Legislative news October 2023

I. GOVERNMENT ORDER NO. 2.654/1.925/2023 OF THE MINISTRY OF FINANCE AND THE MINISTRY OF LABOR AND SOLIDARITY SOCIAL REGARDING THE ESTABLISHMENT OF THE VALUE OF THE INDEXED MONTHLY AMOUNT THAT IS GRANTED IN THE FORM OF NURSERY VOUCHERS FOR THE SECOND SEMESTER OF 2023

Published in the Official Gazette No. 881/29.09.2023

Updates the value of the monthly amount that is granted in the form of nursery vouchers at the rate of RON 620, for the second semester of 2023, starting from October 2023.

The  value also applies to February and March 2024.

II. Government Decision no. 937/2023 Amending Annex No. 1 to Government Decision no. 33/2018 on the Establishment of Offenses Falling Under the Prevention Law No. 270/2017, as well as the Model Remediation Plan and the Amendment and Completion of Certain Normative Acts

Published in the Official Gazette no. 904/06.09.2023

The main provisions that will come into effect on November 5, 2023:
In certain cases, the Prevention Law may no longer be applicable, and tax authorities can proceed directly to impose fines without prior warnings. Example: offenses related to the violation of provisions from:

  •  Government Emergency Ordinance nr. 193/2002 on the introduction of modern payment systems (e.g., failure to install payment terminals – POS             devices)
  • Government Emergency Ordinance nr. 28/1999 on the obligation of economic operators to use electronic fiscal cash registers, such as:
    • Issuing a fiscal receipt containing wrong data
    • Failure to hand over the fiscal receipt by the electronic fiscal cash register operator.
  • Fiscal Procedure Code and Tax Code, such as:
    • Failure to submit registration, deregistration, or amendment declarations within the legal deadlines,
    • Non-compliance by the taxpayer/obligor with the obligations to prepare the transfer pricing file,
    • Failure of the individual undergoing personal fiscal situation review to submit the wealth and income declaration,
    • Failure to submit, within the legal deadlines, the Questionnaire for determining the tax residence of a natural person upon arrival in                        Romania or upon departure from Romania, by individuals obliged under the Tax Code,
    • Failure to submit the VAT returns within the legal deadlines,
    • Submission of incorrect or incomplete summary declarations.
      There are amendments regarding the regime of contraventions in terms of the Implementation Regulation of the Customs Code of Romania:
  • It constitutes an offense and is penalized with a fine ranging from RON 8.000 to RON 25.000:
    • The evasion from customs control of any goods or merchandise subject to customs supervision; in this case, the goods or merchandise are confiscated. In the case where the offense mentioned above concerns excisable products, the offense is penalized with a fine ranging from RON 10.000 to RON 30.000.
    • The unloading from ships, loading onto ships, or transshipment of goods or merchandise subject to customs duties without customs permit or without the consent of the customs authority; in this case, the quantity of goods or merchandise loaded, unloaded, or transshipped is confiscated.
  • New offenses are introduced in the realm of contraventions:
    • The failure of the transporter or handler of non-cleared goods to ensure the integrity of seals or markings, except in cases of fortuity or force majeure;
    • The submission of a customs declaration containing erroneous data regarding the tariff classification of goods or merchandise, if it influences the determination of import duties and other legally due charges collected by the customs authority upon the release of goods into free circulation.

III. ORDER NO. 2649/2023 OF THE MINISTRY OF FINANCE REGARDING THE AMENDMENT AND COMPLETION OF CERTAIN ACCOUNTING REGULATIONS

Published in the Official Gazette No. 903/06 .10.2023

Thus, through the new Order, the chart of accounts applicable to various categories of entities is supplemented with certain expense-related accounts, namely the accounts:

  • 6121 „ Royalty expenses”,
  • 6122 „ Expenditure on management rentals”,
  • 6123 „ Rent expenses”,
  • 616 „ Expenditure on intellectual property rights”,
  • 617 „ Management expenses”
  • 618 „Consultancy expenses”.

