The Fiscal Code, amended again

The Fiscal Code was amended again in the last 2 weeks by Law no. 30/2019 regarding the approval of the Government Emergency Ordinance no. 25/2018 (Law 30/2019 was published in the Official Gazette 44 / 17.01.2019). We hereby present below the most important points.

1. From January 1, 2019, the interest deductibility limits have been increased for corporate income tax purposes. Thus, the excess costs of indebtedness (the difference between borrowing costs and interest revenues) are deductible if they are less than EUR 1,000,000 (instead of EUR 200,000, the old limit), RON equivalent.

The amount exceeding the EUR 1,000,000 ceiling may be deducted up to 30% (instead of 10%) of the following computation basis: revenues minus expenses minus non-taxable revenues plus profit tax, plus the excess costs of indebtedness, plus tax depreciation.

The non-deductible interest expenses can be carried forward also by companies involved in merger or spin-off processes or the successors of these companies.

2. Starting April 1, 2019, corporate income tax payers or microenterprise tax payers can use the sponsorship tax credit only for sponsorships made to non-profit entities who are listed in a register of entities for which tax deductions are granted, register organized by ANAF (the national tax authorities).

3. The above register can contain only the non-profit entities who operate in the area for which they have been set up, who fulfilled their declaratory tax obligations, who have no outstanding tax obligations older than 90 days, who filed in annual financial statements, who were not declared inactive.

4. As of January 20, 2019, the taxation of the income earned by individuals from transfers of virtual currency was regulated by considering the profits from these transactions to be subject to the 10% income tax rate.

5. As from 1 January 2019, in the case where the performed deliveries cannot be cashed due to the bankruptcy of the beneficiary or as a result of a reorganization plan, the VAT base may be adjusted from the date of the sentence or of the closing judgement regarding the beginning of the bankruptcy procedure.

6. Also with the same date, the VAT rate of 5% can be applied for the delivery of dwellings in the case of the purchase of several dwellings by the same individual (so far, the 5% VAT rate was possible only for the first delivery to an individual).