Newsletter no. 2 – February 2023

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Summary

1. New fiscal amnesty programme for reclassification of income from other sources such as gift vouchers (Law 43/2023)
2. DAC7 implementation in the Fiscal Procedure Code (GO 16/2023)
3. Procedure to calculate, collect and pay tax related to sale of agricultural land located outside built-up areas (Order 396/2022)
4. Procedure to establish tax on income from sale of agricultural land located outside built-up areas/control package of legal entities that own one or more properties located outside the built-up area (Order 216/2023)
5. Declaring and paying solidarity contribution (Order 172/2023)
6. Form 112 updated (Order 165/2023)
7. Updated list of fiscal obligations paid into sole account (Order 170/2023 and Order 188/2023)
8. Other legislative news
9. Closing exchange rates for February 2023
10. Social indicators

Law 43/2023 to cancel certain fiscal obligations (Official Gazette 163/2023)

Summary

The Law brings a new amnesty programme for reclassification of income from gift vouchers obtained by individuals from persons other than their employers from the category of income from other sources as salary income. The amnesty applies to periods prior to December 31^st, 2020.

Details

The differences between main fiscal obligations, as well as the related ancillary fiscal obligations, established by the fiscal authority through a taxation decision issued and communicated to the taxpayer, due to reclassification of gift vouchers obtained by natural persons from other entities than their employers, from the category of income from other sources to the category of salary income are cancelled for the fiscal periods up to and including December 31^st,2020 and unpaid by the date of entry into force of this law.

The cancellation applies even if the gift vouchers were granted by the income payer to the employer of individuals to have them distributed to their employees on behalf of the income payer.

The fiscal authority does not reclassify income from gift vouchers obtained by individuals from other entities than their employers and classified in the category of income from other sources as income from salary and does not issue a taxation decision in connection to such reclassification, for the period prior to December 31^st,2020.

The differences between main fiscal obligations and/or additional fiscal obligations, established by the fiscal authority through a taxation decision issued and communicated to the taxpayer, as a result of the reclassification of amounts provided for in the first paragraph, settled by payment, compensation, enforcement or payment under conditions of art. 22 of Fiscal Procedure Code, related to fiscal periods up to and including December 31^st, 2020, are returned to taxpayers. The refund is made upon the taxpayer request.

The prescription period for the right to request a refund of amounts provided above begins from the date of entry into force of the current law (February 27^th, 2023).

Cancellation of fiscal obligations is carried out ex officio, by the competent fiscal authority or upon taxpayer request, by issuing and communicating a decision to cancel fiscal obligations, according to the legal procedure approved by ANAF Presidential Order within 30 days from the effective date of the current law.

If, prior to the entry into force, the competent fiscal authority issued, but did not communicate the taxation decision through which obligations of the nature provided above were established, then the fiscal authority will revoke and will not communicate the taxation decision, and the fiscal obligations are deducted from the taxpayer’s analytical records, based on deduction tally-sheet.

The application procedure, as well as methods to return amounts provided by this law, are approved by ANAF Presidential Order, which is issued within 30 days from the date of entry into force of the law.

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Ordinance 16/2023 to amend and complement Law 207/2015 on the Fiscal Procedure Code (Official Gazette 86/2023)

Summary

The Ordinance transposes provisions of (EU) Council Directive 2021/514 to amend Directive 2011/16/EU on administrative cooperation and extends the automatic exchange of information in the tax field to income obtained through digital platforms (“DAC7”).

At the same time, the Ordinance introduces changes to the amicable procedure and expands the scope of its application. Changes are also introduced regarding the reporting obligations of financial institutions and the exchange of information.

Details

DAC 7

Starting 2023, platform operators from member states and third countries have the obligation to annually report information on economic activity carried out by individuals and legal entities on the respective platforms. The deadline is January 31^st of the year following the reporting period.

Platform operator means an Entity that, based on contracts, makes the entire Platform or a part of it available to Sellers. Platform operators that have the DAC7 reporting obligation should register with the competent authority in Romania or in any other member state in order to comply with fiscal due diligence and reporting procedures. A platform operator has the obligation to report if it finds itself in any of the following situations:

a) has fiscal residence in Romania or another member state or:

• is incorporated under the Romanian legislation or another member state;
• has management headquarters, including effective management, in Romania or another member state;
• has permanent headquarters in Romania or another member state and is not a Qualified Platform Operator from outside the European Union;

b) facilitates performance of a Relevant Activity by Reportable Sellers or a Relevant Activity that involves rental of real estate located in Romania or in another member state and is not a Qualified Platform Operator from outside the European Union.

Platform means any software, including a website or part of a website, and applications, including mobile applications, which allow Sellers to be connected with other users for the purpose of performing a Relevant Activity, directly or indirectly, for those users.

