Corporate Income Tax 2016
Corporate Income Tax
Mondo Conta accounting company Bucharest present you the most recent news regarding fiscal code.
Recently, the Romanian Fiscal Code was substantially amended – starting 01.01.2016, a new Law (227/2015) will replace the current Fiscal Code (Law 517/2013).
There will be some taxes which will decrease (the main ones are the VAT rate and the dividend tax), but there will be some taxes which will significantly increase, like the local tax on buildings.
The general CIT rate remains 16%, but the tax deductible expenses will be considered the one made in the benefit of the company’s activity without keeping anymore the current list of limitative examples (transport and accommodation expenses made in Romania and abroad by employees or directors, expenses with promotion and publicity for promoting the company’s activity, marketing expenses etc).
There will be some other modifications:
The tax deductible sponsorship expense limit increases from the current 3‰ of the turnover to 5‰ of the turnover;
The tax deductible social expenses limit increases from the current 2% of the salary expenses to 5% of the salary expenses;
The tax deductible interest rate for the loans taken in hard currencies decreases from the current 6% to 4%;
The expenses registered in bookkeeping proven as being linked by corruption facts will be considered as non tax-deductible;
The tax exemptions stipulated in case of research and development expenses will not be recalculated anymore in case the project fails to reach its objectives;
The dividends received from a Romanian company will not be taxable anymore – currently in order to benefit from this exemption, the company receiving dividends from a Romanian company must hold at the date of the dividends distribution at least 10% of its shares for at least 1 continuous year;
The transaction qualified by the tax authority as “artificial” will not be anymore subject of double taxation avoidance treaties;
In case of the tax payers applying the system of declaring and paying the Corporate Income Tax through quarterly anticipated payments, the payment for Q4 of the year will be declared and paid till 25th of December – currently the deadline is 25th of January of next year;
The companies running activities of sportive bets will not be anymore subject of the special tax of 5% from the turnover;
The expenses incurred on behalf of an employee for the voluntary pension schemes and with the health insurance premiums will be fully deductible for the company regardless of the amount. Still, if these costs exceed Euro 400/ participant for each of the two types of expenses, the difference will be considered benefit in kind for the employee;
In case of the transportation vehicles (maximum 3,550 kg and having less than 9 seats) financed by leasing contracts, the 50% tax deductible limit is to applied only to the negative ex-rate difference and not to the whole leasing expenses;
Simplification of the calculus method of the tax deductible protocol expenses and of the legal reserve – they will be calculated only as a percentage from the gross profit, without adjusting anymore the result with the not taxable incomes and expenses;
In case of the adjustments for receivable depreciation, the current obligativity to consider the incomes related by the receivables as taxable incomes will be eliminated;
The losses registered with the not collected receivables are tax deductible in case there are insurance contracts for these amounts;
The adjustments for fixed assets depreciation are deductible if some conditions are met – currently they are fully not tax deductible;
The interest, penalties, fines etc due to Romanian or foreign authorities are tax deductible if they result from contracts concluded with these authorities;
New criteria have been introduced in order to consider tax deductible the expensesincurred by the stocks or by the fixed assets which are missing or degraded and which cannot be imputed to someone – for instance it is not compulsory anymore that the stocks or the fixed assets be insured, or they are degraded and the company can proof that they have been distroyed);
The fee for issuing the anticipated individual tax solution will increase form the current 1,000 EUR to 5,000 EUR for big tax payers and to 3,000 EUR for the other companies;
Starting 01.01.2017, the dividend tax for Romanian citizens will decrease from the current rate of 16% to 5%.