the sale of the control package (June 2023), the following situation is recorded regarding the positive/negative differences in value related to the lands of company X:
– 1. for land A, the positive difference in value of 80,000 lei, taken into account when calculating the income obtained;
– 2. for land B, the positive difference in value of 40,000 lei, taken into account when calculating the income obtained;
– 3. for land C, the negative difference in value of 50,000 lei, not taken into account when calculating the income obtained;
– 4. for land D, the positive difference in value of 4,000 lei, not taken into account, because the holding period of the land is 9 years;
– 5. for land E, the positive difference in value of 4,000 lei, not taken into account, because it belongs to an inner-city land.
Calculation of the obtained income Total value = Positive difference for land A + Positive difference for land B = 80,000 + 40,000 = 120,000 lei
The taxpayer has the obligation to declare the income obtained within a maximum of 10 days from the date of the transfer, to the competent fiscal authority .
Legal basis:
– MADR/MF joint order no. 396/2022/883/2023 for the approval of the Procedure regarding the calculation, collection and payment of the tax, as well as the declaration obligations established under the conditions of article 4^2 of Law no. 17/2014 regarding some measures to regulate the sale of agricultural land located outside the city and to amend Law no. 268/2001 regarding the privatization of the companies that manage public and private lands of the state with agricultural destination and the establishment of the State Domains Agency;
– Law 17/2014 on some measures to regulate the sale of agricultural land located outside the city and to amend Law no. 268/2001 on the privatization of companies that manage public and private state-owned land for agricultural purposes and the establishment of the State Domains Agency.