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Tax and legal alerts

2015

Our Tax and Legal Alerts provide you with information on different tax and legal issues in Romania.

Procedure for applying new tax concessions 

Procedure for applying Emergency Ordinance no.44 / 2015 on granting tax concessions for claims administered by the central fiscal authority has been published in the Official Gazette no. 874 / 23.11.2015.

Implementing Act of the Union Customs Code has been adopted

The Implementing Act of the Union Customs Code was adopted last week and will enter into force on May 1, 2016. The final version of the Implementing Act is not yet publicly available, but publication is expected in December 2015

Judgement of the European Union Court of Justice dated 21 October 2015 case file no. C-347/14

Including short duration videos on an Internet website of a newspaper may fall under the regulations regarding audiovisual media services concludes the recent judgement pronounced by the European Union Court of Justice in case no. C-347/14. Read more

The norms on granting the Authorised Economic Operator ("AEO") status have been revised
This is the first sign that the customs authorities are encouraging companies to apply for this certification, considering that the Union Customs Code, which relies on this certification, will enter into force starting from May, 1st 2016.

New regulations on business interruption sanctions due to non-observance of fire security regulations
The Government Decision no. 915 establishing the criteria for stopping the operation or use of buildings or establishments determined by serious breach of the requirements for fire safety in terms of endangering lives of occupants and intervention forces, failing to ensure the stability of the bearing elements, namely limiting the spread of fire and smoke inside the building and in the neighbourhood was published on November 4, 2015 in the Official Gazette, Part I, no. 824. Read more

Law no. 249/2015 regarding the management of packaging and packaging generated waste
On the 30th October 2015, Law no. 249/2015 regarding the management of packaging and packaging generated waste was published in the Official Gazette, Part I, no. 809. The Law states certain obligations for suppliers of packaging materials, manufacturers of packaging and packaged products, importers, retailers, distributors and public authorities, regarding the manufacturing, labeling, collecting and recycling of packaging and it clarifies the notion of packaging and the person responsible in case of intra-Community acquisition. Read more

Amendments brought to the Fiscal Code
Government Emergency Ordinance no. 50 / 2015 brings important amendments to the tax legislation, applicable from January 1 2016.

Amendments brought to the Tax Procedure Code
Recent amendments concern the nullity of the administrative deed, the interstate collaboration between tax authorities, the amount of the letter of bank guarantee/ guarantee insurance policy, the compensation of tax obligations generated previous to the commencement of insolvency procedures, the competent structure for solving tax challenges, among many others. Read more

Change of rules for personal data transfer to US: Actions to be taken

Actions to be taken into consideration following the invalidation of Safe Harbour principles by a decision of European Court of Justice.

Pursuant to the decision ruled by the European Court of Justice in case C-362/14, the Safe Harbour principles have been declared invalid with respect to the transfers of personal data from European Union to the United States of America. We present below the actions which should be taken into consideration by the data controllers who previously declared to the Data Protection Authority transfers based on a Safe Harbour certificate. Read more

2016 Combined Nomenclature
The European Commission has recently published the Combined Nomenclature applicable starting 1st of January 2016. As a consequence, starting January, you will need to use the new CN codes for customs operations, Intrastat declarations and for operations performed on the basis of the customs and fiscal authorisations issued on CN 2015 tariff codes.

FATCA has been approved
Law ratifying the Agreement between Romania and the United States of America for the improvement of the international tax compliance and for the implementation of FATCA has been approved.

Union Customs Code – new provisions on the suspensive customs procedures
Under the new provisions, the inward processing suspension procedure will merge with processing under customs control regime.

BEPS Final Report Updates on Profit Split
The OECD Secretariat on October 5 published 13 papers and an Explanatory Statement outlining consensus Actions under the Base Erosion and Profit Shifting (BEPS) project. The recommendations under each of the BEPS Actions are intended to form a comprehensive and cohesive approach to the international tax framework, including domestic law recommendations and international principles under the model tax treaty and the transfer pricing guidelines.

Amendments to the transfer pricing legislation
We provide you with a comprehensive overview of the most significant changes applicable as of 1 January 2016 that affect transfer pricing rules. As of now, not all changes are clarified and further guidance through norms or update of secondary legislation is expected in near future.