The Order also includes several provisions regarding the correlation of certain accounting regulations. Thus, concerning the accounting regulations approved by the Order of the Minister of Public Finance No. 1.802/2014, the following should be taken into consideration:

  • The removal of provisions related to classifying greenhouse gas emission certificates and green certificates as financial fixed assets, as their accounting treatment is determined by specific legislation,
  • Reformulation of the provisions regarding assets of public property received under management, concession, or lease, considering the categories of entities that can manage such assets.

Regarding the accounting regulations approved by the Order of the Minister of Public Finance No. 3.103/2017, this regulatory act published in the Official Gazette addresses the following:

  • Updating the function of account 105 „Revaluation Reserves”, based on the fact that the revaluation of tangible fixed assets is an example of an accounting policy applied by the entity and not imposed by law,
  • Introduction of provisions regarding the commencement and interruption of capitalizing borrowing costs related to long production cycle assets, considering that the criteria for recognition in accounting of these assets are similar to those included in the accounting regulations approved by the Order of the Minister of Public Finance No. 1.802/2014.

IV. ORDER NO. 2.540/3.542/2023 OF THE MINISTRY OF FINANCE AND THE MINISTRY OF CULTURE FOR
ESTABLISHING THE VALUE OF THE INDEXED AMOUNT THAT IS GRANTED IN THE FORM OF CULTURAL VOUCHERS FOR THE SECOND SEMESTER OF 2023

Published in the Official Gazette no. 899/05.10.2023

It updates the value of the amount that is granted monthly, respectively occasionally, in the form of cultural vouchers, for the second semester of 2023. Their new value is a maximum of RON 210/month, respectively a maximum of RON 420/event.

The value also applies to February and March 2024.

V. GOVERMENT DECISION NO.970/2023 FOR THE APPROVAL OF THE METHODOLOGY REGARDING THE PREVENTION AND COMBATING HARASSMENT BASED ON SEX, AS WELL AS MORAL HARASSMENT AT WORK.

Published in the Official Gazette No. 939/17.10.2023

Approves the Methodology on preventing and combating harassment based on sex, as well as moral harassment at work.

Employers must promote the following measures:

  • Ensures the preparation of an internal procedure regarding the promotion, including the occupation of decision-making positions, of the positions in the administrative and supervisory boards of private companies,
  • Designate by administrative act a responsible person/constitute a commission for receiving and resolving complaints/reports,
  • Introduces the provisions of Government Ordinance no. 137/2000 on the prevention and sanctioning of all forms of discrimination, republished, with subsequent amendments and additions, and of Law no. 202/2002 on equal opportunities and treatment between women and men, republished, with subsequent amendments and additions, in the Internal Regulations,
  • Ensures the establishment of the case reporting register where the complaints/reports will be registered; the register will contain registration number, phase of harassment, identified solutions.

The complaint/notification can be formulated by the injured person in written form, both holographic and electronic, but must be signed by the victim, respecting the protection of identity data, in order to ensure its protection) or verbally (discussion with the responsible persons , after which a report will be drawn up).

VI. LAW NO. 296/2023 REGARDING SOME FISCAL-BUDGETARY MEASURES TO ENSURE ROMANIA’S LONG-TERM FINANCIAL SUSTAINABILITY

Published in the Official Gazette No. 977/27.10.2023

The main changes are the following:

  1. The income tax and social contributions

Starting from 01.11.2023:

  • The ceiling of RON 10,000 representing monthly gross income is introduced, up to which the tax exemption is applied for employees in the IT field, who benefit from tax facilities. The exemption applies only to the basic function, until December 31st, 2028.
  • The social insurance contribution rate will be reduced by the percentage points corresponding to the contribution rate to the privately managed pension fund – 75%, for employees in the IT field and benefiting from fiscal facilities.

Employees can opt for the payment of the contribution owed to the privately managed pension fund, through a written request, submitted to the employer.

