Tax & Legal Weekly Alerts 2014 | Deloitte Romania and Moldova | News has been added to your bookmarks.
Tax & Legal Weekly Alerts
Our weekly Tax & Legal Alerts provide you with information on different tax and legal issues in Romania.
Provisions concerning tax returns certification and the procedure for submitting certification documents.
Publishing in the Official Journal the provisions and procedures regarding the certification of tax returns, hopes to clarify the process throughout which the tax consultant can render the service, as well as the obligation of the parties.
The excise duty level in RON for 2015 remains at the level practiced in 2014 according to a draft Government Emergency Ordinance of the Ministry of Finance
On the website of the Ministry of Finance was published a draft Ordinance according to which the excise duty level starting with 1st of January 2015 will be expressed in RON at the same level practiced in 2014 following to be updated annually with the increase of the consumer prices.
Provision of customs representation services available to everyone, not only by customs brokers
According to an Order issued by the National Agency for Fiscal Administration, as of December 19th, 2014 provision of customs representation services will become available to any person which is entitled to present the goods in customs, not only by authorized customs brokers.
Customs simplifications for Community goods transported on the Danube between two ports in Romania – A step towards streamlining the naval transportation
Starting last week, the customs formalities for Community goods transported on the Danube between two ports in Romania were simplified, these being tracked by the customs authority in the RORIS system of the Romanian Naval Authority
Latest amendments regarding the claw-back tax in Romania
The Government amended the Emergency Ordinance 77/2011 regarding the claw-back tax. Based on the new provisions, the market authorizations holders/their legal representatives will pay a different claw-back tax for the medicines conditionally included in the list of compensated medicines for which cost-volume/cost-volume-result agreements were concluded
Combined Nomenclature as of January 1, 2015
The European Commission has recently published the Combined Nomenclature (“CN”) applicable as of January 1, 2015. As a consequence, starting January 1, 2015 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 2014 tariff codes.
Binding Tariff Information ceases to be valid following the new classification opinions issued by the World Customs Organization
The European Commission released a communication according to which the Binding Tariff Information (BTI) already issued ceases to be valid if it becomes incompatible with the new classification opinion published by the World Customs Organization.
Amendments and supplementations brought to Energy and Natural Gas Law no. 123/2012
On 30 September 2014 the Romanian Parliament adopted Law no. 127/2014 (“Law no. 127”) for amending and supplementing the Energy and Natural Gas Law no. 123/2004 as well as the Oil Law. Law no. 127 has been published in the Official Gazette of Romania no. 720/1.X.2014, First Part, and entered into force on 5 October 2014.
Law no. 127/2014 brings a number of changes to the energy sector of which the most important are the amendment of the legal framework governing transport networks and the implementation of the European rules stipulating the conditions under which property and activity can be separated between transport and system operators as well as between electric energy producers and distributors/suppliers. Furthermore, ANRE has been granted the competency of an autonomous regulatory body and now has the power to settle complaints lodged against transport and system operators as well as against distribution operators. Additional rights for consumers have also been introduced under the new amendments.
OECD releases the BEPS Project 2014 deliverables
On September 16, the Committee on Fiscal Affairs of the Organization for Economic Cooperation and Development (OECD) released the documents promised in the 2013 Action Plan on Base Erosion and Profit Shifting. The 2014 deliverables represent 7 of the 15 actions of the BEPS Project and provide draft recommendations to change domestic tax laws, treaties, and other measures so as to combat government concerns about tax base erosion and profit shifting as well as tax treaty abuse.
Update to the additional strengthening of the restrictive measures against Russia
In August, we informed you regarding restrictive measures imposed by the European Union (‘EU’) with respect to the export of certain products and services to the Russian Federation (’Russia’). Due to the political situation in Eastern Ukraine, the European Council decided to strengthen the existing restrictive measures.