Cancellation of interest and late payment penalties
Taxpayers will be able to benefit from the cancellation of late payment penalties and from 54.2% reduction in related interest payments, if, among others, they settle the outstanding principal obligations due as of 30 September 2015 by 31 March 2016.

Classification under tariff headings 2106 (“food preparations”) or 3003 (“medicine”)

Recently, the European Court of Justice (‘Court’) has ruled a decision which is of importance for companies that have their business focus on “food supplements” as it gives a clarification on the differences between CN heading 2106 (“food preparations”) and CN heading 3003 (“medicine”).

Data protection alert: The European Court of Justice declares invalid the legal framework governing the transfer of personal data from EU to US, based on Safe Harbour principles. Implications for Romania

On 6 October 2015, the European Court of Justice has ruled by decision pronounced in case C-362/14 that the EU – US Safe Harbour framework for transferring personal data from the EU to US, when the recipient in US holds a valid certificate Safe Harbor is invalid. Read more

OECD Releases Final BEPS Reports

The Organization for Economic Cooperation and Development (OECD) released, on October 5, the final reports under the base erosion and profit shifting (BEPS) project it started two years ago to address perceived gaps in international tax rules.

Amendment of norms regarding the administration of tariff quotas

The new technical norms bring changes to the allocation request and the necessary guarantees for accessing tariff quotas.

 

New amendments to the provisions of the Fiscal Code
On 10 September 2015, Law no. 227/2015 regarding the Fiscal Code was published in the Official Gazette. Please find below the main amendments made to the fiscal legislation by the new Tax Code, generally applicable starting with 1 January 2016.

Are the supplies of fuel for ships used for navigation on the high seas exempted from VAT if performed by an intermediary?
On 3 September 2015, the Court of Justice of the European Union (CJEU) published its judgment in Case C-526/13 "Fast Bunkering Klaipėda" UAB (FBK) concerning the VAT treatment of supplies fuel for ships sailing on the high seas.

The European Court of Justice Judgment concerning the VAT treatment in case of subscription contracts for the supply of consulting services
On 3 September 2015, the Court of Justice of the European Union ("CJEU") published its judgment in the Case C-463/14 Asparuhovo Lake Investment Company OOD ("ALIC").

Decision no. 3/2015 of the Central Fiscal Commission regarding the VAT exemptions for vessels used for navigation on the high seas
The Order no. 961/2015 of the Ministry of Public Finance for approving the Decision no. 3/2015 of the Central Fiscal Commission was published in Official Gazette no. 649/27.08.2015 

 

Amendments brought to the VAT registration procedure

The new Order No. 1966/2015 of the President of National Agency for Fiscal Administration regarding the approval of the model and content of Form (088) “Affidavit for assessing the intention and the capacity to carry out economic activities involving operations within the scope of VAT " was published in Official Gazette no. 580/03.08.2015.

The new Order no. 217/ 4.172/ 1.348/ 835 regulating the income tax exemption applicable to software creation activities was published in the Official Gazette no. 573/ 30.07.2015

Income tax exemption applicable to software creation activities has been simplified by removing the restrictions related to the academic profile which required certain specializations.

Furthermore, it is clarified that the income tax exemption applies to employees who are citizens of EU Member States, European Economic Area and Switzerland as well, based on the studies diploma acknowledgement by the Ministry of Education and Research and on the fulfillment of the other conditions by the Romanian employer.

Changes brought by the Tax Amnesty Law

In this issue you may read about the items covered in the amnesty law, recently published, which waives the tax debts arising on several particular situations in the field of income tax, social security contributions and VAT.

Amendments to Law no. 344/2006 regarding the posting of employees in the framework of the provision of services

GEO no. 28/2015 amended and supplemented Law no. 344/2006 regarding the posting of employees in the framework of the provision of services, in order to: (i) regulate cases where undertakings established in Romania post employees to other EU Member States, EEA or Switzerland; (ii) determine the applicable legal provisions to employees who perform international transport operations in favor of undertakings established in Romania and do not fall within the scope of Law no. 344/2006.

Recent amendments of the Tax Code and of other regulatory acts

The Tax Code was amended in relation to reclassifying an economic activity and applying the 9% VAT reduced rate for supplies of draft beer. Also, the European Court of Justice issued two decisions on the qualification of individuals as taxable persons for VAT purposes and on the VAT exemption for veterinary services. Last but not least, clarifications were brought on the taxation of tips.

