Fiscal Code and Norms

The main amendments include:
- a micro enterprise deriving more than 50 percent of its income from management and consultancy services becomes profits tax payer from the beginning of the year when the threshold is exceeded;
- new level of the special tax for cars and commercial vehicles having a maximum allowed weight higher than 3.5 tons is established;
- cars and vehicles belonging to diplomatic missions, consular offices and to other organisations and persons with a diplomatic status are exempt from special tax.

The Emergency Ordinance enters into force on 1 January 2007.

Methodological Norms for the application of the Fiscal Code
(Government Decision 1.861/2006 published in Official Gazette 1.044/29 December 2006)

Please refer to our Tax Alert No. 1 dated 4 January 2007.

FISCAL PROCEDURE

Fiscal Procedure Code - amendments
(Law 505/2006 published in Official Gazette 1.054/30 December 2006)

The amendments refer inter alia to:
- term for issuance of the Advance Pricing Agreement i.e., 12 months for the unilateral agreements and 18 months for the bilateral/multilateral agreements;
- priority of the fiscal debts settlement;
- registration of multiple permanent establishments for a foreign entity;
- procedural aspects related to the tendering upon forced execution.

Registration of economic operators performing intra-Community acquisitions of excisable products after 1 January 2007
(Order 2.135/2006 published in Official Gazette 1.029/27 December 2006)

Economic operators that acquire excisable products from EU tax warehouses or economic operators after 1 January 2007 have to be authorised as registered operators. The Order provides for the authorisation procedure and the documents to be submitted in this respect.

The respective economic operators need to comply with the conditions provided at Art. 1851or Art. 209 of the Fiscal Code the latest by Mach 1 2007, i.e.: 
- to guarantee the payment of excise duties; 
- to keep the accounting of excisable goods delivered; 
- to present the excisable goods when required by the authorities;
- to accept any control of inventories.

Organization of the administration activity of non-resident taxpayers that do not have a permanent establishment within the Romanian territory
(Order 2.157/2006 published in Official Gazette 1.053/29 December 2006)

The administration of foreign taxpayers having payment/declaration liabilities in Romania will be performed as follows: 
- taxpayers that are required to designate a fiscal representative will be administrated by the fiscal authority in charge with the fiscal representative;
- taxpayers that have a fixed base in Romania will be administered by the fiscal authority from the area where the fixed base is located;
- taxpayers established within the Community that are allowed to directly register in Romania will be administered by the qualified service within the General Direction of Public Finances Bucharest;
- non-residents earning capital gains from the transfer of securities in a Romanian company will be administered by the fiscal authority from the area where the institution through which the securities are traded is located (for listed companies) or by the fiscal authority from the area where the company whose securities are transferred is located (for non-listed companies).


Fiscal administration
(Order 2.235/2006 published in Official Gazette 1.055/30 December 2006)

Between 1 January 2007 and 31 December 2007 the number of payment record (Rom. ‘numar de evidenta a platii’) is not supposed to be filled in on tax returns and/or payment orders.

Bureau for assistance in recovery of receivables assessed in another EU Member State
(Order 2.035/2006 published in Official Gazette 990/12 December 2006)

A new bureau is created at the level of the National Agency for Fiscal Administration in order to assist in recovery in Romania of receivables assessed in another EU Member State and vice-versa.

Correction of errors in the tax payment documents
(Order 2.089/2006 published in Official Gazette 1.043/29 December 2006)

The correction is to be performed based on a written request submitted to the relevant fiscal authority within one year from the date when the error occurred.


CAPITAL GAINS TAX

Instructions for the computation, withholding and payment of the tax on capital gains derived by individuals from the transfer of securities
(Order 87/2006 published in Official Gazette 969/4 December 2006)

The Order approves the Instruction 7/2006 which amends the Instruction 12/2005 regarding the computation, withholding and payment of the tax on capital gains derived by individuals from the transfer of securities.

The amendments brought to Instruction 12/2005 clarify aspects such as
determination of the purchase price of a security (other than social parts) and computation of the gain or loss on the transfer of such securities.

The Order also approves the format of certain documents to be used in this respect.



