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Romania is the second Country in EU by October’s retail trade growth.

In October 2016, the volume of Romania’s retail trade increased by 8.7 percent in October 2016 compared to October 2015.

In this way, Romania became second only to Luxembourg in the EU ranking by retail trade growth according to the European Statistical Office (Eurostat).
In the EU28, the 3.5 percent increase in the retail trade volume is due to the 4.9 percent rise in sales of non-food products, the 2.5 percent growth is sales of food, drinks and tobacco, and of the 1.7 percent advance in for automotive fuel sales.
The highest monthly increases in the total retail trade volume in Europe were registered in Slovenia (+3.7 percent), Luxembourg (+2.9 percent), Germany (+2.4 percent) and the United Kingdom (+2.0 percent).
Romania’s National Institute of Statistics announced that compared to the previous month October’s retail turnover (except for trade in motor vehicles and motorcycles) was up 7.9 percent as raw series, and 10% expressed as workday and seasonally adjusted series.
Source: Agerpres


The amendments of the Fiscal Code in Romania

Alessandro_PasutIn the framework of amendments to the Fiscal Code, the types of services rendered abroad that are subject to a 16% tax rate have been expanded. They comprise management services, consulting services, marketing services, technical assistance services, research and design services, advertising and publicity services, and services rendered by lawyers, engineers, architects, notaries, accountants and auditors.

Clarifications have been introduced concerning the fiscal residency certificate of non-residents who are beneficiaries of income derived from Romania. As a consequence this document qualifies as authentic also when issued in an electronic format or online by the competent authority in the foreign state.

Further clarifications have been introduced regarding the taxable base and related VAT for supplies of goods or services performed between related parties that have limited deduction right, as well as regarding the taxable base for fixed assets.

The market value for supplies of goods and services performed between related parties is determined based on the same methods used to determine the market value for transfer pricing, when a comparable transaction can be identified.


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Romania: about the VAT

Alessandro PasutTaxable persons that have been de-registered for VAT purposes for not submitting the VAT returns for a period of six months or two consecutive calendar quarters may re-register for VAT purposes at any time, provided that they present the returns not submitted within the legal deadlines with a statement in which they undertake to file their future returns within the legal deadlines. If the supplier’s VAT code is cancelled, the beneficiary cannot deduct the input VAT starting the day following that on which the cancellation is performed in the Register of taxable persons. Taxable persons whose VAT code was erroneously cancelled by default are still regarded as taxable persons for VAT purposes, with the right to deduct input VAT. Persons erroneously registered for VAT purposes by the tax authorities are not obliged to invoice with VAT. In such circumstances, however, those persons have the obligation to pay the tax and their beneficiaries have the right to deduct the input VAT.

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Romania: VAT measures

Alessandro PasutAn amendment to the Fiscal Code was recently published with some measures regarding VAT. Beneficiaries purchasing goods/services from inactive taxpayers or from other taxable persons that have been de-registered for VAT purposes may deduct the VAT corresponding to these services for goods purchased under an enforcement procedure and for goods / services purchased from suppliers in bankruptcy proceedings under Law 85/2006. Taxable persons who do not have a valid VAT code can deduct the VAT on acquisition of goods and/or services for transactions to be made after their registration. The VAT deduction is performed in the first VAT return after the taxable person’s registration for VAT purposes. For companies established according to Law 31/1990, the registration for VAT purposes is cancelled if the main shareholders have or, if the case, the sole shareholder has criminal offenses in their fiscal record.


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Romania: new insolvency code

Alessandro PasutThe new Insolvency Code will be applicable also to ongoing procedures. Its adoption under an emergency procedure stressed the need to improve the efficiency of insolvency procedures and secure a balance between creditors’ and debtors’ interests. A major change to previous rules aiming at shortening the procedure is the reduction of the term for carrying out the reorganization plan from three to one year, with the possibility to extend it for just one other year as from the date of confirmation of the insolvency procedure. Pursuant to the new rules creditors – and, in particular, tax authorities – will now have the possibility to initiate enforcement actions during insolvency procedures if debtors fail to pay, within 90 days after maturity, a debt arising after insolvency procedures have been opened.


