New provisions in the Tax Code from 2017: Lower administrative burden and new facilities for investors

The Register of Intra community operators is eliminated, several declarations are temporarily suspended and some facilities for investors are extended: stock option plan, reinvested profits, deductible expenses. These measures reduce the administrative burden for companies and introduce some measures to stimulate investment, to motivate employees and develop professional skills. Contexpert has analyzed the main changes in the Tax Code:
Stock Option Plan
Stock option plan will be used by any legal entity that offer to its employees, administrators and / or managers or of its affiliated legal entities, the right to acquire at a preferential price, or to receive for free a certain number of shareholding titles issued by the entity, without being restricted only to legal entities whose securities are admitted to trading on a regulated market or traded on an alternative trading system, as it is provided at this moment.

Modified fiscal year

There are regulated the situations when it will be required either return to the calendar year or the change of the period of modified fiscal year.

Reinvested profits

It is eliminated the limitation of the application of exempting reinvested profits (currently until 31 December 2016). This facility will be applied indefinitely.

Exemption of reinvested profits will apply also for the right to use the software, without acquiring ownership of the respective software, the acquisition of patents, intellectual property rights on design and other innovations related to that software. Basically, it will apply for purchased licenses. Now the tax exemption can be applied for technological equipment, computers and peripherals, machinery and home appliances, control and billing, as well as for software, products and / or purchased, including under finance leases and put in operation, used for business purposes. The measure should stimulate a more rapid deployment of information technologies.

Deductible expenses with professional training
Expenses with theoretical and / or practice of students within vocational and technical education will be fully deductible, both at the calculation of profit taxes and the net annual income subject to income tax. The aim is to develop vocational and technical education system.

Micro-enterprises and the option for profit tax

The limit for registered capital of the company will be reduced from 25,000 euros to 45,000 lei (10,000 euros) for the micro-enterprises that opt to pay corporation tax. Micro-enterprises which have registered capital of 25,000 euros and opted to maintain their profit tax status after the entry into force of these provisions, even if the capital is reduced until the new limit of 45,000 lei. The existing micro enterprises may opt for profit tax in case they already have or they opt to increase their registered capital up to the new limit of 45,000 lei.in case they have or increase their registered capital up to the new limit of 45,000 lei.

New types of non-taxable income
Scholarships, awards and other rights as accommodation, meals, transport, work/ safety equipment received by students during professional and technical education will be nontaxable.

Forms eliminated for some categories of income
Payers of withholding of tax source incomes from wages, intellectual property rights, pension, leasing, associating an individual with a legal entity will no longer submit form 205 in the next year for these types of income.

Exemption for day laborers

Gross remuneration received for work performed by day laborers will be exempted from payment of mandatory social contributions.

VAT: ROI is eliminated, three declarations are suspended and special regime for farmers is introduced

VAT on capital goods will adjust annually in the period of adjustment for 1/5 or 1/20 of tax for acquisition, manufacturing, construction of the goods. The measure was proposed by the Ministry following the opening of infringement procedures by the European Commission because the adjustment is now for the entire duration that remained from the adjustment period.

The special regime for farmers, individuals, individuals, individual companies or family enterprises that perform activities / agricultural services will be introduced.

The provisions related to Register of Intra-community operators (ROI) will be eliminated, the VAT code of all taxable persons registered for VAT purposes being valid, by default, in VIES.

The submission of the 392A, 392B and 393 declarations will be suspended until 31 December 2019.

Rights reinstatement in case of re-registration for VAT purposes

Taxpayers that will re-register for VAT purposes after their tax codes were canceled by ANAF:

will issue invoices with VAT to customers for all sales made during the period they were not registered for VAT purposes, having the right to recover the collected tax
will deduct VAT (after re-registration) for purchases related to sales made during the period when their VAT code was canceled
Their beneficiaries will deduct the tax for the purchases made during the period in which the supplier had not valid VAT code
Expenses recorded by inactive taxpayers and by their beneficiaries will be taken into account in determining the fiscal result related to profit tax, either in the fiscal period of the current year or by the rectification of profit tax declaration of the previous fiscal year.

Disclamer: The new provisions have been adopted by the goverment, but they have not been published, yet, in The Offcial Monitor.

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New provisions in the Tax Code from 2017: Lower administrative burden and new facilities for investors