VAT

VAT and excise duties exemption for final importation of certain goods
(Order 2.220/2006 published in Official Gazette 1.037/28 December 2006)

The Order provides inter alia that the goods carried in the personal luggage of travellers from third countries will be exempt from VAT and excise duties provided that they are not imported for trade purposes and that their value is below EUR 175/person. For specific goods limits in quantities are foreseen.

VAT exemptions will inter alia also apply to the importation of capital goods and other equipment belonging to companies that cease their activity in a third country and bring these goods to Romania for the purpose of carrying out a trade activity.

The VAT exemption is inter alia also granted for samples of goods that are provided solely for the purpose of obtaining orders from customers.

VAT exemption for delivery of goods and services to diplomatic missions, foreign nationals under a diplomatic status and representative offices of international organisations
(Order 2.215/2006 published in Official Gazette 1.040/28 December 2006)

Such supplies shall be VAT exempt provided that the total value of the supply of goods and services exceeds a certain threshold and provided that certain conditions are met. The Order details the procedure for applying the exemption.

Application of simplification measures for transfers and operations assimilated to intra-Community acquisitions
(Order 2.216/2006 published in Official Gazette 1.040/28 December 2006)

The Order provides for the VAT simplifications applicable in respect of the transactions performed within the frame of call-off stock agreements and for goods sent for testing.

In respect of call-off stocks, the simplifications apply as follows: the supplier is not deemed to perform an assimilated intra-Community acquisition for VAT purposes provided that: (i) the customer is registered for fiscal purposes in Romania; (ii) the Member State of origin does not treat such transactions as transfers; and (iii) the customer is known by the supplier when the goods are transported from another Member State to Romania.

Simplifications are also foreseen for goods dispatched from Romania to another Member State.

Procedure and conditions to be met for the authorisation of the VAT warehouse regime
(Order 2.219/2006 published in Official Gazette 1.040/28 December 2006)

The Order provides for the types of goods that are allowed to be placed under the warehouse regime as well as for the documents to be submitted in this respect.

VAT related registers
(Order 2.217/2006 published in Official Gazette 1.041/28 December 2006)

The Order provides for the persons that are required to keep records for VAT purposes and the template of various VAT registers (e.g., sales and purchase journals, the register of non-transfers) as well as related filling-in instructions.

Instructions for the application of the simplification measures related to works on movable property subject to transfers and assimilated intra-Community acquisitions
(Order 2.221/2006 published in Official Gazette 1.045/29 December 2006)

The Order sets a series of simplification measures in the frame of multilateral/multiparty works on movable tangible property.

Software importation
(Order 2.189/2006 published in Official Gazette 1.043/29 December 2006)

The Order approves the Decision 7/2006 of the Central Fiscal Commission providing that the software importation on electronic support shall be treated as importation of goods for VAT purposes.

VAT exemption for exports, intra-Community transport/delivery of goods and international transport/delivery of goods
(Order 2.222/2006 published in Official Gazette 1.043/29 December 2006)

The Order provides for the exemption application methodology and the specific documents related to the exemption of VAT related to such transactions.


VAT exemptions for the international traffic of goods
(Order 2.218 published in Official Gazette 1.046/29 December 2006)

The Order provides for the exemption application methodology. The exemptions for the international traffic of goods are temporary and they become final at the moment when the goods are exported. Furthermore, the Order provides for detailed rules on the VAT warehousing regime.


INTRASTAT

Intrastat Law
(Law 422/2006 published in Official Gazette 967/4 December 2006)

Please refer to our Tax Alert No. 35 dated 7 December 2006.


CUSTOMS

Automatic export and import licences
(Order 837 published in Official Gazette 1.032/27 December 2006)

The normative act repeals Order 391/2003 related to merchandise subject to automated export and import licenses.

Community/common transit regime
(Order 9.327/2006 published in Official Gazette 1.055/30 December 2006)

The Order provides for the technical norms applicable to the Community/common transit regime.

Procedure applicable to the administration of the tariff quotas by the Customs Authority
(Order 9.923/2006 approving the Technical Norms regarding the activity of the Customs Authority in charge with Community tariff quotas administration published in Official Gazette 1.054/30 December 2006)

The Technical Norms provide for the procedure to be followed for the administration of tariff quotas in Romania through the General Taxation Department and Customs Union (DG TAXUD) within the European Commission. The administering activity is carried out by the Customs Authority through the Central Quotas Department and the Customs Offices. The Romanian customs authority will be regularly notified by DG TAXUD in respect of establishing, freezing, depletion and re-opening of tariff quotas.