Relevant Activity means an activity carried out in exchange for consideration and consists of any of the following:

a) Rental of real estate, including residential and commercial, as well as any other real estate and parking spaces;

b) Provision of services;

c) Sale of goods;

d) Rental of any means of transportation.

Seller means a user of a Platform, that may be an Individual or an Entity, and it is registered on the Platform at any time during the Reporting Period and performs a Relevant Activity. No information is reported for the following types of Sellers:

a) Government Entities;

b) Entities whose shares are regularly traded on a regulated market or Entities affiliated with an Entity whose shares are regularly traded on a regulated market;

c) Entities for which the Platform Operator has facilitated over 2,000 Relevant Activities by renting real estate in connection with Listed Real Estate during the Reporting Period; or

d) Entities for which the Platform Operator facilitated less than 30 sales of goods and for which the total value did not exceed the equivalent in RON of EUR 2,000 during the year.

By December 31^st of the reporting period, a Platform Operator, having the obligation to report, completes fiscal due diligence procedure which includes: identification of sellers subject to examination, collection and verification of information (including leased real estate), determination of fiscal residency of sellers. For Reportable Sellers that are already registered on the platform on January 1^st, 2023, the fiscal due diligence procedure should be completed by December 31^st of the second reporting period.

The annual reporting obligation of Digital Platform Operators applies starting with the activity of 2023, and the first reporting deadline is January 31^st, 2024.

Failure to comply with the new obligations constitutes contraventions and may be sanctioned with fines up to RON 100,000. Also, fiscal authorities may order providers of networks or electronic communication services to cease access to the website or applications of the platform operator that has the obligation to report.

Amendments on amicable procedure

The Ordinance extends the application of the amicable procedure.

Based on provisions of a convention or agreement to avoid double taxation, concluded by Romania with another state, when a taxpayer considers that the measures taken by one or both contracting states result in taxation that is not in accordance with provisions of that convention or agreement, that taxpayer may present his/her case to the competent authority of any of the contracting states, if the respective convention or agreement provides this possibility.

In case the provisions do not establish a possibility to address the competent authority of any of the contracting states, the taxpayer resident in Romania may ask ANAF to initiate the amicable procedure when it considers that the measures taken by one or both of the contracting states result in taxation that is not in accordance with provisions of the respective convention or agreement.

If the provisions do not establish the possibility to address the competent authority of any of the contracting states, and ANAF considers that the taxpayer’s objection may not be admitted or is unjustified, ANAF notifies the competent authority of the state with which Romania has concluded a convention or an agreement to avoid double taxation on this fact or implements a bilateral consultation process that allows the competent authority of the other state to present its opinions regarding the subject of the amicable procedure.

The provisions are complemented by provisions of the Convention on elimination of double taxation on adjustment of associated enterprises profits (90/436/EEC), of the revised Code of Conduct for effective implementation of the Convention on elimination of double taxation on adjustment of associated enterprises profits (2009 /C322/01), as well as conventions or agreements to avoid double taxation concluded by Romania with other states.

The above rules apply to applications submitted as of the date from which the provisions of the Multilateral Convention for the Implementation of Measures Related to the Prevention of Erosion of the Taxable Base and the Transfer of Profits, opened for signature and signed by Romania in Paris on 7 June, are applicable within the tax treaties 2017, ratified by Law no. 5/2022, or after that date for conventions or agreements to avoid double taxation concluded by Romania with other states which provide for the possibility that a taxpayer can present its case to the competent authority of any of the contracting states. Requests for the initiation of the amicable procedure submitted before the date of entry into force of the ordinance are resolved in accordance with the provisions in force on the date of submission of the request for the initiation of the amicable procedure.

ANAF also carries out the amicable procedure if the competent authority of the state with which Romania has concluded a convention or an agreement to avoid double taxation requests it.

The method of carrying out the amicable procedure is approved by ANAF Presidential Order.

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Order 396/2022 M194/ 396/ 883/ 179/ 165/C/ 9507/ 389/ 48/ 4297 to approve Procedure to calculate, collect and pay tax, as well as declarative obligations set according to art. 4^2 of Law 17/2014 on certain measures to regulate the sale-purchase of agricultural lands located outside built-up areas and to amend Law 268/2001 on privatization of companies that manage public and private land owned by the state for agricultural purposes and establishment of the State Domains Agency (Official Gazette 93/2023)

Summary

The Order approves Procedure to calculate, collect and pay tax, as well as declarative obligations when selling agricultural land located outside built-up areas.

Details

Tax is due by the seller in the case of sale of agricultural land located outside built-up areas, during the first 8 years from the purchase.

Method to calculate, collect, pay and declare tax when the sale is carried out by public notaries

The tax is calculated by applying an 80% rate to the positive difference between value of agricultural land on date of sale and on date of purchase, determined according to the indicative value established by expert data drawn up by the chamber of public notaries or the minimum value established by a market study carried out by chamber of public notaries.

