In the Official Gazette no. 885 / 10.11.2017 Government Emergency Ordinance no. 79/2017 for amending the Fiscal Code.

Full content of tax alert can be found in this document: pdf

The Ordinance entered into force on 1 January 2018.

 

• Profit tax. Transposition of EU Directive 1164/2016 on the outsourcing of profits In the case of associated enterprises, excess interest costs will be deducted within a 200,000 Euro / tax period. The amount that exceeds this deductible ceiling will be deducted within the limit of 10% / tax period applied to a basis of calculation expressly regulated by the Ordinance.
• Introduction of exit taxation, a measure that prevents the erosion of the taxable base in the event of a transfer of assets outside Romania. Introduction of anti-abusive rule that will allow Romanian authorities to refuse taxpayers the tax benefits obtained from abusive arrangements.
• Introduce rules on foreign controlled companies (SSCs) aimed at preventing tax avoidance by diverting revenues to tax haven subsidiaries.

 

Income tax

 

• Reduce income tax to 10% from 16%.
• The tax rate on dividends remains at 5%

 

Social contributions

 

• Reducing the number of social contributions from 9 to 3
• Reduction of social contributions by 2%
• Of the total of 39.25% paid to a gross salary, 37.25% will be paid
• Transfer of contributions from employers to employees
• From gross wages, employees will owe 35% total contributions, of which: 25% social security contribution, 10% health insurance contribution
• Contributions will be calculated, retained, declared and paid by the employer
• Employers will owe a 2.25%

 

Income tax of micro-enterprises

 

• Increasing the ceiling for the category of micro-enterprises, from 500,000 euro to 1 million euro
• Incorporation into this tax system of all taxpayers who carry out the activities currently exempted, including those who receive income from management and consultancy