Starting with March 15th, 2015, electronic signature will become mandatory when submitting the Entry Summary Declaration
As of September 15th, 2014, economic operators introducing goods in the EU through Romanian customs offices may use electronic signature for submitting the Entry Summary Declaration via ICS-RO customs system.
The use of the electronic signature is optional for a period of 6 months starting with the date of approval of the Order, and will become mandatory as of March 15th, 2015.
Clarifications with respect to the classification of supporting towers of wind turbines from a building tax perspective
Decision no. 5/2014 of the Central Tax Commission brings clarifications with respect to the classification of supporting towers of wind turbines as buildings for building tax purposes under the provisions of the Fiscal Code.
Customs declarations submitted outside working hours for Authorized Economic Operators (AEO)!
According to a draft order published on the website of the General Customs Directorate, companies’ holder of an AEO certificate will be able to submit customs declarations outside working hours.
Amendments to Unfair Competition Law and Competition Law
On September 5, 2014 the last amendments brought through Government Ordinance no. 12/2014 to regulations in the competition field entered into force.
Among the most important amendments we mention:
- Although there are identified as practices of unfair competition only the acts of denigration of a competitor or its products/services as well as undermining the client base, the “unfair competition" practices are defined extensively;
- It was given the opportunity to Competition Council not to act when it considers that the effects of unfair practices are minor and to prioritize investigations of anticompetitive practices based on certain criteria;
- It is introduced the rule of appealing against the order related to access the confidential part of investigation file only at the end of the investigation.
Additional restrictive measures against Russia
On July 31, 2014, the European Council released a Regulation and a Decision, in response to the escalation of violence in the Eastern Ukraine and the crash of flight M17, warning Russia “that the illegal annexation of territory and deliberate destabilization of a neighbouring sovereign country cannot be accepted”. Therefore, the European Union (‘EU’) decided to strengthen the restrictive measures already in place against Russia since March 17, 2014 which were implemented after the illegal annexation of Crimea by Russia.
The Parent-Subsidiary Directive has been amended
The European Union has amended the Directive 2011/96/EU (i.e. the Parent-Subsidiary Directive) in order to stop the use of hybrid financing instruments and has extended the list of Member State companies to which this Directive applies (i.e. for Poland and Romania).
The Romanian Government has adopted the procedure regarding the refund of excise duties afferent to the diesel used as fuel in road transportation
This new decision settled the conditions and the refund procedure as state aid scheme, for a part of the excise duties on diesel used as fuel in road transportation, namely the amount of 40 / 1000 liter and 47.34 euro / ton.
The refund will be granted quarterly based on a request addressed to the Romanian Road Authority by the carriers which meet the specified conditions of the decision.
Amendments to the legislation governing public procurement and concession of public works and services
On June 28th 2014, Government Emergency Ordinance no. 51/2014 amending and supplementing Government Emergency Ordinance no. 34/2006 on awarding public procurement contracts, contracts for concession of public works and contracts for concession of services entered into force.
The legal regime applicable to employee inventions
Law no. 83/2014 regarding the employee inventions (hereinafter referred to as “the Law") was published in the Official Gazette no. 471 dated 26 June 2014, and the provisions have entered into force as of 29 June 2014. The scope of the Law includes inventions created by the employees of a legal entity, either of public or private law and which can be legally protected by a patent or a registered utility model.
Recent enactments issued by the National Energy Regulatory Authority in the energy field
On 26 June 2014 the president of the National Energy Regulatory Authority (“ANRE”) has issued two regulations having a direct impact on the production of renewable energy: Order no. 49 regarding the approval of the Methodology for determining the mandatory annual quotas of electrical energy produced by renewable energy sources and which benefit of the promotion system of green certificates; and Order no. 48 regarding the approval of the Regulation on the accreditation of the electrical energy producers from renewable energy sources for the enforcement of the promotion system by green certificates.
