by Florin Gherghel, Tax Manager Ensight Finance
The Romanian Fiscal Code was significantly modified in end of 2023 and you may find below the main amendments.
The changes are applicable, mainly, starting with 01.01.2024.
1. Corporate Income Tax
Starting 01.01.2024, the fiscal losses may be recovered up to 70% of their value in maximum 5 years.
The fiscal losses as of 31.12.2023 may be recovered up to 70% of their value in maximum 7 years.
The expenses (including depreciation) related to the owned premises registered as headquarters, which are not used exclusively for economic activities, are deductible up to 50% (the related VAT is subject to the same limitation).
The provisions for bad receivables have decreased up to 30% of the provision value for receivables incurred after 01.01.2024.
Starting 01.01.2024, entities with a turnover in the previous year a turnover higher than EUR 50,000,000 will owe a minimum tax of 1% on turnover (applied to a specific formula), if the corporate income tax is lower than the tax on turnover. In this case, the due corporate income tax will be the minimum tax on turnover.
2. Micro-enterprise income tax
Starting 01.01.2024, the tax rates due by micro-enterprises will be as follows:
- 1% for micro-enterprises with revenues below EUR 60,000 inclusive, obtained from other activities than those listed below;
- 3% for micro-enterprises with (i) revenues above EUR 60,000 or (ii) with activities with NACE codes 5832, 5829, 6201, 6209, 5510, 5520, 5530, 5590, 5610, 5621, 5629, 5630, 6910, 8621, 8622, 8623, 8690 (software development / editing, HoReCa, legal assistance, medical and dental assistance).
Also from the same date, the regime of micro-enterprise taxpayers was significantly tightened as follows:
- A micro-enterprise must submit annual financial statements in due time.
- 2023 financial statements must be submitted until 31.03.2024.
- The threshold of EUR 500,000 will be computed by taking into consideration both the revenues of the company and the revenues of the associated companies according to Law 346/2004.
- A shareholder may own, directly or indirectly, more than 25% of the shares in only 1 micro-enterprise tax-payer.
- A micro-enterprise cannot use as fiscal credit the sponsorships performed.
3. VAT
Starting 01.01.2024, a 9% VAT rate will be applied to the following transactions currently under the 5% VAT rate:
- Sale of houses;
- Sale of photovoltaic panels, solar thermal panels and other related items in specific cases.
The standard 19% VAT rate will be applied for several services / goods with reduced VAT rates (e.g. non-alcoholic drinks, food with added sugar).
Starting 01.01.2024, the VAT exemption for deliveries of medical items will be amended.
4. RO e-Invoice
Starting 01.01.2024, entities established in Romania are compelled to submit invoices through the RO e-Factura system for B2B transactions with place of supply in Romania.
Similarly, foreign entities not established but registered for VAT purposes in Romania are compelled to submit invoices through the RO e-Factura system for B2B transactions with place of supply in Romania.
E-invoices must be sent to SPV in 5 calendar days from the issuance date.
Starting 01.07.2024, the fine for Romanian entities / Romanian VAT fixed establishments of foreign companies is of 15% of the value of the invoice for non-sending / non-receiving invoices through e-invoice national system (and not the value of VAT disclosed in the invoice as previously published). The fines between RON 1.000 and RON 10.000 remain applicable for the period 01.04 – 30.06.2024.
Non-resident companies registered for VAT purposes are subject to a fine from RON 1,000 to RON 2,500 starting with 01.04.024.
No sanctions are applied during the period January 1 – March 31, 2024.