The tax is calculated and collected by the public notary (in cash, by POS terminal or bank transfer) prior to authenticating the notarial act for the sale of agricultural land located outside built-up areas.

Public notaries declare the tax, on a monthly basis, by the 25^th of the month following the month when tax was collected. The tax is declared by submitting form 100, Statement on payment obligations towards the State Budget, to the competent fiscal authority, along with File index/Slip on distribution of the amount of … to administrative-territorial units, representing additional tax related to sale of agricultural land located outside built-up areas for the month of ….

The tax is paid by the notary by the 25^th of the month following the month when it was collected, to State Budget – revenue account 20.A.12.18.00 – Additional tax related to sale of agricultural land located outside built-up areas.

No tax is due in the case of transfer by sale of agricultural land located outside built-up areas acquired by inheritance, partition by court or other legal acts of acquisition, except sales contract.

A refund of tax withheld from the transfer by sale of agricultural land located outside built-up areas, collected by the notary office, and paid to the state budget, related to certain transactions that ceased after payment of the tax, is made upon taxpayer request of the competent fiscal authority (according to the taxpayer’s domicile).

Sale of control package of legal entities that own one or more properties located outside the city

In case of transfer by sale of the control package of legal entities that own one or more agricultural properties located outside built-up areas and represent more than 25% of real estate properties of the legal entity, the transfer taking place during the first 8 years from purchase of any of these real estate holdings, the individual and/or legal entity selling it is obliged to pay a tax. The tax represents 80% of the positive difference between value of the agricultural land on date of sale and on date of purchase, determined according to the indicative value established by expert data drawn up by the chamber of public notaries or the minimum value established by the market study carried out by chamber of public notaries, as the case may be, for the applicable period.

The taxpayer has the obligation to declare income within 10 days from the date of the transfer, and subsequently has the obligation to pay the tax within 60 days from notification date of the taxation decision.

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Order 216/2023 to approve Procedure to establish tax on income obtained from transfer of agricultural land located outside built-up areas/control package of legal entities that own one or more properties located outside the built-up area, as well as template and content of certain forms (Official Gazette 165/2023)

The Order approves Procedure to establish tax on income obtained from transfer of agricultural land located outside built-up areas/control package of legal entities that own one or more properties located outside built-up areas, as well as the required forms.

Thus, template, content and instructions are approved for the following forms:

• 213, Statement on income obtained by an individual/a legal entity from transfer by sale of the control package of legal entities that own one or more properties located outside built-up areas. This form is used to declare income obtained from transfer by sale of the control package of legal entities that own one or more properties located outside built-up areas and that represent more than 25% of the assets provided for by art. 42 para. (5) point 1 of Law 17/2004, only if the transfer takes place prior to the end of an 8-year period from the purchase date of any of these properties.
• 214, Application to determine tax on income obtained by an individual and/or a legal entity from transfer, by court decision, of agricultural land located outside built-up areas /control package of the legal entity that owns one or more properties outside built-up areas.

Also, template and content are approved for form:

• Report to establish calculation basis for the tax when the transfer of ownership of agricultural land located outside built-up areas/control package of legal entities that own one or more properties located outside built-up areas is carried out by a court decision.
• 259, Taxation decision on income obtained by an individual and/or a legal entity from transfer of agricultural land located outside built-up areas/control package of legal entity that owns one or more properties located outside built-up areas.

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Order 172/2023 to amend and complement ANAF Presidential Order 587/2016 to approve template and content of forms used to declare taxes and fees for self-taxation and withholding tax regimes (Official Gazette 113/2023)

Summary

The Order regulates declaration and payment of solidarity contribution introduced at the end of 2022 through GEO 186/2022.

Details

The Order complements List of payment obligations to the State Budget, by introducing the solidarity contribution at position 88. Also, instructions to complete form 100, Statement on payment obligations towards the State Budget, are updated. Thus, taxpayers that have the obligation to pay a solidarity contribution will submit form 100 annually, by the 25^th of June of the following year or by the 25^th of the sixth month, from the end of the modified fiscal year/different financial year.

We continue to review provisions of GEO 186/2022 that regulate the solidarity contribution.

Who owes solidarity contribution?

Solidarity contributions are due by corporate tax and micro-enterprise income taxpayers which:

• carry out activities in the sectors of crude petroleum, natural gas, coal and refineries, with NACE codes: 0610 – Extraction of crude petroleum, 0620 – Extraction of natural gas, 0510 – Mining of hard coal, 1910 – Manufacture of coke oven products and 1920 – Manufacture of refined petroleum products and for which these activities represent more than 75% of turnover;
• are affiliated with taxpayers that carry out the previously mentioned activities, when they achieve at least 50% of turnover for 2022, or 2023 for the relation with affiliated entities/persons;
• are affiliated with the affiliated entities from the previous point, when they achieve at least 50% of turnover for 2022, or 2023 for the relation with the affiliated entities.