Changes to the Tax Procedure Code
The Government Emergency Ordinance for amending and supplementing certain normative acts as well as for regulating certain tax-related measures was published in the Official Gazette on 23 June 2014.
Changes to the Fiscal Code
Starting with January 1st 2016, employees who restructure their bank loans may benefit of additional deductions for personal income tax purposes.
Impact of the Insolvency Code on the role of credit institutions in the insolvency procedure
On June 28, 2014 the Law no. 85/2014 regarding the prevention of insolvency and insolvency procedures entered into effect introducing a few substantive amendments regarding the rights of privileged creditors.
Among the most important amendments we mention:
- the amounts available in the debtor’s accounts at the date of opening the procedure and over which was established a movable mortgage would be distributed to the mortgaged creditor at its simple request;
- the facilities granted to the debtor during the observance period with the view of undertaking its current activities are repaid with priority during the debtor’s bankruptcy procedure and they will be secured with assets or rights which are not object of other securities or priority rights; if such assets or rights are not available, the rights of the privileged creditors will be diminished;
- the amounts granted to the debtor by a credit institution after the opening date of the insolvency procedures may be set-off with the amounts deriving from its current activity cashed by the debtor in the bank accounts opened at the respective credit institution.
Important amendments to legislation on consumers’ rights under contracts concluded with traders with effect from 13 June 2014
On 11 June 2014 Emergency Government Ordinance no. 34/2014 on consumers’ rights under contracts concluded with traders, amending and supplementing certain enactments ("EGO no. 34/2014”), was published in the Official Gazette no. 427. EGO no. 34/2014. It transposes at the national level the provisions of Directive 2011/83/EU of the European Parliament and of the Council as of 25 October 2011 on consumer rights, and upon entry into force on 13 June 2014 certain enactments have been repealed, including GO no. 130/200 on the protection of consumers in respect of concluding and performing distance contracts.
Possible anti-competitive conduct by professional associations
In May 2014 the Loan Market Association, an international professional association operating in the banking sector, issued a statement regarding possible breaches of competition law by associations of undertakings established in the banking system. Following this statement, we detail hereinafter possible anti-competitive practices to which members of a professional association may be exposed, irrespective of their sector, namely:
- Risk of coordination of competitive behavior on the market (Cartel);
- Exchange of sensitive information from a competition perspective between competitors;
- Exclusion from association of other potential competitors in lack of objective and justified criteria.
The Regulation regarding the acceptance upon completion of the construction works and of the related installations, ratified by Government Decision no. 273/1994, has been amended by Government Decision no. 444/2014 which introduces a new notification obligation for investors and which grants additional attributions to the State Construction Authority (S.C.A.) in the procedure for the acceptance upon completion of construction works
Therefore, starting from 3 June 2014, the role of the SCA has been extended and the authority now has the right to participate as a member in the acceptance upon completion of works committee, including for buildings funded by private financing. In addition, according to the new regulations, investors must notify the SCA of the completion of works and must present the proof of payment of all construction taxes due; otherwise, the procedure for the acceptance upon completion of works will be postponed.
New amendments brought to the Methodological Norms for applying the Fiscal Code
By the Government Decision no. 421 dated 20 May 2014 amendments to the Methodological Norms for applying the Fiscal Code are brought with respect to corporate income tax, construction tax, withholding tax, value-added tax, as well as excise duties and other special taxes.
New amendments brought to the Fiscal Code – Excises
We would like to inform you that on May 14, 2014 the chapter regarding the non-harmonized excise duties from the Fiscal Code has been amended.
Customs mutual recognition of “trusted traders” between European Union and China
The EU and China formally agreed to recognise each other's safe traders, i.e. authorised economic operators (AEO), as a result of a mutual recognition decision signed on May 16, 2014 at Beijing.