  • Exemption from the payment of the social security contribution and the preferential rate of insurance contribution for work, for employees who work in the field of construction and agriculture/food industry, are eliminated.

Starting from 01.01.2024:

  • The annual basis for calculating the social health insurance contribution owed by individuals who obtain income from self-employed activities will be equal to the net annual realized/gross income or the annual income norm, but not more than the level of 60 gross minimum wages on the country in force at the deadline for submitting the tax return on estimated income. At the same time, the annual basis for calculating the social health insurance contribution for the above taxpayers cannot be less than 6 minimum wages per economy, except for those who obtain income from annual wages of more than 6 minimum wages per economy or other types of income for which the contribution of more than 6 minimum wages per economy is due.
  • Meal and vacation vouchers will be included in the income category subject to the social health insurance contribution.

2. The corporate income tax

2.1 Minimum tax on turnover

Starting from January 1st, 2024, the minimum tax on turnover will be introduced for taxpayers that register a turnover of more than 50 million euros in the previous year and that determine a corporate income tax in the current year, accumulated from the beginning of the fiscal year until the end of the quarter / year, is lower than the minimum tax on turnover (with the exception of credit institutions and legal entities carrying out activities in the oil and natural gas sectors, for which other regulations are introduced, detailed below). These taxpayers will be obliged to pay the corporate income tax at the level of the minimum tax on turnover.

The minimum tax on turnover is also determined if, at the end of the quarter/year, taxpayers register a tax loss in the current year or a taxable profit in the current year, before the recovery of tax losses carried forward from previous periods.

If, after applying the calculation formula for determining the minimum tax, the result is negative, the minimum tax is zero.

No minimum tax is owed by the economic operators that carry out exclusively activities of distribution/supply/transport of electricity and natural gas and which are regulated/licensed by the National Energy Regulatory Authority.

2.2 Supplementary tax for credit institutions – Romanian legal entities and Romanian branches of credit institutions – foreign legal entities

For credit institutions – Romanian legal entities and Romanian branches of credit institutions – foreign legal entities, in addition to the corporate income tax, it is introduced a turnover tax calculated by applying the following tax rates to the turnover:

  • 2% in the period 2024 – 2025,
  • 1% from 2026.

The turnover tax is calculated, declared and paid quarterly as follows:

  •  for the first three quarters, until 25th of the month following the quarter for which the payment is done,
  •  for the last quarter, until March 25th inclusively of the following year.

2.3 Supplementary tax for legal entities carrying activity in the oil and natural gas sectors

Starting with January 1st, 2024, a specific is introduced, additional to the corporate income tax, for legal entities that carry out activities in the oil and natural gas sectors and that register a turnover of more than 50 million euro in the previous year.
The specific turnover tax is calculated declared and paid quarterly as follows:

  • for the first three quarters, until 25th of the month following the quarter for which the payment is done,
  • for the last quarter, until the date of submission of the annual corporate tax return Form 101.

Taxpayers that carry out exclusively activities of distribution/supply/transport of electricity and natural gas and who are regulated/licensed by the National Energy Regulatory Authority do not owe this specific tax. The specific tax for the oil and natural gas sector is applied for the period January 1st, 2024-December 31st, 2025, and for taxpayers with a different fiscal year for the period between the modified fiscal year that begins in 2024 and the modified fiscal year that ends in the year 2026.

3. The micro-enterprises income tax

Starting with January 1st, 2024, the tax rate is changed, as follows:

  • 1% for micro-enterprises that book revenues not higher than 60,000 Euro and that do not carry out the activities mentioned below (for which the 3% tax rate applies);
  • 3% for micro-enterprises that:
    • obtain revenues over 60,000 euro; or
    • carry out activities, main or secondary, corresponding to the NACE codes: 5821 – Computer game publishing activities, 5829 – Other software product publishing activities, 6201 – Computer programming activities (customer-oriented software), 6209 – Other information technology service activities, 5510 – Hotels and other similar accommodation facilities, 5520 – Holiday and short-stay accommodation facilities, 5530 – Camping grounds, recreational vehicle parks and trailer parks, 5590 – Other accommodation services, 5610 – Restaurants, 5621 – Food activities (catering) for events, 5629 – Other food services activities, 5630 – Bars and other beverage serving activities, 6910 – Legal activities – only for companies with legal personality that are not fiscally transparent entities, constituted by lawyers according to the law, 8621 – General medical practice activities, 8622 – Specialized medical assistance activities, 8623 – Dental assistance activities, 8690 – Other activities related to human health.”