Statistics on transfer pricing audits performed by the Romanian Tax Authorities (RTA) during the first semester of 2015

The National Agency for Fiscal Administration (ANAF) issued a press release with regards to the transfer pricing audits performed by the Romanian Tax Authorities (RTA) during the first semester of 2015. The document points out that amounts assessed during transfer pricing audits in the first half of 2015 are 130% higher than the amounts assessed for the entire fiscal year 2012 and provides other relevant insights into inspectors’ activity, to date.

Law no. 152/2015

On 13th of July 2015, Law no. 152/2015 for amending and supplementing legislative acts regarding trade registry registrations (“Law no. 152/2015”) was published in the Romanian Official Gazette no. 519, Part I. The law amends the following enactments: Companies Law no. 31/1990, Law no. 26/1990 regarding the Trade Registry, Law no. 359/2004 for simplifying the formalities of registration in the Trade Registry of natural persons, family associations and legal persons, their fiscal registration, as well as the authorization for functioning of legal persons, and Emergency Government Ordinance no. 116/2009 for establishing some measures regarding registration in the Trade Registry.

Amendments to Competition Law

On 30 June 2015, Emergency Ordinance no. 31/2015 came into force, bringing amendments to competition law no. 21/1996 as efficiency measures in the field of competition following the obligations undertook by the Romanian Government towards the World Bank.

Among the most important changes we mention:

  • Amendment of the definition of undertaking, by reference to the notion of economic entity, that may comprise one or more persons, who are under the same control structure;
  • Exclusion of certain actions from the anti-competitive practices provided under art. 5 and art. 6 of Competition Law;
  • Amendments of the procedure regarding investigations conducted by the Competition Council, in particular by regulating the trading procedure – introducing the possibility of acknowledgement of the anticompetitive practice anytime during the investigation, opposite to the previous legislation when such possibility only existed after the finalization of the investigation report. Read more

Pilot project - EU AEOs recognition at Moldova – Romania border crossing point
As from 1 July 2015, the pilot project on the recognition of the European Authorized Economic Operators (AEO) is being implemented at the Moldova - Romania border crossing point Leușeni-Albița, to facilitate the trade between the EU and Moldova.

Increment of the national minim gross wage at 1,050 lei
Starting with 1 July 2015, the amount of national minim gross wage was increased to 1,050 lei for a full time employment. This amendment triggers a number of obligations incumbent upon employers that are detailed in this alert.

Amendments of the Law 10/1995 regarding quality in constructions

On June 30, 2015, a legislative project amending and supplementing Law no. 10/1995 regarding quality in constructions (“Law 10/1995”) has been promulgated by the President as Law 177/2015. Access the link below to learn more about the main amendments brought by this law.

 

OECD issues Country-by-Country Reporting Implementation Package

On 8 June 2015, the Organization for Economic Cooperation and Development (“OECD”) released Action 13: Country-by-Country Reporting Implementation Package (“CbC”), by which additional assistance is offered with respect to the implementation of CbC reporting. The CbC implementation package outlines model legislation that governments can use to adopt the new rules, as well as competent authority agreements to implement the sharing mechanisms for the CbC report. Click the link to access a material presenting in more detail each provision introduced by OECD through this action regarding the implementation of the CbC reporting.

Updates regarding the approval of the New Fiscal Code

On June 24th, 2015, the New Fiscal Code was also approved by the Chamber of Deputies and is now awaiting promulgation by the President.

Updates regarding the approval of the Law for the annulment of some tax liabilities (“Fiscal amnesty”)

On June 24th, 2015, the Chamber of Deputies approved the Law on waiving certain tax liabilities arising from the reclassification of freelancers, for the period up to July 1, 2015.

OECD issues discussion draft on hard-to-value intangibles

On June 4, 2015, the Organization for Economic Cooperation and Development (OECD) released a non-consensus discussion draft on Action 8 of its base erosion and profits shifting (BEPS) plan regarding hard-to-value intangibles (hereinafter referred to as “HTVI”).

Legislative act regarding gambling activities organised and operated in Romania

Law no. 124/2015 approving the Government Emergency Ordinance no. 92/2014 on the regulation of tax and budget measures as well as amending legislative acts (Law no. 124/2015”) was published in the Official Gazette of Romania no. 407, Part I, on 9 June 2015 and became effective on 12 June 2015.

