Bookkeeping
quote

REQUEST
CALL BACK

FREE CASE EVALUATION

Romania Introduces New Provisions to the Tax Code

Written by: Bridgewest

Romania-Introduces-New-Provisions-to-the-Tax-Code.jpgFrom the 1st of January 2016, Romania has introduced a new Tax Code, in which are specified important changes to excises and several taxes, such as: corporate income tax, value added tax, personal income tax, social contributions and local taxes. The new legislation has the purpose of simplifying the process of tax collection, decreasing taxes paid by both individuals and companies, and stimulating economic growth; our team of Romanian accountants can offer you an insight of the main effects of the tax modifications
 

Main modifications of the Romanian Tax Code 

 
The main modification of the Tax Code is the decrease of the value added tax (VAT), which was lowered from a rate of 24% to 20%; the VAT will further decrease from 1st of January 2017, when the applicable rate will be of 19%. According to the new legislation, Romania will apply the “predictability of taxation”, which means that any legislative changes to the Tax Code will come into effect in minimum one year after the amendments or provisions of a certain law have been introduced. 
 
The new tax code introduces provisions on the excises applied for certain categories of products. As such, the government has eliminated the excise imposed on coffee and several luxury goods and has lowered the excise rate on consumer products such as: oil, gas, wine and beer. 
 

Modifications on the corporate income tax

 
The legislation on the corporate income tax has been modified in order to incorporate several provisions of the European Directive no. 2011/96/EU, which specifies the taxation procedure on the parent company which has subsidiaries in the EU’s member states. According to the new legislation, for the dividends distributed between Romanian companies, the withholding tax will be applied at the rate of 5%, decreasing from 16%; the law will become effective from the 1st of January 2017. Our Romanian accountants can offer to you more information on this subject. 
 
If you need further information on the changes of the Romanian Tax Code, please contact our Bucharest accounting firm