Two new tax laws have entered into force on 21 December 2020, bringing over 100 substantial and nuanced modifications, some of which target fiscalisation. Law no. 296/2020 has adopted a series of amendments and completions to the Tax Code, while Law no. 296/2020 has amended and completed the Fiscal Code.
The most important change for entreprises consists in establishing the fiscal consolidation system for corporate income tax. Relevant aspects include:
- A tax group may consist only of Romanian legal entities and/or persons with their registered office in Romania, established in accordance with European legislation, and may include, in certain cases, the Romanian permanent establishment of a non-resident;
- The required condition is to hold at least 75% of the value/number of participation titles or voting rights for an uninterrupted period of at least one year prior to the beginning of the consolidation.
VAT changes
The VAT tax base can be adjusted for invoices older than one year and not collected from individuals. This amendment, which shall help sectors such as telecommunications or utilities, provides that, in the case in which the countervalue of the delivered goods or supplied services has not been received by the recipients (natural persons) within 12 months from the payment deadline established by the parties or, in its absence, from the invoice date, the VAT taxable amount can be adjusted.
- For micro-entreprises, the annual turnover ceiling for taxation of 1% (for entreprises with employees) or 3% (for entreprises without employees) is RON 4,869,400.
- The turnover threshold for the application of VAT on collection system has been increased from RON 2,250,000 to RON 4,500,000. This measure will give a greater number of entreprises the possibility to collect VAT upon receipt of the payment and to deduct VAT for acquisitions only upon payment to the provider.
- The ceiling for nontaxable units who wish to become taxable is an annual turnover of 88.500 euros.
Increase of the minimum salary
The minimum salary has been increased, as from 13 January 2021, from RON 2,230 to RON 2,300, which amounts to almost 500 EUR, by the Government’s Decision no. 4/2021, published in the Official Gazette of Romania on 13 January 2021.
According to the Government’s Decision, there are two minimum salary levels (for those with a secondary education qualification) in January 2021.
- A gross salary of RON 2,230, until the date of entry into force (more exactly, from 1 January to 12 January)
- A gross salary of RON 2,300 following the entry into force of the aforementioned decision, from 13 January and 31 December 2021.
In recent years, Romania enjoyed some of the highest growth rates in the EU, a status which exceeded financial forecasts and drew plenty of global investment attention. At the present moment, there are numerous fiscal facilities which possess a multitude of advantages for the foreign citizens wishing to set up their own company in Romania. Right now, there are over 200.000 Romanian entreprises having shareholders with foreign nationalities, owing to the state’s fiscal policies and access to EU grants.
Sources: Startarium.ro, economica.net