EY ROMANIA

  |  17.08.2016

Legislative summary

Corporate income tax - Approval of the Norms regarding the deductions for research-development expenses

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(Order of the Minister of Public Finances and of Minister of National Education and Scientific Research no. 1056 / 4435 of 5 July 2016, Official Gazette no. 526 / 13 July 2016)

Please refer to Tax Alert no. 23 / 2016 for more details.

Income Tax


Procedural aspects related to reporting and payment of tax on income derived from the transfer of immovable properties from personal patrimony


(Order no. 1.022 / 2.562, Official Gazette no. 524 / 12 July 2016)

 

The Order approves the procedure for reporting, paying and amending the tax on income earned by individuals from the transfer of immovable properties from their personal patrimony, as well as the format and content of related forms (i.e., Form 208, Form 209, Form 253, Form 254). For the cases where the transfer of the ownership right or its dismemberments is realized via other procedure than the notary or the court proceedings, the Form 209 should be filed by the individuals earning the income.

A separate form should be filed for each transfer if the individual is deriving income from the transfer of several immovable properties.


Tax residence in case of individuals

(Order no. 1099 / 2016, Official Gazette no. 577 / 29 July 2016)

 

Among the key aspects, we mention:

 

- Clarifications on partial Romanian tax residence: if an individual arrives to Romania during a tax year, he/she will become subject to taxation on his/her worldwide income as of the moment of being assessed as a Romanian tax resident; he/she will be deemed as non-tax resident in Romania and will be subject to Romanian source income only for the period starting his/her arrival untill the moment of being assessed as tax resident in Romania; - The respective individuals, assessed as Romanian tax residents, who leave Romania for more than 183 days in any twelve consecutive months, shall be deemed as non-residents in Romania from the moment of their departure without being liable to make proof of the change of their tax residence; - The Romanian tax residents, who have their domicile in Romania, shall be deemed as Romanian tax residents, taxable on their worldwide income in Romania, till the change of their tax residence. Thus, in practice this should eliminate the cases when the tax offices does not accept the change in the tax residency for the previous periods;


- Permanent home available to an individual (an important criteria for assessing the tax residence) shall be deemed to be any place permanently available to him/her and/or family members (either owned or rented). Thus, we are of the view that the Order clarifies also the case when certain tax offices did not consider as being permanent home the places rented by a third party for an individual.


- The Order updates the content of the Tax Residence Questionnaires due upon arrival/departure to/from Romania, as well as the Notifications issued by the tax authorities (e.g., the notifications shall indicate the moment since when the individual is assessed as a Romanian tax or non-tax resident).


VAT


Application of the VAT exemption in relation to supplies of vessels intended for navigation on the high seas and supplies of goods/services for the direct needs of such vessels


(Order of Minister of Public Finance no. 1058 / 2016, Official Gazette no. 529 / 14 July 2016)


The Order brings amendments inter-alia regarding the Instructions for applying the VAT exemption in relation to supplies of vessels intented for navigation on the high seas and supplies of goods/services for the direct needs of vessels intented for navigation on the high seas and supplies of goods/services for the direct needs of vessels. The main amendments are:


 The term ‘shipowner’ is replaced by ‘owner/operator of ships’;
 In order to fulfill the condition that the vessel is effectively and predominantly used for navigation on the high seas, the period between the date the vessel was acquired and the date of supply of the vessel / supply of goods/services for the direct need of the vessel should be considered for at most 5 years prior to the date of supply of the vessel / supply of goods/services for the direct need of the vessel;
 In case of supplies of new vessels, it is no longer needed to have a sworn statement from the buyer that the vessel will be effectively and predominantly used for navigation on the high seas;

 

The VAT exemption related to the supplies of fuel and food provided under art. 294, par. (1), letter h), pt. 2 of the Tax Code is applied also for the case where other intermediaries intervene in the supply, provided that at the moment of the supply, the final destination of the goods is known and the transfer of property of the respective goods to these intermediaries occurred, at the earliest, at the same time with the moment when the operators of the ship were entitled to actually dispose of these goods (as the Justice Court of the European Union has decide in Cause C-526/13 ‘Fast Bunkering Klaipeda’ UAB).

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