Participation at information programs on benefits of mediation no longer mandatory
On 7 may 2014 the Constitutional Court has unanimously admitted the unconstitutionality exception raised against the provisions of article 2 paragraph 1 and 1^2 of Law no. 192/2006 regarding mediation and the mediator profession, that stated that undergoing the information procedure regarding the benefits of mediation is mandatory in the case of disputes regarding certain legal fields and stated that the mentioned provisions are unconstitutional. Following the decision of the Constitutional Court, participation at information sessions on the benefits of mediation is now optional.
New legislative amendments regarding the sale of agricultural land located outside the urban boundaries
Law no. 68/2014 regarding the amendment of certain provisions of Law no. 7/1996 regarding cadastre and immovable assets publicity and of Law no. 17/2014 regarding the sale of agricultural land located outside the urban boundaries (hereinafter the "Law") was published in the Official Gazette no. 352 issued on 13 May 2014.
New rules for oil and gas companies seeking to obtain the building permit for exploration/ geological prospecting/ exploitation operations
The Emergency Government Ordinance no. 22 dated 6 May 2014 for the amendment of Law no. 50/1991 concerning the approval of construction works (hereinafter the „Ordinance”) was published in the Official Gazette no 353 issued on 14 May 2014.
Ordinance 22 brings important changes for companies from the oil and gas sector which perform exploration, geological prospect and exploitation in Romania (hereinafter the “Operations”). The purpose of Ordinance 22 is to simplify the formalities and time necessary for the issuance of the urbanism certificate and the building permit for the construction works necessary for the performance of Operations.
The tax exemption for reinvested profit was reintroduced
Starting from 1 July 2014, tax exemption for reinvested profit will be applicable for profit reinvested in technological equipment, machines, work equipment and installations used for business purposes. The tax incentive would be applicable for new equipment produced or bought after 1 July 2014 and commissioned before 31 December 2016.
The report launched by Competition Council regarding its activity in 2013
In April 2014, the Competition Council launched the Report regarding its activity for the year 2013 where it presents the progress of the investigations performed during 2013 as well as the application of sanctions compared to previous years. Among the goals to be achieved in 2014, the Competition Council envisages finalizing the ongoing investigations in food retail sector, media, drilling services and milk sector.
The procedure for solving VAT refunds was amended
Amendments to the procedure for solving VAT refunds were brought after the threshold for VAT refunds granted with subsequent tax audit was increased from 10,000 to 45,000 lei. Also there was a need to update the conditions for establishing the level of fiscal risk.
Publishing of the new EU Directives on public procurement
New EU Directives on public procurement have been published in the Official Journal of the European Union on 28 March 2014. Therefore, in a term of 20 days as of the date of publication, Directive 2014/24/EU of the European Parliament and of the Council of 26 February 2014 on public procurement (Official Journal no. 94/65) and Directive 2014/25/EU of the European Parliament and of the Council on procurement by entities operating in the water, energy, transport and postal services sectors (Official Journal L 94/243) shall come into force.
New „telecom legislation package” voted by the European Parliament
The European Parliament voted on 3 April 2014 a proposal within the new telecom legislation package that envisages the regulation of the net neutrality concept, together with other amendments in this field.
New rules on public support in the renewable energy
The European Commission has adopted, in principle, Guidelines regarding the applicable criteria for the assessment of state aid for environmental protection and energy 2014-2020. The version of the document was published on the European Commission website for informative purposes and will be subject to amendments until its publication in the European Union Official Journal. The new Guidelines will replace, with effect from 01.07.2014, the Community Guidelines on state aid for environmental protection, published in the European Union Official Journal no. C82 dated 01.04.2008.
A contract between a data exporter and data importer containing standard clauses approved by the European Commission for an intragroup personal data transfer is no longer needed, provided that the group has in place Binding Corporate Rules approved by the relevant authorities
On 27 March 2014, the Romanian Data Protection Authority issued Decision No. 41/2014 approving the authorization model for the transfer of personal data between companies part of a multinational group using Binding Corporate Rules (“BCR”).