If during the fiscal year, the revenues booked by a micro-enterprise exceed the level of 60,000 euro or the micro-enterprise begins to carry out the                      activities corresponding to NACE codes provided above, the tax rate of 3% is applicable starting with the quarter in which such situations appear.

4. The value added tax

Changes starting January 1st, 2024:

  •  Clarifications regarding the level of finishes required in the case of homes that, at the time of delivery, can be lived in as such, are brought in order to apply the reduced rate of 5%.
  • Increases to the VAT rate from 9% to 19% for:
    • delivery of non-alcoholic beer;
    • foods with added sugar, whose total sugar content is at least 10 g/100 g of the product, other than sweetbread and biscuits.
  • Increases to the VAT rate from 5% to 9% for:
    • the delivery of high-quality food, namely mountain, eco, traditional products;
    • the delivery of housing as part of the social policy, including the land on which they are built (housing with a useful surface of a maximum of 120 square meters, excluding household annexes, the value of which, including the land on which they are built, does not exceed the amount of RON 600,000, excluding the value added tax). The reduced rate applies only to houses that, at the time of delivery, can be lived in as such,
    • delivery and installation of photovoltaic panels, solar thermal panels, heat pumps and other high-efficiency, low-emission heating systems, including installation kits, as well as all necessary components purchased separately, for central or local public administration buildings, the buildings of institutions under their coordination/subordination, with the exception of companies,
    • the delivery and installation of components for the repair and/or expansion of the systems mentioned above,
    • the delivery of systems as a component part of construction deliveries, as well as the delivery and installation of the systems provided for in the same letters, as extra options when delivering a construction,
    • access to fairs, amusement parks and recreational parks whose activities are included in CAEN codes 9321 and 9329, fairs, exhibitions, cinemas, and cultural events, other than tax-exempt ones,
    • allowing access to sports events.
  • Increases to the VAT rate from 5% to 19% for:
    • the right to use sports facilities whose activities are included in CAEN codes 9311 and 9313, other than the exempt ones,
    • the transport of people by trains or historic vehicles with steam traction on narrow lines for touristic or leisure purposes,
    • the transport of people using the cable transport facilities – cable car, aerial lift, ski lift – for tourist or leisure purposes,
    • transporting people with animal-drawn vehicles, used for tourist or leisure purposes,
    • transporting people with boats used for tourist or leisure purpose.
  • VAT exemption for construction services, rehabilitation, modernization of hospital units in the public state network, deliveries of medical equipment, devices, accessories and protective equipment, materials and consumables for sanitary use, as well as for adaptation, the repair, rental and leasing of such goods is applicable only when these operations are carried out to non-profit entities registered in the Public Registry organized by ANAF and are intended for hospital units owned and operated by the non-profit entity or those in the state public network.
    • Transitional measures for housing deliveries for which contracts were concluded until December 31st, 2023, and which will be delivered between January 1 and December 31, 2024, are established in order to apply the reduced VAT rate of 5% or 9%.

5. The excise duties

Changes starting January 1st, 2024:

  • Clarifications and extensions are brought regarding the unharmonized excise duties due in the case of products containing tobacco, intended for inhalation without burning and in the case of certain liquids with or without nicotine, intended for inhalation without burning,
  • Unharmonized excise duties are introduced for non-alcoholic drinks with added sugar for which the total sugar level is over 5 g/100 ml.
  • New contraventions are introduced in the field of excisable products and the amounts of contravention fines are increased for non-compliance with the legislation in the field.

