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The new specific tax: The impact to the tourism industry

The accommodation and food service activities will experience, next year, major changes and repositioning because the new specific tax will impact the companies differently. From 1 January 2017, the specific tax – which will be calculated based on several variables, such as space dedicated to activity, rank of the locality, seasonality – will be due by all companies that have in the articles of incorporation, as a principal or secondary activity, one or more activities provided by the 8 CAEN codes for hotels, restaurants, bars, listed by law.

Thus, no matter if these companies are currently profitable or register loss they will pay the new tax. Under these circumstances, we anticipate that the companies with significant profits and/or large spaces (over 800 square meters) for this activity will benefit of the new tax system. On the other hand, the companies with low profits or losses will pay a higher tax.

Micro-enterprises are exempted from the specific tax that will apply only to companies registered as profit tax payers.

Do you have these CAEN codes?

From 1 January 2017, the specific tax will be due by companies that, at the end of this year, are not in liquidation and are recorded in the articles of incorporation, as a principal or secondary activity, one of these activities corresponding to CAEN codes.

5510 – Hotels and other similar accommodation facilities;

5520 – Accommodation for holidays and short period;

5530 – Caravan parks, campgrounds and camps;

5590 – Other accommodation facilities;

5610 – Restaurants;

5621 – Food services (catering) for events;

5629 – Other food services;

5630 – Bars and beverage serving activities

How to calculate the tax

There are three formulas of calculation the tax, containing variables such as seasonality coefficient, rank of the locality, space dedicated to the activity, coefficient of adjustment and so on. Positioning is important, so that tax will be calculated depending on the locality, with different coefficients, as follows:Bucharest and eight poles: Brasov, Cluj, Constanta, Craiova, Iasi, Ploiesti, Sibiu, Timisoara;

cities and towns other than the 8 poles;

resorts of national interest;

villages, villages and resorts of local interest.

The three formulas are grouped on the CAEN codes as follows:

1. 5510 -Hotels and other similar accommodation facilities ; 5520 -Accommodation for holidays and short period; 5530 -Caravan parks, campgrounds and camps; 5590 – Other accommodation facilities;

2. 5610 – Restaurants; 5621 – Food services (catering) for events; 5629 – Other food services;

3. 5630 – Bars and beverage serving activities

In case a company owns several locations, the specific annual tax is determined by summing up the taxes calculated for each location according to the formula corresponding to the NACE code.

The companies that carry out several activities imposed with the specific tax, except for those carrying out activities through a hotel complex, the tax will be determined by summing up the taxes for each activity.

The companies that have previously registered losses may recover the fiscal loss from the taxable profit in the next 7 consecutive years from the date on which they return to profit taxation.

Companies which, during the year, derive other activities except the CAEN codes corresponding to specific tax law, apply the system of declaration and payment of profit tax.

Also, businesses operating through a hotel complex and obtain revenues from other activities apply the system of declaration and payment of profit tax. The revenues from other activities that are taken into account revenues from other activities taken into account are those registered until 31 December of that year, inclusive.

The specific tax is provided by Law 170/2016.