Amendment to rules on environmental inspection has entered into force
Order no. 256/2014 of the Ministry of Environment and Climate Change ("Order 256/2014") amending the Annex to the Ministry of Environment and Climate Change no. 464/2009 approving the norms regarding organization and deployment of environmental protection control and inspection activities was published in the Official Gazette no. 193 of 19 March 2014 (the "Regulations").
Considerable reduction of retaliatory duties on imports from the United States
In 2005, the European Union (EU) decided to impose a 15 % ad valorem additional customs duty on imports of certain products originating in the United States of America. This was due to the United States’ failure to bring its dumping and subsidy legislation in compliance with its obligations under the World Trade Organization (WTO) agreements. Since then, both the list of US originating products for which these measures apply and the additional duty rate has been adjusted on several occasions depending on the level of impairment caused by the US legislation to the EU.
Proposals for Action 1 (Tax challenges of the digital economy) and for Action 6 (Prevent Treaty Abuse) of the BEPS Action Plan
OECD released a discussion draft which includes proposals for Action 1 (Tax challenges of the digital economy) and for Action 6 (Prevent Treaty Abuse) of the BEPS Action Plan.
New restrictions on the sale of agricultural land located outside the urban boundaries
Law no. 17/2014 regarding some measures regulating the sale-purchase of agricultural land located outside the urban boundaries and amending Law no. 268/2001 regarding the privatization of companies managing agricultural land in public and private ownership of the state and establishing the State Domains Agency (hereinafter the "Law") was published in Official Gazette no. 178 issued on 12 March 2014. The provisions of the Law will enter into force within 30 days as of its publication in the Official Gazette.
New rules regarding the GC support scheme for E-RES producers
In view of approving the amendments brought in 2013 to Law no. 220/2008 for establishing a support scheme for energy production from renewable sources, on 14 March 2014 Law no. 23/2014 for the approval of Government Emergency Ordinance no. 57/2013 for the amendment and supplementation of Law no. 220/2008 for establishing a support scheme for energy production from renewable sources was published in the Official Gazette of Romania no. 184.
The new law approves the provisions of the Government Emergency Ordinance no. 57/2013, however it also sets forth important amendments regarding: (i) the scope of work of the support scheme; (ii) the yearly mandatory quotas of energy generated from renewable sources that benefits from the support scheme; (iii) the granting of additional green certificates; (iv) the repealing of the limitation on accreditation established by GEO no. 57/2013, as well as other amendments that can be of interest.
Amendments to the Fiscal Code and to the Fiscal Procedure Code
The Emergency Ordinance no. 8/2014 (the Ordinance) was published in the Official Gazette no. 151 on 28th of February 2014. The Ordinance includes amendments to the Fiscal Code and to the Fiscal Procedure Code.
Consumer price index used for updating advanced corporate tax payments was published in Order 256/2014
The consumer price index used during 2014 for updating advanced payments for annual corporate income tax has been set at 102.4%.
High Court of Cassation and Justice ruled on the tax treatment of gift tickets
The High Court of Cassation and Justice has ruled that gift tickets granted on a regular basis by an employer to its own employees would be considered a benefit assimilated to salary. Therefore, the respective expenses cannot be qualified as social expenses, i.e., benefits that are not subject to social charges and Romanian income tax.
Amendment of statement 100 regarding state budget payment obligations with respect to separate declarations for certain taxes
Starting from January 2014, several taxes regarding income derived by non-residents will be declared separately.
Amendments to several pieces of legislation comprising criminal law and criminal procedure provisions under New Criminal Code and New Criminal Procedure Code
Following the entering into force of the New Criminal Code and New Criminal Procedure Code (together with the laws for their implementation) on February 1, 2014, there are brought amendments to several pieces of legislation comprising criminal law and criminal procedure provisions. We hereby present the impact of the new codes mentioned above with respect to insolvency legislation, environmental protection legislation and on companies’ law.
