FiNNEWS Legislative, no.6, 2017
- Thursday, 8 June 2017
- Notification concerning tax year modification
- Capitalisation of perishable goods
- Electronic communication concerning garnishment between banks
- Modification of forms 091 and 098
- Modification of form 010
- Material modifications of Fiscal Code implementation norms
- Modifications to the Convention for the avoidance of double taxation entered into by Romania and the People's Republic of China
Notification concerning tax year modification
According to art. 16 par. (5) of the Fiscal Code (Law 227/2015), by way of exception from the general applicable rule, income tax payers who opted, according to the accounting legislation in force, for a financial year other than the calendar year, may opt for the fiscal year to correspond with the financial year.
In view of performing the change, form 014 shall be used – Notification concerning tax year modification.
The form shall be submitted as follows:
a) Within 15 days from the beginning of the modified tax year or from the date of tax payer's registration, as applicable;
b) Within 15 days from the beginning of the new modified tax year concerning the change of the modified tax year period;
c) Prior to the 25th day of the third month inclusively, from the date the modified tax year had finalized, for the situation in which the modified tax year turns into calendar tax year once more.
By means of OPANAF no. 1546/May 17th 2017 the model and content of form 014 is approved.
Capitalisation of perishable goods
According to provisions of art.247, par.(4) of the tax procedure Code, if perishable goods or goods subject to degradation have been seized, such can be sold urgently. Evaluation and capitalisation of such goods is performed by the tax bodies, at market price.
Moreover, according to provisions of art.247 par.(5) letter a) of the tax procedure Code, the evaluation and capitalisation procedure shall be approved by order of the A.N.A.F. president, for receivables managed by the central fiscal body, due to which the said order's promotion was imposed.
By means of the order, the activities which must be conducted by the competent fiscal bodies regarding urgency sale of seized perishable goods or goods subject to degrading, were structured as follows:
- Establishment of the capitalisation Committee;
- Evaluation of the perishable goods or goods subject to degrading;
- Capitalisation of perishable goods or goods subject to degrading;
- Attributions of the capitalisation Committee.
A series of forms were elaborated, in view of uniform implementation of the procedure:
- Announcement regarding capitalisation of perishable goods or goods subject to degrading;
- Official report regarding the performance and the outcome of the procedure for capitalisation of perishable goods or goods subject to degrading;
- Official report regarding capitalisation of perishable goods or goods subject to degrading;
- Official report of handover-takeover of the capitalised perishable goods or goods subject to degrading.
The order enters into force at the date when the former order concerning the capitalisation procedure of perishable goods is abrogated (OMFP 2389/2010).
Electronic communication concerning garnishment between banks
By means of the private space on the ANAF website, ANAF provides the banks with an information system by means of which users upload and download documents.
Communicating the garnishments to the banks shall be performed by means of long distance electronic means of transmission.
Means of identifying the banks within the electronic environment and the access procedure are regulated by the order of the ANAF president on the approval of the procedure concerning provision of information according to art. 61 of the fiscal procedure Code.
Conditions for implementation of the garnishment communication automated system shall be established by concluding a Collaboration Protocol between ANAF, banks and the Romanian Banking Association.
Oder 691/2017 enters into force within 30 days from notification.
Modification of forms 091 and 098
Starting January 1st 2017 a special VAT regime for farmers was included in the Tax Code. Thus, according to art.3151 par.(12) letter a) of the Fiscal Code, in case the farmer who applies the special regime performs intra-community deliveries of agricultural products, intra-community service provision, intra-community acquisitions of goods, intra-community service acquisitions, he is bound to register for VAT purposes according to art.317 of the fiscal Code.
Furthermore, according to terms of art. 317 par.(9) of the Fiscal Code, taxable persons registered for VAT purposes, according to this article they may request cancellation of registration for VAT purposes.
Taking into account the above mentioned information, it is compulsory to complete form (091) „Statement for registration for VAT purposes /Amended Declaration of other persons performing intra-community acquisitions or for services, as well as for farmers performing intra-community deliveries of goods (091)”, form used for registration /cancellation of registration for VAT purposes, according to art.317 of the Tax Code, with headings designated for persons applying the farmers' special regime and who perform intra-community deliveries of agricultural goods.
Moreover, the General Directorate for tax information requested implementing within the form 098 „Application for added value tax registration purposes, according to art.316 par.(1) letter a) of the Fiscal Code”, the information regarding organization and management of taxpayers' accounting based on accounting service provisions contracts, pursuant to art.10 par.(3) of Law no. 82/1991, republished, with subsequent amendments and additions.