Companies that are part of a tax group in the field of corporate tax owe, calculate and pay the solidarity contribution individually.

How solidarity contribution is calculated?

The level of solidarity contribution adopted by Romania is 60%, while the minimum level provided by Regulation (EU) 2022/1854 is 33% and applies to excess profits.

The calculation of the solidarity contribution is based on taxable profits for the financial year of 2022/2023 which exceed average taxable profits related to the financial years from the period 2018-2021 by more than 20%.

Solidarity contribution = [taxable profit of the year 2022/2023 – (1.2 x average taxable profits for the 2018-2021 period)] x 60%

Companies that have a modified fiscal year will consider financial years different from the calendar year.

Taxable profits/accounting losses included in the calculation of the average are those determined prior to recovery of losses from previous years. Companies that did not exist, partly or fully, during the 2018-2021 period, will only take into account taxable/accounting profits related to the years when they existed in order to determine average of taxable/accounting profits.

The solidarity contribution is calculated, declared and paid annually by June 25^th of the following year or by the 25^th of the sixth month from the end of the modified fiscal year/different financial year.

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Order 165/ 7/ 1272/ 456/2023 to approve template, content, submission and managing methods for Return on social contributions, income tax and nominative list of insured persons (Official Gazette 119bis/2023)

The Order updates template and content of form 112, Return on social contributions, income tax and nominative list of insured persons, as well as 1.1 Employer annex and 1.2 Insured persons annex.

The new form will be used starting with the declaration of income related to January 2023.

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Order 170/2023 to complement Annex of ANAF Presidential Order 1612/2018 to approve List of fiscal obligations paid into sole account (Official Gazette 128/2023)

The Order complements the List of fiscal obligations paid into sole account, by introducing position 301, Tax on income obtained from transfer of securities and operations with derivative financial instruments.

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Order 188/2023 to amend and complement ANAF Presidential Order 587/2016 to approve template and content of forms used to declare taxes and fees for self-taxation and withholding tax regimes (Official Gazette 120/2023)

Summary

The Order updates List of payment obligations to the State Budget by introducing the tax resulting from the sale of agricultural land located outside built-up areas.

Details

The Order updates List of payment obligations to the State Budget as follows:

Position 80 – Tax on additional income obtained by electricity producers is repealed.

Two new positions are introduced after position 88:

• 89 – Tax on income obtained from transfer of agricultural land located outside built-up areas
• 90 – Tax on income obtained from transfer of securities and operations with derivative financial instruments

Declaration and payment of tax on income obtained from transfer by sale of agricultural land located outside built-up areas is performed by the 25^th of the month following the month of collection by the public notary.

The declaration and payment of tax is made by the 25^th of the month following the month when it was withheld, in the case of tax on income from transfer of securities and operations with derivative financial instruments.

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Other legislative news

Order 1/2023 to complement NBR Order 27/2010 to approve Accounting Regulations in accordance with IFRS and NBR Order 6/2015 to approve Accounting Regulations in accordance with European Directives (Official Gazette 167/2023)

The Order complements Accounting Regulations according to IFRS, approved by NBR Order 27/2010 and Accounting Regulations according to European Directives, approved by NBR Order 6/2015, by introducing a new chapter regarding the Report on corporate tax information.

The Order applies starting with annual financial statements related to financial year of 2023.

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Order 42/2023 to amend and complement Classification of positions in Romania – occupational level (six characters) approved by Order of the Minister of Labour, Family, Social Protection and Elderly and of the President of National Institute of Statistics 1832/856/2011 (Official Gazette 135/2023)

The Order complements classification of positions in Romania, as follows:

• business service broker – 331109
• marriage counsellor – 263514
• accessibility evaluator – 242121
• embedded system security engineer – 252912
• ICT security engineer – 252911
• guide dog instructor – 516403
• hotel worker – 515110
• strategic customer manager – 122110
• numerologist – 516102
• 3D printing technician – 311809
• wind turbine blade inspection and repair technician – 311312
• wind turbine installation technician – 311313
• wind turbine maintenance technician – 311311

Other changes regarding position titles, codes and groups are mentioned in the Romanian version of this month’s newsletter.

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Valuation of monetary items in foreign currency

The February closing NBR exchange rates to use for valuation of monetary items (cash on hand, receivables, payables) denominated in foreign currency, as well as receivables and payables denominated in RON but pegged to a foreign currency for collection/disbursement are:

1 EUR = 4.9200 RON; 1 USD =  4.6376 RON; 1 CHF = 4.9425 RON; 1 GBP = 5.6088 RON

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Social Indicators 2023

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