- The purchase costs of the electronic fiscal cash registers are no longer deducted from the corporate income tax according to the old procedure, but they can be subject to tax relief representing the tax exemption on reinvested profits.
- The following categories are considered limited deductible expenses of a social nature:
- the expenses for the proper functioning of some units under the administration of taxpayers, such as: nurseries, kindergartens, schools, museums, libraries, canteens, sports facilities, clubs, hostels for non-family members and the like;
- the amounts paid by the taxpayer for the placement of children of employees in early education units, according to the legal regulations in the field of national education, but not more than 1,500 lei/month for each child.
- The provision for deducting early education expenditure from corporate income tax under the old procedure is removed.
- There are changes/completions regarding the limited deductibility of certain expenses:
a) expenses for the operation, maintenance and repair of service housing, deductible up to the corresponding limit of the built-up areas provided for by the Housing Law no. 114/1996, republished, with subsequent amendments and additions;
b) 50% of the value of the operating, maintenance and repair expenses related to an office located in a dwelling personally owned by an individual, also used for personal purposes, corresponding to the areas made available to the taxpayer under contracts concluded between the parties for this purpose;
c) 50% of the value of the operating, maintenance and repair costs related to a registered office acquired by the taxpayer in residential buildings or in individual residential buildings, in residential complexes defined according to legal provisions, which is not used exclusively for the purpose of economic activity. If the registered office, located in the taxpayer’s assets, is used for personal purposes by the shareholders or associates, these expenses are considered to be incurred in their favour and are not deductible when calculating the tax result (new provision).
- Expenses for private scholarships are no longer deductible from corporate income tax. In order to determine the tax result, taxpayers who incur expenses related to private scholarships, add these expenses within the limit of 1,500 lei/each scholarship granted, with those of a social nature (provided for in art. 25 paragraph 3 letter b CF), and the resulting amount is deducted within the limit of 5% of salary expenses.
- Expenses related to goods, financial means and services granted to the United Nations Children’s Fund – UNICEF, as well as to other international organizations operating according to the provisions of special agreements to which Romania is a party, are added to the sponsorship expenses and reduce the income tax by the lesser of 0.75% of the turnover, without exceeding 20% of the income tax. Both expenses are initially non-deductible when calculating the corporate income tax.
- Annual tax losses established by the corporate income tax return, starting in 2024/amended tax year beginning in 2024, as the case may be, are recovered from the taxable profits made, up to and including 70%, in the following 5 consecutive years. The recovery of losses will be made in the order of their recording at each income tax payment date.
- The taxpayer has the right to deduct, in a tax period, the excess costs of the debt up to the deductible limit represented by the equivalent in RON of the amount of 1.000.000 euro. Excess debt costs resulting from transactions/operations which do not finance the acquisition/production of fixed assets in progress/assets and which are carried out with related persons are deductible, in a tax period, up to the deductible limit represented by the equivalent in lei of the amount of 500,000 euro.
The total excess costs of indebtedness resulting from transactions/operations carried out both with the respective affiliated persons and with non-affiliated persons, which may be deducted in a tax period, may not exceed the deductible limit represented by the equivalent in lei of the sum of 1,000,000 euro. The exchange rate used to determine the RON equivalent of the respective limit s is the exchange rate communicated by the National Bank of Romania for the last day of the fiscal quarter/year. The limit of 500,000 euro for the excess costs of indebtedness incurred with affiliated persons does not apply to credit institutions – Romanian legal entities, branches in Romania of credit institutions – foreign legal entities, non-banking financial institutions, branches in Romania of non-banking financial institutions and investment companies defined by law.
- In the case of corporate income tax payers, the possibility of redirecting the amount representing sponsorship or patronage expenses, within the established limits, is maintained by submitting the redirection form. In the case of taxpayers who are members of a tax group, the redirection can only be ordered by the responsible legal person.
- Adjustments for the depreciation of receivables, recorded in accordance with the applicable accounting regulations, representing amounts due from internal and external customers for products, semi-finished products, materials, goods sold, work performed and The purchase costs of the electronic fiscal cash registers are no longer deducted from the corporate income tax according to the old procedure, but they can be subject to tax relief representing the tax exemption on reinvested profits.
- The following categories are considered limited deductible expenses of a social nature:
- the expenses for the proper functioning of some units under the administration of taxpayers, such as: nurseries, kindergartens, schools, museums, libraries, canteens, sports facilities, clubs, hostels for non-family members and the like;
- the amounts paid by the taxpayer for the placement of children of employees in early education units, according to the legal regulations in the field of national education, but not more than 1,500 lei/month for each child.
