The Fiscal Code, amended again

The Fiscal Code was amended again in the last 2 weeks by Law no. 30/2019 regarding the approval of the Government Emergency Ordinance no. 25/2018 (Law 30/2019 was published in the Official Gazette 44 / 17.01.2019). We hereby present below the most important points.

1. From January 1, 2019, the interest deductibility limitshave been increased for corporate income tax purposes. Thus, the excess costsof indebtedness (the difference between borrowing costs and interest revenues)are deductible if they are less than EUR 1,000,000 (instead of EUR 200,000, theold limit), RON equivalent.

The amount exceeding the EUR 1,000,000 ceiling may bededucted up to 30% (instead of 10%) of the following computation basis:revenues minus expenses minus non-taxable revenues plus profit tax, plus theexcess costs of indebtedness, plus tax depreciation.

The non-deductible interest expenses can be carried forwardalso by companies involved in merger or spin-off processes or the successors ofthese companies.

2. Starting April 1, 2019, corporate income tax payers ormicroenterprise tax payers can use the sponsorship tax credit only forsponsorships made to non-profit entities who are listed in a register ofentities for which tax deductions are granted, register organized by ANAF (thenational tax authorities).

3. The above register can contain only the non-profitentities who operate in the area for which they have been set up, who fulfilledtheir declaratory tax obligations, who have no outstanding tax obligationsolder than 90 days, who filed in annual financial statements, who were notdeclared inactive.

4. As of January 20, 2019, the taxation of the income earnedby individuals from transfers of virtual currency was regulated by consideringthe profits from these transactions to be subject to the 10% income tax rate.

5. As from 1 January 2019, in the case where the performeddeliveries cannot be cashed due to the bankruptcy of the beneficiary or as aresult of a reorganization plan, the VAT base may be adjusted from the date ofthe sentence or of the closing judgement regarding the beginning of thebankruptcy procedure.

6. Also with the same date, the VAT rate of 5% can beapplied for the delivery of dwellings in the case of the purchase of severaldwellings by the same individual (so far, the 5% VAT rate was possible only forthe first delivery to an individual).

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