On 26 November 2022 it was sent for promulgation (and is currently awaiting publication in the Official Gazette), Law no. 628 on the approval of Government Ordinance no. 16/2022 amending and supplementing Law no. 227/2015 regarding the Tax Code was published in the Official Gazette. It is in fact the normative act approving with amendments and additions Government Ordinance no. 16/2022, published in the summer of this year, which introduced a number of new rules to the Romanian tax environment. We present the main amendments introduced by Law no. 628/2022 below.
Corporate income tax
- Research and development activities eligible for the additional deduction when determining taxable income must fall under the categories of applied research and/or experimental development relevant to the activity carried out by the taxpayer.
Micro-enterprise tax
- Income derived from tax consultancy work corresponding to NACE code 6920 (‘Accounting and auditing activities; tax consultancy’) has been removed from the consultancy income category. In other words, companies which earn tax consultancy income corresponding to NACE code 6920 in excess of 20% of their total income will no longer be obliged to apply the provisions of Title II (‘Corporate income tax’) of the Tax Code, provided they comply with the remaining conditions imposed by law for the application of micro-enterprise tax.
- The provisions relating to the new threshold of EUR 500,000 will apply starting with income relating to 2023, thus avoiding any retroactive application.
- Companies in the HoReCa sector could, under certain circumstances, end up paying both micro-enterprise tax and corporate income tax from 2023.
Dividend tax
In the case of dividends distributed based on interim financial statements drawn up during 2022, the dividend tax rate is 5%, without further adjusting the tax on the dividends in question.
Income tax
- To determine the share of actual turnover derived from construction activity in total turnover, the indicator for actual turnover derived from construction activity now only includes revenue derived from construction activity carried out on Romanian territory, while the indicator for total turnover includes revenue derived from all activity carried out on Romanian territory. Previously, the total turnover indicator included revenue derived from activity carried out both on Romanian territory and outside Romania.
Obligation to own a POS terminal
- Legal additions and clarifications are introduced such that legal entities engaged in retail and wholesale trading activities, as well as those engaged in the provision of services generating cash receipts in excess of RON 50,000 a year, will be subject to the obligation to own a POS terminal. The ‘provision of services’ activity, which is missing from the published form of Government Ordinance no. 16/2022, has also been defined.
Local taxes
- Entry into force of the new provisions on local taxes provided for under Government Ordinance no. 16/2022 is postponed until 2025.
Source: Draft Law no. 628/2022 adopted by the Chamber of Deputies on the approval of Government Ordinance no. 16/2022 amending and supplementing Law no. 227/2015 regarding the Tax Code, revoking some normative acts and other financial-fiscal measures, in the form sent for promulgation on 26.11.2022
