News about tax on profit
Professional assesment – an useful tool for both employee and the employer
April 24, 2017
Tax News
May 5, 2017
We have become accustomed to the many legislative amendments that, unfortunately, define the Romanian economic environment and make it characterized as “unstable” or “immature”. Moreover, most of the legislative changes directly or indirectly affect the fiscal field, affecting both Romanian and foreign entrepreneurs, who are wondering more often whether the “production” of normative acts is an end in itself. However, on Thursday, April 27, 2017, the Government adopted a resolution that aims to clarify more tax issues and “bring light” into their application. Issues covered include corporate income tax, income tax, micro-enterprise income tax, statutory social contributions and VAT.
Although the Government’s decision has not yet entered into force (probably in the first 7 days of May), we will present our essential ideas. In the following we will only refer to corporate income tax, and in the coming days we will address the other issues.
With regard to tax on profit:
It clarifies the application of the tax exemption for reinvested profits in the context of the application of this measure for an indefinite period and the application of the facility and licenses for the use of software programs has been extended.
The Government Decision includes examples of allocating non-taxable non-deductible expenses, calculating the share of non-taxable income in total revenue, and determining management and administration expenses for non-taxable income.
Also, according to the normative act, the specific tax applies only to hotel and catering companies that pay corporation tax in so far as they have not passed the “micro” tax regime. The specific tax is applied only by firms which on January 1, 2017 would have had to apply the corporate income tax (and whose activities fell in 2016 in the CAEN codes 5510, 5520, 5530, 5590, 5610, 5621, 5629 and 5630), while in 2016 they had businesses of over 100,000 euros. In other words, businesses with over 100,000 euros in 2016 in the hospitality and catering sector apply the specific tax on January 1, 2017.