Legal framework on the general associated conditions to the power supply license
On 12 February 2014, the National Regulatory Authority for Energy (“ANRE”) issued the Order no. 8/2014 for the approval of the general associated conditions of a power supply license. The ANRE Order entered into force on its publication in the Official Gazette on 18 February 2014
Before this ANRE Order had entered into force there was no legal framework for the associated conditions of a power supply license as was the case for generation licenses or setting-up authorizations. The new regulation establishes general provisions in this respect and sets forth additional conditions for the license holder in comparison with the Regulation for the issuance of authorizations and licenses in the energy sector as approved by ANRE Order no. 48/2013.
New amendments brought to the Methodological Norms of the Tax Code
On 12 February 2014, the Government amended the Methodological Norms of the Tax Code. The changes take effect from 12 February 2014, except for certain excise duties amendment which will come into effect starting 1 April 2014.
Amendments to the real estate legislation due to the entering in force of the New Romanian Criminal code
On February 1, 2014, Law no. 187/2012 for the implementation of Law no. 286/2009 regarding the Criminal Code (hereinafter the „Law”), entered into force. The Law mainly involves the implementation of the new Romanian Criminal Code of Romania, as well as the amendment of laws in various areas.
The Filling instructions for statement 100 regarding the state budget payment obligations have been amended in order to include new deadlines and declarative obligations (e.g., deadlines for the modified fiscal year, tax on natural monopole in the energy sector, tax on special constructions, etc.).
Change of procedural norms regarding unannounced inspections of the Competition Council
Further to the entry into force of the new Criminal Procedure Code, as of February 1, 2014, unannounced inspections at the headquarters of the undertakings or association of undertakings undergoing an investigation will be carried out by the Competition Council only based on the authorization of Bucharest Court of Appeal.
Regulations for the controls conducted by the Financial Supervisory Authority on legal entities and concerned individuals
The Regulation provides for the first time the complete legal framework based on which the Financial Supervisory Authority (the “Authority”) performs controls regarding the legal entities and concerned individuals who perform activities/operations subject to authorisation/approval and/or their supervision in the capital markets, insurance and private pensions sectors.
Amendments to the legal provisions regarding the fire safety authorization: the procedure has been extended to new criteria and new categories of buildings.
The new EU public procurement Directives were adopted by the European Parliament on 15 January 2014. The new rules replace Directive 2004/18/EC on public works, supply and service contracts and Directive 2004/17/EC on procurement in the water, energy, transport and postal services sectors.
The new Directives introduce a number of simplified rules and procedures.
Tax Forms: The NAFA approved the amendment of several tax forms.
Financial Services Industry: The beginning of 2014 brought a series of changes to the specific legislation in the field of financial services industry, among which the most important are:
- the direct application, as of the 1 January 2014, of the U.E. Regulation no. 575/2013 on prudential requirements for credit institutions and investment firms (the “EU Regulation 575/2013”) and the repeal, by means of the National Bank of Romania (“NBR”) Regulation no. 7/2013, of a considerable number of NBR Orders, which regulated the treatment of the credit risk, the large exposures, the supervision on consolidated basis and the minimum capital requirements and own funds of credit institutions and investment firms, all the above being regulated, as of 1 January 2014, by the EU Regulation 575/2013; and
- the entry into force of the Government’s Emergency Ordinance no. 113/2013 substantially amending the Government’s Emergency Ordinance no. 99/2006 on credit institutions and capital adequacy (“G.E.O. 99/2006”).
New versions of the following VAT forms, together with their filling in instructions, have been approved:
- The 097 form regarding the notification for the application / termination of the use of the VAT cash accounting system;
- The 394 statement, regarding the supplies and acquisitions performed on the national territory.
- The 014 Statement regarding the change of the fiscal year has been approved;
- New accounting rules - Changes and completions regarding some accounting regulations have been approved, including the introduction of 5 new accounts.