The request of the aforementioned directorate is motivated by the fact that the National Agency for Tax Administration does not provide information regarding the existence of contracts for provision of accounting services.
By means of OPANAF no. 1381/2017 the model and content of a form for registration/cancellation of registration for value added tax purposes is approved.
Modification of form 010
The General Directorate for fiscal information requested the supplementation of form 010 „Fiscal registration Statement/Amended Declaration/Deregistration Statement for legal entities, joint ventures and other entities without legal personality”, with the information regarding organisation and administration of taxpayers' accounting based on contracts for provision of accounting services, according to art. 10 par. (3) of Law no. 82/1991, republished, with subsequent amendments and additions.
Directive's request is grounded on the fact that ANAF does not provide information regarding the existence of contracts for provision of accounting services, lack of such information leading to an obstruction of the VAT registration procedure.
By means of OPANAF no. 1382/2017 , form 010 was thus supplemented by including within the section "Other data on the taxpayer" a heading regarding the organisation and management of taxpayers' accounting, based on accounting services provision contracts. Moreover, form 010 was extended by an annex, comprising the identification data of the person providing for the organisation and management of accounting.
Material modifications of Fiscal code implementation norms
Below are the main modifications of the Fiscal Code implementation norms :
Title I - General provisions
Art. 11 of the Fiscal Code, as amended by the Government Emergency Ordinance no. 84/2016 which entered into force on January 1st 2017, was supplemented by new provisions which allow taxable persons which register for VAT purposes subsequent to registration code cancellation according to provisions of art. 316 par. (11) letter a) - e) and h) of the Fiscal Code, to deduct the tax corresponding to acquisitions made during the period of code cancellation, as well as to issue invoices for the deliveries of goods and provisions of services performed during said period, so that the beneficiaries may exercise in their turn the right to VAT deduction for purchases made from these persons during the period they did not have a VAT code. Procedural orders are included in the Methodological Norms for implementation of the Fiscal Code according to the manner in which the taxable persons who had a cancelled VAT code acted during said period, along with examples for a uniform implementation of the new provisions.
Title II - Income tax
It is clarified the fact that the tax exemption pertaining to the profit invested in acquiring the right to use the information programs, is applicable for those purchased and used starting with January 1st 2017, according to the provisions of the Fiscal Code.
A calculation example was added, which concerns the modality of distributing the management expenditure as pertaining to the non-taxable income, according to the provisions of the Fiscal Code.
Loans obtained directly or indirectly from international development banks, Romanian or foreign credit institutions, non-banking financial institutions, are not taken into account when calculating the borrowed capital, in order to determine the degree of indebtedness.
It is specifically mentioned that non-deductible interests that can be carried forward, may be carried forward in view of settlement for an unlimited period of time.
Clarifications were added regarding recovery of tax loss by the taxpayers who starting February 1st 2017 apply the micro companies' income tax system.
Title III - Micro companies' income tax
Clarifications regarding lack of implementing provisions of Law no. 170/2016 on specific activity tax, by micro companies which pay micro companies' income tax for 2016, as well as by income tax payers-Romanian legal entities which on January 1st 2017 meet the terms stipulated by art. 47 of the Tax Code, and which perform specific activities (hotels, restaurants, terraces, bars) as main or secondary activity. Starting January 1st 2017, such Romanian legal entities apply the provisions of Title III „Micro companies' income tax” of the Fiscal Code.
As a consequence of modification of one of the classification conditions for the micro companies' category, respectively the one regarding the limit of income obtained during the preceding year, by means of increase from 100.000 euro to 500.000 euro, specifications are added concerning the implementation of the micro companies' income tax system for Romanian legal entities which are income tax payers and which on December 31st 2016 obtained income comprised between 100.001 – 500.000 euro, in lei equivalent.
Furthermore, clarifications are added related to maintaining subsequent to February 1st 2017 the income tax payer status of the micro companies which, according to provisions of art. 48 par.(5) or par.(52 ), of the Fiscal Code, opted to apply provisions of title II of the Fiscal Code until and including January 31st 2017, given that, according to such legal provisions, the option expressed is final, as long as the amount imposed by law for registered capital is maintained for the year.
Rules regarding maintaining/modifying the tax rate in cases when the number of employees varies, were correlated.
As a consequence of amendment of provisions regarding the limit of income obtained during the preceding year, respectively by means of increase from 100.000 euro to 500.000 euro, in lei equivalent, provisions are added
concerning assessment of conditions for classification to the income level of 500.000 euro, in lei equivalent, during the year, of Romanian legal entities which apply the micro companies' income tax system starting February 1st 2017.