- The provision for deducting early education expenditure from corporate income tax under the old procedure is removed.
- There are changes/completions regarding the limited deductibility of certain expenses:
a) expenses for the operation, maintenance and repair of service housing, deductible up to the corresponding limit of the built-up areas provided for by the Housing Law no. 114/1996, republished, with subsequent amendments and additions;
b) 50% of the value of the operating, maintenance and repair expenses related to an office located in a dwelling personally owned by an individual, also used for personal purposes, corresponding to the areas made available to the taxpayer under contracts concluded between the parties for this purpose;
c) 50% of the value of the operating, maintenance and repair costs related to a registered office acquired by the taxpayer in residential buildings or in individual residential buildings, in residential complexes defined according to legal provisions, which is not used exclusively for the purpose of economic activity. If the registered office, located in the taxpayer’s assets, is used for personal purposes by the shareholders or associates, these expenses are considered to be incurred in their favour and are not deductible when calculating the tax result (new provision).
- Expenses for private scholarships are no longer deductible from corporate income tax. In order to determine the tax result, taxpayers who incur expenses related to private scholarships, add these expenses within the limit of 1,500 lei/each scholarship granted, with those of a social nature (provided for in art. 25 paragraph 3 letter b CF), and the resulting amount is deducted within the limit of 5% of salary expenses.
- Expenses related to goods, financial means and services granted to the United Nations Children’s Fund – UNICEF, as well as to other international organizations operating according to the provisions of special agreements to which Romania is a party, are added to the sponsorship expenses and reduce the income tax by the lesser of 0.75% of the turnover, without exceeding 20% of the income tax. Both expenses are initially non-deductible when calculating the corporate income tax.
- Annual tax losses established by the corporate income tax return, starting in 2024/amended tax year beginning in 2024, as the case may be, are recovered from the taxable profits made, up to and including 70%, in the following 5 consecutive years. The recovery of losses will be made in the order of their recording at each income tax payment date.
- The taxpayer has the right to deduct, in a tax period, the excess costs of the debt up to the deductible limit represented by the equivalent in RON of the amount of 1.000.000 euro. Excess debt costs resulting from transactions/operations which do not finance the acquisition/production of fixed assets in progress/assets and which are carried out with related persons are deductible, in a tax period, up to the deductible limit represented by the equivalent in lei of the amount of 500,000 euro.
The total excess costs of indebtedness resulting from transactions/operations carried out both with the respective affiliated persons and with non-affiliated persons, which may be deducted in a tax period, may not exceed the deductible limit represented by the equivalent in lei of the sum of 1,000,000 euro. The exchange rate used to determine the RON equivalent of the respective limit s is the exchange rate communicated by the National Bank of Romania for the last day of the fiscal quarter/year. The limit of 500,000 euro for the excess costs of indebtedness incurred with affiliated persons does not apply to credit institutions – Romanian legal entities, branches in Romania of credit institutions – foreign legal entities, non-banking financial institutions, branches in Romania of non-banking financial institutions and investment companies defined by law.
- In the case of corporate income tax payers, the possibility of redirecting the amount representing sponsorship or patronage expenses, within the established limits, is maintained by submitting the redirection form. In the case of taxpayers who are members of a tax group, the redirection can only be ordered by the responsible legal person.
- Adjustments for the depreciation of receivables, recorded in accordance with the applicable accounting regulations, representing amounts due from internal and external customers for products, semi-finished products, materials, goods sold, work performed and services rendered, are deducted up to a limit of 30% of the value of these adjustments, if the receivables cumulatively meet the conditions provided for by the Tax Code (the limit for deducting adjustments for the depreciation of receivables is reduced from 50% to 30%).
- Clarifications are made to the tax provisions governing the deduction of provisions by non-banking financial institutions, which are required to apply accounting regulations in accordance with International Financial Reporting Standards from 1 January 2023.
- Clarifications are provided on the tax regime of impairment adjustments and specific provisions, set up by non-banking financial institutions and branches in Romania of non-banking financial institutions – foreign legal entities registered in the General Register, by payment institutions – Romanian legal entities granting loans related to payment services, by institutions issuing electronic money, by Romanian legal entities granting loans related to payment services, but also by credit institutions.
Effective date for the above provisions: 1 January 2024.