The Official Gazette no. 720/22.11.2013 published the Decision of the Central Tax Commission no. 4/2013 which regulates the interpretation of the provisions in force in terms of VAT related to subsidies between 1 January 2007 and 31 December 2009; it was approved by the Order of the Minister of Public Finance no. 1877/2013.

The Decision of the Commission targets a unitary application of the laws in force in the period from 1 January 2007 to 31 December 2009 on the inclusion of the subsidies in the VAT taxation basis. Thus, in order to be considered directly connected with the price of the supplied/provided goods/services the subsidies shall meet the following two conditions:

• The amount of the subsidy shall depend on the volume of the goods delivered/services rendered;
• The amount of the subsidy shall be determined prior to conducting the business; the trading company does not fall under any other case of cancellation of the registration for VAT purposes.

The Official Gazette no. 728/26.11.2013 published: the Order of the President of the National Agency for Fiscal Administration no. 3581/2013 on the organization of the business of management of large taxpayers and the Order of the President of the National Agency for Fiscal Administration no. 3582/2013 on the organization of the business of management of medium taxpayers.

The legislative acts mention in particular the following:

• Starting from 1 January 2014, the top 2,500 Romanian legal entities are large taxpayers, including the entities resulting from the merger with other taxpayers and the branches of taxpayers – foreign legal entities operating in Romania, selected in a descending order according to the selection criteria set out by this Order;

• Criteria for the selection of large taxpayers:

1. The aggregated value criterion:

• The volume of the owed tax obligations declared by the taxpayers – 50%;
• The turnover reported in the financial statements concluded on 31 December of the year preceding the one when the update is performed - 50%.

2. The specific business criterion;
3. The investment criterion:

• By derogation, newly established taxpayers who, by the date of the foundation, commit by way of an affidavit to make investments the RON value of which is the equivalent of a minimum of EUR 10 million, are registered as large taxpayers and;
• To that effect, they shall submit the affidavit at the tax authority in the jurisdiction of which their declared tax domicile is located within 5 days after the date of their registration with the Trade Register.

• Starting from 1 January 2014, the county public finance administrations and the Regional Directorate-General of Public Finances of Bucharest, by way of the Tax Administration for medium sized taxpayers manages medium sized taxpayers whose tax domicile is in the territorial jurisdiction of the counties or the city of Bucharest, except public institutions, including the entities resulting from the division or merger with other taxpayers and the branches of corporate taxpayers who operate in Romania and meet the selection criteria.

• Medium taxpayer selection criteria:

1. The aggregated value criterion;
2. The insolvency criterion.

• The selection criteria may be updated on an annual basis by way of the Order of the President of NAFA;

• The lists of large and medium sized taxpayers are updated annually and are published on the website of NAFA: http://www.anaf.ro/anaf/internet/ANAF/informatii_publice/lista_contrib_mari_mijlocii (the Order of the President of NAFA no. 3749/10.12.2013);

Warning! The category of large and medium sized taxpayers also includes non-resident taxpayers for whom the medium sized taxpayers act as representatives or tax representatives.

The Official Gazette no. 731 of 27/11/2013 published the Joint Order of the Ministry of Public Finance, the Ministry of European Funds and the Ministry of Labour, Family, Social Protection and the Elderly no. 1.906/1.228/2.474/2013 regulating the interpretation of the Decision of the European Union Court (Sixth Chamber) in case T-89/10 on the recoverability of the eligible VAT within the Sectoral Operational Programme for Human Resources Development, published in the Official Gazette no. 731 of 27.11.2013.

According to the legislative act, the eligible VAT that is non-deductible under national tax laws is deemed non-recoverable and will be requested for reimbursement from the European Social Fund given its non-recoverability.

The Official Gazette no. 753 of 04/12/2013 published Order no. 3713/2013 approving the template and content of form (089) “Affidavit for fulfilling the requirement specified by art. 160, paragraph (2), letter e), section 2, of the Tax Code".

