Government Emergency Ordinance no. 6/2015 for amending and supplementing Law no. 571/2003 regarding the Fiscal Code was published in Official Gazette no. 250 of April 14, 2015.

ALIGNMENT OF THE TAX TREATMENT

The Emergency Ordinance aligns, starting with June 01, 2015, the tax treatment of the incomes deriving from interest, respectively of the incomes deriving from independent activities, obtained by non-resident taxpayers from Romania with the tax treatment applying to incomes from interest, respectively from independent activities, obtained by resident taxpayers from Romania, as follows:

  • incomes from interest obtained by non-resident legal entities legal entities which are residents of a Member State of the European Union or of the European Economic Area and which obtain incomes representing interest from Romania will be allowed to apply for the regularisation of the withholding tax related to these incomes, by declaring and paying the corporate profit tax for the taxable profit related to such incomes; in this context, the withholding tax shall be deemed as an advance payment as regards the corporate profit tax and shall be deducted from the corporate profit tax due; through this provision, the non-resident legal entity is granted the possibility to deduct the expenses related to obtaining these incomes;
  • incomes from independent activities obtained by non-resident natural persons – in a similar manner, natural persons who are residents of a Member State of the European Union or of the European Economic Area and who obtain incomes from independent activities in Romania will be allowed to apply for the regularisation of the income tax withheld under these circumstances, by declaring and paying the income tax for the taxable income related to such incomes; therefore, the non-resident natural person is also granted the possibility to deduct the expenses related to obtaining these incomes.

The new provisions introducing the possibility to regularise the withholding tax applies only if a double taxation treaty or a legal instrument on the exchange of information has been concluded between Romania and the Member State of the European Union or of the European Economic Area in which the person or legal entity is a resident.

OTHER AMENDMENTS INTRODUCED BY THE EMERGENCY ORDINANCE

In addition to the aforementioned legal provisions on eliminating the existing discriminatory tax treatment applicable to certain incomes obtained in Romania by legal entities and natural persons residing in a Member State of the European Union or of the European Economic Area, the Emergency Ordinance also includes amendments regarding:

  • the extension of the reduced VAT rate of 9% on food items, including beverages, except alcoholic beverages, as well as on restaurant and catering services;
  • the computation and payment of the tax on income obtained from the transfer of real estate properties from the personal patrimony;
  • the alignment of the provisions on the re-computation of tax advance payments in case lease agreement are terminated during a fiscal year, regardless of the currency in which the rent is set.

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