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Romania: construction tax


Alessandro PasutConstruction tax: a new tax on constructions other than buildings will be introduced. Persons liable to pay construction tax are Romanian legal entities, permanent establishments of foreign legal entities and legal entities set up in Romania according to the European legislation.

Constructions subject to construction tax are those included in the group 1 of the Catalogue regarding classification and normal useful lives of fixed assets. The tax is computed by applying a 1.5% rate to the value of the constructions as of 31 December of the previous year, recorded in the accounting books.

Construction tax has to be computed and declared to the tax authorities up to 25 May of the year for which such tax is due, and paid in two equal installments, up to 25 May and 25 September of the respective year.

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Romania: corporate income tax

Alessandro PasutCorporate income tax exemption is not granted for income derived from the sale / transfer of participation titles held in a Romanian legal entity, according to the law, by a legal entity tax resident in a country which does not have a double tax treaty with Romania.

The provisions of the European Union legislation regarding withholding tax are also applicable for payments between Romania and countries which have agreements in place with the European Union that provide measures similar to those provisions.

Under the new regulations, in cases where a payer withholds more tax than is actually due, as a rule, the amounts are refunded by the payer, at the taxpayer’s request submitted within the prescription term.

The payer of the income is not obliged to submit a rectifying return further to the refund of the withholding tax. The payer of the income may off-set the reimbursed amounts with other tax liabilities of the same type.

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Romania: Fiscal Code

Alessandro Pasut

Romania: Fiscal Code

The provisions of the amendments to the Fiscal Code apply if the taxpayer holds for an uninterrupted period of 1 year at least 10% of the share capital of the legal entity distributing the dividends or of the legal entity in which the shares sold/assigned are held or, respectively, of the legal entity which is subject to liquidation.

The uninterrupted holding period for the exemption of dividend income derived by Romanian legal entities/permanent establishments in Romania of foreign legal entities from Member States, parent companies, and from their subsidiaries located in another Member States is reduced from 2 years to 1 year.

Dividend income derived by a Romanian legal entity from another Romanian legal entity is tax exempt if the recipient holds at least 10% of the share capital of the entity distributing the dividends for an uninterrupted period of at least 1 year, while previously, there were no holding period requirements in this case.

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Romania: Corporate Income Tax

Alessandro PasutRomania

Corporate Income Tax. Expenses resulting from the adjustment due to the difference between the nominal value and the acquisition cost of  previously acquired receivables are considered deductible.
The amendments to the Norms detail the supporting documents that need to be provided by a Romanian company to benefit from corporate income tax exemption for dividends received from a foreign company.


The amendments to the Norms bring various clarifications with respect to the declaration and payment of corporate income tax due by foreign companies for income from immovable property located in Romania and the sale of shares held in Romanian companies, corporate income tax due by taxpayers opting for a fiscal year different from the calendar year, micro-enterprise income tax due by taxpayers that cease to exist.


Certain changes are aimed at aligning the Norms with the Fiscal code, such as the application of the micro-enterprise regime for taxpayers deriving income from management and consultancy, the types of income included in the taxable base for micro-enterprise regime, the  minimum holding period required to benefit from dividend corporate income tax / withholding tax exemption.

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Coindu open a new factory in Romania

The portuguese company Coindu that produces textiles for the audio industry is planning to open a new factory in Drobeta Turnu Severin, according to local authorities and is about to start a hiring campaign.
What will be a €10 million investment is expected according to company officials to create 1,200 new jobs, bringing the total number of employees Coindu has in the country to 2,200. The currently owns a factory in Curtici, in Arad county.
Coindu Romania SRL plans to hire 450 employees in 2014 with the prospect of hiring another 800 in 2015, according to what Drobeta Turnu Severin’s deputy mayor, Marius Screciu, quoted as saying to Agerpres newswire.
The factory will be built on a 4.5 hectare area the company has bought in Drobeta Turnu Severin and is expected to cost €10 million, with the municipality agreeing to provide utilities for the new industrial platform.

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