• The legislative act regulates the template and content of form code 089 “Affidavit for fulfilling the requirement specified by art. 160, paragraph (2), letter e), section 2, of the Tax Code”;

• The affidavit shall be filled out by taxable persons registered for VAT purposes who own a valid license for the supply of electricity, as issued by ANRE (National Energy Regulatory Authority), and whose main business in terms of purchasing electricity, is the resale of electricity, their own consumption of the purchased electricity being negligible, i.e. not more than 1% of the electricity purchased from January to November of the calendar year;

• The affidavit shall be submitted to the competent tax authority annually by the 10^th of December of each year and applies to all electricity purchases made ​​during the following year.

The Official Gazette no. 727 of 26 November 2013 published the Order of the Ministry of Public Finance no. 1898/2013 amending and supplementing the Accounting Regulations in line with European directives, as approved by the Order of the Minister of Public Finance no. 3.055/2009.

Below we present the main amendments stipulated by the legislative act:

• Additions are inserted in terms of the preparation of the annual financial statements and accounting reports by the permanent establishments of Romania, so, in case a legal person established abroad carries out its business in Romania via several permanent establishments, the annual financial statements and accounting reports required by the accounting law shall be prepared by the permanent establishment designated to meet the tax obligations, and they shall reflect the business of all the permanent establishments;

• The provisions on the recognition in the profit or loss account of the income and expenditure are supplemented;

• Amendments are inserted in terms of the cost of purchasing short-term securities ​​that are not admitted to trading on a regulated market, as well as long-term securities;

• Amendments and additions are inserted in connection with the classification and definition of tangible assets, and the accounting treatment of subsequent expenditures after the purchase of an asset and the maintenance and repair costs and the costs of its daily maintenance;

• Amendments are inserted in terms of the accounting treatment of the depreciation of tangible assets used under a lease, tenancy, management or other similar agreement;

• The accounting provisions on the revaluation of tangible assets are amended and supplemented;

• The provisions on the accounting treatment of debt assignment agreements are amended as follows:

• The debts taken over by assignment are recorded in the books under the purchase cost – 461 “Sundry debtors” = 462 “Sundry creditors”;
• The nominal value of the debts thus assigned is recorded off balance – account 809 “Debts taken over by assignment”;
• If the assignee recovers from the debtor that has been taken over an amount that is greater than the purchase cost of the debt against the latter, the balance between the collected amount and the purchase cost shall be recorded under income (account 758 “Other operating revenue”/analytically distinct) upon collection;
• If the assignee assigns the debt against the debtor that has been taken over, at the time of the assignment, the former shall recognize in the books:

a) An expense (account 654 “Bad debts written off”) if the debt purchase cost is greater than the price of its assignment, or

b) Income (account 758 “Other operating revenue”/analytically distinct) if the price of the assignment of the transferred debt is greater than its acquisition cost.

• Additions are inserted in terms of the recognition in the books of the income tax and others taxes for which the tax laws require making advance payments;

• New provisions are added in terms of the accounting treatment of subsidies;

• The provisions on the recognition of revenues from home sales and customer loyalty programmes are amended and supplemented;

• New regulations are added on the transfer to the buyer of the major risks and benefits related to the ownership in the case of income from the sale of goods;

• New regulations are added on the presentation of information on the debt assignment operations in the explanatory notes to the annual financial statements.

Note: The provisions above shall apply starting from 1 January 2014.

The Official Gazette no. 748 of 03.12.2013 published the Order no. 1920/2013 on the procedure of updating the guarantees according to art. 206^54, paragraph (4^2) of Law no. 571/2003 on the Tax Code.

The Order amends the procedure of updating the guarantees which authorized warehouse keepers are required to establish, according to the detailed regulations for enforcing art. 206^54, paragraph (4^2).

The Official Gazette no. 765 of 12.09.2013 published the Order of the President of the National Agency for Fiscal Administration no. 3751/2013 on the power of conducting activities of risk analysis and of selection of individuals to be the subject of a prior documentary tax verification.