6. Special tax on high value movable and immovable goods

Starting from January 1st, 2024, the special tax on high-value goods will be introduced for the following categories of taxpayers:

  • Individuals who, as of December 31st of the previous fiscal year, own residential buildings in Romania solely or under joint ownership, whose taxable value exceeds RON 2.500.000 . The tax is computed as 0.3% applied to the difference between the taxable value of the building communicated by the local fiscal authority through tax decision and the threshold of RON 2.500.000,
  •  individuals/legal entities that own vehicles registered in Romania and whose purchase value exceeds RON 375.000. The special tax is computed as 0.3% applied to the difference between the purchase value and the threshold of RON 375.000 and is due for a period of 5 years from the date of registration of the vehicle or for the fraction of time until the completion of the 5-year period.
    Deadlines for submission of the tax return and payment of tax:
  •  April 30th of the current fiscal year, for owners of residential buildings,
  • December 31st of the current fiscal year, for vehicle owners.

7. December 31st of the current fiscal year, for vehicle owners

Starting from January 1st, 2024, the RO e-Invoice system will become mandatory for:

  •  taxable persons established in Romania, regardless of whether or not they are registered for VAT purposes, for the supplies of goods and the provision of services that take place in Romania, carried out in the B2B relationship,
  • taxable persons established in Romania, regardless of whether or not they are registered for VAT purposes, for the supply of goods and the provision of services that take place in Romania, carried out in relation to public institutions, as defined in art. 5 lit. w) from the Government Emergency Ordinance no. 57/2019 regarding the Administrative Code, others than those carried out in the B2C relationship,
  • non-established taxable persons, but registered for VAT purposes in Romania, for the supply of goods and the provision of services that take place in Romania, carried out in the B2B relationship.

Exports and intra-Community deliveries are excluded.
The deadline for submitting invoices in the RO e-Invoice national electronic system is 5 working days from the invoice issuance date, but no later than 5 working days from the deadline provided in the Fiscal Code for issuing the invoice.
The following fines are provided for non-compliance with the use of the e-Invoice system:

  • RON 5.000 – RON 10.000 for large taxpayers,
  • RON 2.500 – RON 5.000 for medium taxpayers,
  • RON 1.000 –RON 2.500 for other legal entities, as well as for individuals.

During January 2024 – March 2024, the sanctions for non-compliance with the obligation to use the e-Invoice system are not applied.
Starting from July 1st, 2024, between taxable persons established in Romania, for the supplies of goods and the provision of taxable services in Romania, carried out in the B2B relationship, only invoices sent through the RO e-Invoice system are considered invoices.
The receiving and registration by the recipient – taxable person established in Romania according to an invoice issued by economic operators established in Romania, in the B2B relationship, in a way other than RO e-Invoice, constitutes a contravention and is sanctioned with a fine equal to the amount of VAT in the invoice.
8. Changes to Law no. 70/2015 – the new thresholds starting from 11.11.2023 for cash collection and cash payment operations

Law 70/2015 has been amended so that within 15 days of publication in the Official Gazette of Romania, the new ceilings on cash collection and payment operations become applicable, as follows:

Fragmented cash receipts and payments for the above operations, with a value greater than the mentioned threshold, is prohibited.
Cash amounts in the cash register cannot exceed, at the end of each day, the threshold of RON 50,000 (currently there is no threshold for the cash register balance). Cash amounts that exceed the threshold are deposited into the bank accounts of these persons within two working days.
As an exception, it is allowed to exceed this threshold only with the amounts related to the payment of salaries and of other personnel rights, as well as other operations with individuals, for a period of 3 working days from the date provided for their payment.
Failure to comply with the above-mentioned provisions constitutes contraventions, if they were not committed under such conditions that, according to the criminal law, constitute crimes, and are sanctioned with a fine of 25% of the amount collected/paid (currently 10%), respectively held in the cash register, which exceeds the threshold established for each type of operation, but not less than RON 500 (currently RON 100).

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