2010 - Austerity Laws Entered in Force. Are Companies Ready to Take Action?
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Iulie 2010 |
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BAKER TILLY KLITOU AND PARTNERS SRL |
Adresa
Splaiul Independentei, Nr. 52
Bucuresti, Sector 5
Telefon
+40-21-315.61.00
Fax
+40-21-315.61.02
Website
www.bakertillyklitou.ro
In the following article we will try to present the latest fiscal amendments to the fiscal legislation adopted in Romania in June 2010 and concentrate in this respect on the tax legislation changes that could have a major impact on companies' businesses.
Also, the intention of this article is to provide you with an overview of the current fiscal changes recently implemented in 2010 in the context of the public financial deficit in Romania and the negotiations between the International Monetary Fund and the Romanian government.
One of the most important fiscal changes in 2010: VAT rate increase to 24%
On June 26th, 2010 Prime Minister Emil Boc confirmed that the government has decided to raise the VAT rate to 24% from 19% and to leave the reduced VAT rates unchanged.
The measure of increasing the VAT by 5% was taken in order to reduce the public deficit from 7.2% of output to 6.8% in 2010 and obtain the IMF loan disbursement. The Prime Minister mentioned that under these conditions of increasing the VAT rate, the agreement with IMF will continue.
This measure has entered into force on July 1st, 2010 and in accordance with the Finance Ministry it should ensure between RON 3.5 bn to RON 4 bn extra revenues to the State Budget in 2010 (EUR 820 mn to EUR 940 mn).
The increase of the VAT comes after the government's plan to cut pensions by 15% has been declared unconstitutional in the court on June 25th, 2010 and consequently leading to the risk that the International Monetary Fund could postpone the unlocking of a new instalment, from the loan grated to Romania which was due on June 29th, 2010.
After implementation of these changes, Romania has joined the group of states formed from UK, Greece, Portugal, Spain and the Czech Republic in adopting a VAT increase with the purpose of reducing the state deficits.
In consequence, the Emergency Ordinance no. 58/2010 has been published in the Official Gazette 431/28 June 2010 and provides that beginning with July 1st, 2010, the standard VAT rate is of 24% and applies to the taxable base for taxable operations which are not VAT exempt or for which the reduced rates are not applicable.
The only exception applicable in this case for which the applied VAT rate will be the one in force at the date of the VAT chargeability will be for the issuance of invoices or cashing of advances before the occurrence of the chargeable event. For these situations, a regularisation should be made with the VAT rate applicable at the date of delivery of goods or provision of services.
New “Registry of intra-community transactions” as anti tax evasion measure to enter in force on August 1st, 2010
According to the Emergency Ordinance no. 54/2010 regarding some measures against tax evasion published in the Official Gazette no. 421 / 23 June 2010, starting with August 1st, 2010 a "Registry of intra-community operators" will be set up, comprising all taxable persons and non-taxable legal persons carrying-out intra-community transactions as follows: intra-community supplies or acquisitions of goods, supplies or acquisitions of intra-community services.
The persons registered for VAT purposes or the ones which request the registration are also required to request the registration within the Registry of intra-community operators, if they intend to carry out intra-community transactions.
Separately, simplification measures (reverse-charge) will be applicable for the supply of certain categories of goods: cereals, technical plants, legumes, fruits, meat, sugar, bread and bread products. The simplification measures will be applicable in 10 days following the approval for such derogation from the European Union Council and will be valid until December 31st, 2011.
At this moment, Romania is not the only Member State implementing the measure of registering the tax payers performing intra-community operations, as it can be also found in Spain, implemented however without having the expected results.
Even the European Commission had a word to say by recommending a better cooperation between the Member States instead of re-registering all the taxpayers that are valid in the VIES system.
Considering the tight deadlines for registering as an intra-community operator – until August 1st, 2010, we advise companies that have natural entities as shareholders to request the criminal records for their Romanian and foreign shareholders from the competent Romanian authorities.
Our firm can assist you with registering your company as Intra-community Operator by providing you with the information about the needed documentation, assisting you in obtaining the criminal record for the shareholders (natural entities), filling in the requested forms and further submitting the files to the tax authorities.
In this respect, we kindly ask you to refer to the e-mail addresses mentioned at the end of this article.
Other measures against tax evasion entering in force on July 1st, 2010
The same emergency ordinance mentioned above provides the level of the minimum excise duty payable in case of cigarettes, and also the excise duty payable in case of intermediate beverages.
For cigarettes, the payable excise is equal with the sum between the specific excise and the ad valorem excise, but no less than 96% from the total excise for cigarettes, which represents the minimum excise. When the sum between the specific excise and the ad valorem excise is lower than the minimum excise, the minimum excise will be paid.
In addition to the above, excise duty for products related to "Fermented beverages, other than beer and wines, subcategory still beverages" has been introduced and is in value of 100 EUR/hl of product.In the amendments to the law 241/1995 for tax evasion it has also been introduced the fact that the refusal of a person to present to competent authorities in 15 days from the receiving of summon the legal documents and goods owned, represents a criminal offence and is sanctioned by imprisonment from 6 months to 3 years or with fine.
Also, illegal possession of counterfeit documents with special regime (e.g. bands, stamps, special regime standard forms) is deemed a criminal offence and is sanctioned by imprisonment between 2 and 7 years or between 3 and 12 years (if made deliberately) or by a fine.
