S.C. X S.R.L., whose object of activity is “Growing of cereals (excluding rice), leguminous plants and oil seed plants”, CAEN code 111.
Period checked:
– 01.01.2017-31.12.2022 corporate tax;
-01.01.2017-31.12.2022 tax on income from dividends distributed to persons individuals.
The main observations of the tax inspection authorities were:
Company X S.R.L. is a company with legal personality established under Law no.36/1991 on agricultural companies and other forms of association in agriculture.
In addition to the land brought into photosynthesis by the associated members, during the period subject to tax inspection (2017-2022), the agricultural company worked land brought into lease, based on contracts concluded with the land owners, lease expenses being recorded in expense account 612 “Expenses on royalties, rents and leases”.
During the period audited the agricultural company recorded the entitlements due to members in cash or in kind in account 658.8 ‘Other operating expenses’ corresponding to account 462 ‘Sundry creditors’.
During the tax inspection, it was established that this accounting entry was erroneous, since the delivery in cash or in kind of agricultural products to the associates represents the part of the company’s profit distributed to the associates and not operating expenses, by this entry the taxable profit was unjustifiably reduced by the amount of x lei.
Thus, according to the legal provisions, following the tax inspection, the corporate income tax was recalculated and an additional corporate income tax of x lei was calculated.
Following the verification carried out, the inspection authorities treated the income in cash and in kind distributed by the agricultural company to its members, from a tax point of view, as income from dividends, in accordance with Article 97, paragraph 7 of Law no.227/2015 on the Tax Code with subsequent amendments and additions, calculating additional tax on income from dividends related to these rights in the amount of x lei, in accordance with Article 7, paragraph 11, Article 11 of Law no.227/2015 on the Tax Code with subsequent amendments and additions.
Thus, additional tax liabilities were established in the total amount of x lei representing:
– x lei income tax;
– x lei tax on income from dividends distributed to individuals.
Source: ANAF