According to the legislative act the Directorate of Tax Verification is the competent structure within NAFA in charge of performing risk analyses and of selecting the individuals to be subjected to a prior documentary tax verification throughout the country, as these activities are regulated by the Government Decision no. 248/2011 approving the Procedure for enforcing the indirect methods of determining the adjusted taxation basis, as subsequently amended and supplemented.

The Official Gazette no. 769 of 10 December 2013 published Law no. 329/2013 on the ratification of the Agreement between Romania and the Republic of India for avoiding double taxation and preventing tax evasion with respect to income taxes, as signed in New Delhi on 8 March 2013.

The legislative act ratifies the Agreement between Romania and the Republic of India for avoiding double taxation and preventing tax evasion with respect to income taxes, as signed in New Delhi on 8 March 2013. The agreement thus replaces the Double Taxation Convention concluded between Romania and the Republic of India and signed on 10 March 1987. As a piece of news, please note that the new Agreement adds a new article on the anti-abuse clause concerning the Limitation of Benefits – LOB.

The Official Gazette no. 799 of 18.12.2013 published the Order no. 3763/2013 amending the Order of the President of the National Agency for Fiscal Administration no. 892/2012 approving the template and content of forms 208 “Information statement on the tax on income from the transfer of real estate from the personal property” and 209 “Statement on the income from the transfer of real estate from the personal property”.

The Order amends the format and content of forms 208 “Information statement on the tax on income from the transfer of real estate from the personal property” and 209 “Statement on the income from the transfer of real estate from the personal property”.

The forms are used to declare information on the transfers of real estate from the personal property made ​​starting from the first half of 2014.

The Official Gazette no. 809 of 19/12/2013 published the Emergency Ordinance no. 111/2013 for the regulation of certain tax measures and the amendment of certain legislative acts.

The legislative act brings a number of changes in terms of the tax and related laws, as follows:

• THE APPLICATION OF THE VAT UPON COLLECTION SYSTEM BECOMES OPTIONAL AS OF 01 JANUARY 2014. To that effect, several transitional provisions have been issued for the taxpayers who on 1 January 2014 apply the VAT upon collection system, including the following:

• They may continue applying the VAT upon collection system without filing any notice if they are eligible for applying this system, in which case they are considered to have opted for continuing the implementation of the system;

• At any time during 2014, they may apply for deregistration from the Register of taxable persons applying the VAT upon collection system by filing a notice to the competent tax authorities even if they are eligible for applying the system as 2014 is not considered the first year in which they have opted for implementing the VAT upon collection system;

• They are required to submit a notice to the competent tax authorities by 25 January 2014 if they exceed the ceiling of RON 2,250,000 in the last tax period of 2013, in view of their deregistration  from the Register of persons applying the VAT upon collection system.

• The rule on the chargeability of the tax associated with the equivalent value still uncollected by the 90^th calendar day after the invoice issue date has been eliminated for the taxpayers enforcing the VAT upon collection system;

• The term of increase of the excise duties for Diesel oil, leaded and unleaded gas and kerosene is postponed from 1 January 2014 to 1 April 2014;

• This legislative act repeals Law no. 148/2012 on the registration of commercial operations electronically and establishes the legal requirements for electronic documents containing data on the economic operations of exchange or sale of goods or services between persons issuing and receiving invoices, tax receipts or electronic receipts.

The Official Gazette no. 833 of 24/12/2013 published the Order of the President of the National Agency for Fiscal Administration no. 3806/2013 amending annexes 1 to 3 to the Order of the President of the National Agency for Fiscal Administration no. 3.596/2011 on the declaration of deliveries/supplies and acquisitions made ​​on the national territory by persons registered for VAT purposes and approving the template and content of the information statement on the deliveries/supplies and acquisitions made on the national territory by persons registered for VAT purposes.

The Order amends the format and content of form 394 “Information statement on the deliveries/supplies and acquisitions made on the national territory”.

The provisions of this Order shall apply starting with the invoices issued/received during the last tax reporting period of 2013 for which each operator registered for VAT purposes has an obligation of reporting.