This legislative act contains several relevant provisions regarding gambling activities organised and operated in Romania. The main amendments have been summarised in this alert.

New amendments to the Methodological Norms of the Fiscal Code

Starting 1st of June 2015, new amendments brought to the Methodological Norms of the Fiscal Code came into force. These refer to corporate income tax, income tax and social security mandatory contributions, VAT, excise and construction tax.

The amendments were published on 28 May 2015 in the Official Gazette no. 373, through Decision no. 367 concerning the amending of the Methodological Norms for applying Law no. 571/2003 regarding the Fiscal Code, approved by Decision no. 44/2004.

An introduction to the Romanian Personal Insolvency Law

On 20 May 2015, the Romanian Parliament adopted the Personal Insolvency Law (“PIL”). Reff & Associates, the law firm representing Deloitte Legal in Romania, has prepared a material summarizing the main provisions of the new law. We note that the law is not currently in force. It will first need to be promulgated by the President of Romania, after which it shall entry into force within six months as of its publication in the Official Gazette of Romania. In accordance with the law, the President is entitled to send the proposed law back to the Parliament for re-examination (however, this can be done by the President only once).

Amendments to the Fiscal Code
On 14 April 2015, Emergency Ordinance no. 6/2015 amending the Fiscal Code (“the Ordinance”) was published in Official Gazette no. 250. The amendments refer to withholding tax and VAT.

New decision of the European Court of Justice
On 16 April 2015, the European Court of Justice („ECJ”) decided in case C-42/14 Wojskowa on the VAT treatment of utilities costs recharged by landlord to tenants in the frame of rental arrangements.

The European Banking Authority issues Guidelines on the security of internet payments

On December 19, 2014, EBA published the Guidelines on the security of internet payments to establish a set of minimum requirements concerning the security of payment services offered through the internet (internet payments). The Guidelines have been issued in response to the high levels of fraud surrounding internet payments and will be implemented on 1 August 2015.

Request for preliminary ruling lodged by Romania to the Court of Justice of the European Union – case C-183/14

On March 11, 2015 took place the hearing for the C-183/14 - Radu Florin Salomie, Nicolae Vasile Oltean vs. Direcția Generală a Finanțelor Publice Cluj case, lodged by Curtea de Apel Cluj to Court of Justice of the European Union.

Another regulation enters into force for the granting of licenses and authorizations in the energy sector

On March 17, 2015, the Order issued by the President of the Regulatory Authority for Energy no. 12/2015 approving the Regulation for granting licenses and authorizations in the energy sector (“Order 12/2015”) was published in the Official Gazette as well as entered into force.

Tax updates 

The Norms regarding the deduction for corporate income tax purposes for the research and development expenses, approved through the joint set out Order 2086/4504/2010 were modified through a new order published in the Official Gazette on 16th March 2014. The changes bring both an allignemt to the Fiscal Code and a series of new elements.

CJEU ruling makes it possible to seek damages for online copyright infringements in any EU jurisdiction where the copyright can be illegally accessed

In the case C-441/13 (Pez Hejduk v EnergieAgentur.nrw Gmbh), CJEU confirmed that it is possible to request damages for online infringements in any jurisdiction where the copyright is unlawfully made available, not only in the jurisdiction of the defendant.

Competition Council releases report on its inquiry of Romanian electricity market

On March 3, 2015, the Competition Council launched report on its inquiry of Romanian electricity market, upon an investigation conducted between 2008 – 2013. The analysis focused mainly on identifying the features of the domestic energy market, establishing the market shares of the participants on the market, as well as identifying the main competition constraints for participants on the market.

News regarding sponsorship reporting
The Order of the Health Minister approving the Norms for the evaluation and approval the advertising for human use drugs was published in the Official Gazette no. 168 on 11th March 2015.
This Order brings clarifications with respect to the way the drugs are promoted to the public, but also to medical professionals.

News regarding the claw-back tax
Emergency Ordinance no.2 regarding the amendments to Emergency Ordinance 77/2011 in relation to the claw-back tax was published in the Official Gazette no. 176 on 13th March 2015.

Advocate General opinion on the VAT treatment of supplies of fuel to vessels via undisclosed intermediaries

On March 5th, Advocate General (“AG”) Sharpston from the Court of Justice of the European Union (“ECJ”) delivered her opinion in case C-526/13 Fast Bunkering Klaipeda UAB (“FBK”).