The Order also provides that certain tariff quotas monitored based on a certificate (license) are administered directly by the Ministry of Agriculture or by other authorities provided by law.


ACCOUNTING REGULATIONS

Amendments to Order 1.752/2005 on accounting regulations in line with the EU Fourth and Seventh Directives
(Order 2.001/2006 published in Official Gazette 994/13 December 2006)

Please refer to our Tax Alert No. 36 dated 21 December 2006.


CREDIT INSTITUTIONS

Credit institutions and capital adequacy
(Emergency Ordinance 99/2006 published in Official Gazette 1.027/27 December 2006)

The normative act establishes the conditions to be met in order to gain access to the banking activity as well as the general rules according to which such activity is carried out in Romania, the prudential surveillance of the credit institutions and of the payment systems.


MISCELLANEOUS

Employment of disabled persons
(Law 448/2006 published in Official Gazette 1.006/18 December 2006)

Legal entities having at least 50 employees must employ a number of disabled persons which is at least 4% of the total personnel number. If the above requirement is not complied with, the employer may: 
- pay to the state budget a monthly amount representing 50% of the minimum gross base salary multiplied with the number of work places which should be occupied by disabled persons; 
- buy, on a partnership basis, goods or services from authorised protected units (i.e., places of work including facilities adapted to the special needs of the disabled persons), the value of which equals the amount due as described above.

In addition to all the above, the law provides for a series of tax incentives to be granted to entities that employ disabled persons (deductibility of certain transportation and training expenses, subsidies, etc)


Minimum gross base salary
(Government Decision 1.825/2006 published in Official Gazette 1.025/22 December 2006)

Starting 1 January 2007, the monthly minimum gross base salary is RON 390.

Financial – accounting forms
(Order 2.226/2006 published in Official Gazette 1.056/30 December 2006)

The Order provides the minimum information requirements to be met by certain financial accounting documents.

The fiscal invoices as well as the various forms printed by ‘Imprimeria Nationala’ that remained in stock may still be used after 1 January 2007 as long as they contain the minimum information required by the applicable legislation.

Local taxes
(Order 2.052bis/1.528/2006 published in Official Gazette 1.032/27 December 2006)

The Order provides the template of the documents used for local tax purposes.

NBR reference interest rate for December 2006
(Circular 25/2006 issued by NBR published in Official Gazette 995/13 December 2006)

The reference interest rate for December 2006 is 8.75% per annum.

Statistical reporting of data for the balance of payments
(Norm 26/2006 issued by the NBR published in Official Gazette 1.031/27 December 2006)

The normative act repeals Norm 2/2004. The new regulation specifies inter alia that for statistical purposes, the residents are required to fill in a special form for every payment performed or received from non-residents if the value of the transaction amounts to at least EUR 12.500; for payments below this threshold, the credit institutions may use their own forms.

The Norm provides that the resident individuals and legal persons holding at least 10% of the share capital of a non-resident company or entities devoid of legal personality (e.g., branches) authorised abroad shall be treated as direct investors for statistical reporting purposes and therefore shall be required to report such holdings to the NBR.

The Guarantee Fund for salary payments
(Government Decision 1.850/2006 - the Methodological Norms for the application of Law 200/2006, published in Official Gazette 1.038/28 December 2006)

The normative act provides for the procedure and methodologies to be followed by employers as well as for the template of certain forms.

Free circulation of EU citizens within the Romanian territory
(Law 500/2006 for the approval of Ordinance 30/2006 for the amendment of Emergency Ordinance 102/2005, published in Official Gazette 1.055/30 December 2006)

The normative act provides inter alia that:
- the documents required for the issuance of the registration certificate must comply with a series of new conditions regarding the certification by apostille and extra legalisation;
- the Authority for Foreigners shall assign a personal identification number for every EU citizen registered in Romania.

Order approving list of inactive taxpayers and list of reactivated taxpayers
(Order 975/2006 published in Official Gazette 976/6 December 2006)

The Order provides the list of inactive taxpayers and of those which were reactivated.