Title IV - Income tax
Clarifications are made concerning:
Applicability of income tax exemption for natural persons performing seasonal activities. Seasonality is defined by:
- repetitive annual period;
- activities performed for fixed durations according to period/season
- activities classified within the NACE codes: 5510, 5520, 5530, 5590, 5610, 5621, 5629 and 5630.
Determining the salary tax by adding the possibility of deducting medical care supplied as subscription borne by the employees within the limit of 400 EUR / year.
Method of calculating the tax due upon transmission of ownership on real estate by aligning the rules and calculation formulas with the non-taxable ceiling of 450.000 lei.
The time limit for declaring foreign salary income obtained by the persons who performed the activity in Romania within a period smaller than the one stipulated by the conventions for the avoidance of double taxation and who extended their stay in Romania. Thus, time limit for declaring within 15 days from the expiry of the period stipulated by the convention is replaced by the date of 25th of the month following the one of the time limit anniversary stipulated by the convention.
Title V - National insurance contributions
Correlation of provisions regarding the monthly base of national insurance contributions and of health insurance contributions, for persons obtaining salary income and similar income, in connection with elimination of provisions regarding the maximum ceiling representing the value of 5 times the gross average salary income.
Clarification of the grading manner of the annual health insurance contribution base within the minimum ceiling representing the value of twelve national gross minimum basic salaries, given that salary income or similar income, investment income and/or income from other sources are taken into account.
Provisions clarifying the health insurance contribution base for dividend income are added.
Title VI – Non-residents' income tax
The methodological norms containing provisions regarding the informative statement on withheld income for income with withholding regime/exempt income, according to income beneficiaries, submitted by income payers, is abrogated, since this form was approved by Order no. 3695/2016 of the president of the National Agency for Fiscal Administration.
Title VII – VAT
Following registration for VAT purposes subsequent to January 1st 2017, taxable persons can issue invoices for deliveries of goods and services rendered during the period when their VAT code was cancelled.
Clarifications are added in regards to the circumstance in which the share pertaining to one of the spouses for the assets held in common indivisible ownership cannot be established, in which case only one shall meet the VAT obligations at the moment of asset sale.
The term immovable asset is defined in terms of VAT.
In case of contract termination, the tax base can be adjusted, irrespective if the parties jointly or unilaterally terminate the contract.
In case of beneficiary's reorganisation or bankruptcy, recovery of VAT is allowed within 5 years starting January 1st of the year following the one when the decision confirming the organisation plan was pronounced, respectively the court decision for bankruptcy completion.
The equivalent value of works /assessments of movables is excluded from the customs VAT tax base, regardless if such were performed outside EU or within the EU.
VAT reimbursement is allowed for taxable persons non-residents of EU and which apply the special regime for electronic, telecommunication, radio/TV or TV services and which provided electronic, telecommunication, radio fusion or TV services on Romanian territory.
In view of reimbursing VAT, taxable persons non-residents of EU and which apply the special regime for electronic, telecommunication, radio/TV or TV services no longer need to appoint a tax representative in view of reimbursement.
New provisions regarding the manner of VAT annual adjustment for certain operations performed by capital assets are added.
New procedural decisions regarding the implementation of the farmers' special regime are added.
Modifications to the Convention for the avoidance of double taxation entered into by Romania and the People's Republic of China
On 12.05.2017, the Law regarding ratification of the Agreement between Romania and the People's Republic of China for the exclusion of the double taxation concerning income tax, prevention of tax evasion and circumventing tax payment, was published in the Official Gazette.
The agreement serves the avoidance of double taxation and prevention of tax evasion regarding income tax, and applies to persons who are residents of one or both states.
The agreement shall enter into force on the thirtieth day from the date of the last notification transmitted between the two states and shall produce effects for the income obtained during the fiscal years which start on or after the first day of January of the calendar year immediately subsequent to the year when the agreement entered into force.
The main amendments of this law aim:
The tax applicable to payments of dividends, interests and royalties drops to 3%;
New provisions regarding definition of the “resident” notion;
New clarifications regarding the notion of “permanent headquarters”, within the meaning of defining the notion of “person which is closely linked to a company”;
Clarifications regarding the notions: “mainly owned” and “mainly financed”;
New provisions regarding capital gains obtained, in the sense of taxation within the source state of income from alienation of shares or certain similar rights held within a company, whose value originates, directly or indirectly, in proportion of over 50% from real estate properties.