The question of the case is whether the VAT exemption for supplies of fuel to vessels used for navigation on the high seas should be applied only to the final supply to the vessel operators or can be extended to prior supplies (in the commercial chain) to undisclosed intermediaries.

New requirements for protecting children involved in non-profit and profit-making activities

On February 13, 2015 Government Decision no. 75/2015 ("HG 75/2015") entered into force, regulating the provision of profit-making activities by children in the cultural, artistic, sports, advertising and modelling fields. The document was published in the Romanian Official Gazette, First Part, no. 115 dated February 13, 2015.

HG 75/2015 establishes the necessary conditions for providing remunerated activities by children in the cultural, artistic, sports, advertising and modeling areas on the basis of agreements concluded with the organizers, regardless of whether their provision is remunerated or not. The Decision also introduces the requirement to give prior notification of these activities to the social public assistance service and establishes obligations for organizers and parents/legal representatives of the children related to the provision of activities.

OECD / G20 Base Erosion and Profit Shifting Project. Action 13: Guidance on the Implementation of the Transfer Pricing Documentation and Country-by-Country Reporting

Following the report published by the Organization for Economic Cooperation and Development (“OECD”) in September 2014 regarding three-tier approach on the transfer pricing documentation, more precisely the master file, the local file and the Country-by-Country reporting (CbC), OECD offers additional assistance through Action 13 regarding the implementation of the documentation and of the CbC reporting in order to ensure a consistent approach.

Tax updates 

Order no. 60/2015 for updating the daily allowance for delegation and secondment provided by Government Decision no. 1.860/2006 was published

The order regarding the consumer price index used to compute the advanced corporate income tax payments for the year 2015 was published in the Official Journal no. 76

Platform about alleged competition infringements

The Competition Council has launched an on-line platform to enable any person who has information about potential infringements of competition regulations to inform the Competition Council as regards their existence.

New provisions regarding the registration for VAT purposes; extending the applicability of the reduced VAT rate of 9% in the tourism sector

Amendments to Labour Code

On 25 of January, 2015 entered into force the last amendments to Labour Code. Among the most important amendments we mention:

  • The right of employees to paid vacation even if they benefited from medical leave;
  • Temporary work incapacity leave, maternity leave, maternal risk leave and sick child leave are considered performed working time;
  • Interruption of paid vacation due to temporary work incapacity leave, maternity leave, maternal risk leave and sick child leave;
  • Rule of granting paid vacation in proportion to the amount of time worked has been removed;
  • Groundless absence and unpaid leave shall be deducted from the work seniority of the employee.

Tax changes

The new legislative changes are in relation with the construction tax, with the VAT registration procedure and with a decision issued by the Central Fiscal Commission.

Tax Changes

1. Amendments to the form and the filing instructions related to Form 101
Order of the President of the NAFA no. 4024/2014 amends Form 101 (annual corporate income tax return) and the related filing instructions.

2. Amendments to the filing instructions related to Form 100 and Classification List of the contributions to the state budget
The filing instructions related to Form 100 “Declarations regarding the payment of contributions to the state budget” was amended regarding various types of income obtained by individuals and related to the compliance procedures for claw-back tax.
The Classification List of the contributions to the state budget has been modified to also include contributions for financing the health sector (i.e. the claw back tax).

3. Amendments of the provisions in respect of Form 394
The suspension of the reporting of fiscal receipts in the Form 394 has been prolonged until 31 December 2016.

4. Changes of legal framework for gambling operations
Emergency Ordinance no. 92/2014 that regulates fiscal measures and amends certain enactments as well as amends both Government Emergency Ordinance no. 77/2009 regarding organization and operation of gambling activities as well as Law no. 571/2003 regarding the Fiscal Code.

5. Changes in measures regarding consumer information
Order no. 594/2014 amending the Order of the National Authority for Consumer Protection (ANPC) no. 72/2010 regarding measures for consumer information has been published.

Revision of Annex 1 of the dual-use Regulation

The European Commission published on December 30, 2014 the revision of Annex 1 of the Regulation (EC) 428/2009 (“dual-use regulation”), establishing the common list of dual-use items, i.e. items that can be used for both civilian and military purposes, which are subject to controls throughout the European Union (“EU”).

By amending the dual-use regulation, new products were added to the common list of dual-use items that are subject to controls, while other products were excluded.

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