February 2017, tax and business news
Business news
The State Budget for 2017 was adopted by the Parliament
Last week the State Budget for 2017 was approved by the Parliament.
It is based on the assumption of a 5.2% economic increase, negative inflation and a deficit of 2.96%.
The opposition parties argued that there are no chances to implement it in good conditions, as the leading coalition granted fiscal facilities and State helps at the beginning of the year. Also, the critics of the budget say that, in order to cope with the EU requirement regarding the deficit, the public investments will decrease dramatically this year.
Tax news
Modification of the VAT registration procedure
Starting February 2017 the procedure of VAT registration of the Romanian companies changed.
The former procedure requiring the obligation of proofing the intention and the capacity of the company to run economic activity, by providing to the tax authority a lot of redundant documents and data, was cancelled.
Instead, the company must provide fewer documents, and the tax authority makes its own checks to determine the above mentioned intention and capacity.
Although it seems that the VAT registration issue is relaxing, the Finance Ministry Order detailing the new procedure has a final chapter potentially generating serious problems in the future: as of now, the tax authority will use a software to determine, monthly, on the basis of a set of indicators not disclosed to the public, the VAT risk degree of every VAT payer company.
If the software will detect a major risk of VAT fraud for a company, it will automatically lose its VAT code.
There are no details about this procedure yet.
Change in dividend taxation
Starting 2017, the physical persons (Romanian or foreigners) will pay for the dividends taken:
– the dividend tax of 5% (Romanian residents) / the more favorable quota stipulated by the Double Taxation Avoidance Treaty (foreign residents), and
– the health contribution of 5.5%, but only if they do not pay already this kind of contribution for other incomes like salaries or rent. This contribution is not limited anymore.
Macroeconomic indicators
RON / EUR ex-rate evolution
31.12.2011: 4.3197
30.12.2012: 4.4287
31.01.2013: 4.4847
31.12.2014: 4.4821
31.12.2015: 4.5245
31.12.2016: 4.4511
31.01.2017: 4.5006
Inflation rate evolution
2011: 5.79 %
2012: 3.33 %
2013: 3.98 %
2014: 1.07 %
2015: – 0.90%
2016: – 0.54%
Tax deductible loan interest rate
RON: 1.75%
EUR: 4%