Contracts with companies undergoing insolvency proceedings
Insolvency proceedings usually have a significant impact on a company's activities. For example, there are statutory changes to the company's decision-making procedures, or a new managing director must be appointed (the so-called special administrator, who acts separately from the insolvency administrator), or certain activities require the consent of the insolvent company's creditors. So what does insolvency mean for a company's current and new contracts?
Household services - flexibilisation or increased administrative burden?
Since 1 January 2024, Law 111/2022 has regulated the performance of activities by natural persons in households. These are remunerated with tax-privileged vouchers for household activities (tichete de activităţi casnice).
E-transport and e-seal - new transport monitoring systems in Romania
Important innovations have been introduced in the area of state monitoring of the Romanian transport system due to European regulations. It is becoming important for the legislator to monitor goods (especially those with high tax and customs risks) on their domestic or intra-Community transport routes. To this end, the means used are becoming increasingly modern and complicated.
Direct investments from the EU also under the microscope of the CEISD
Since December 6 of last year, certain direct investments from EU countries with a value of more than EUR 2 million in Romania must be registered respectively approved before the investment begins. Planned direct investments in the following areas of activity are affected by this:
Tax news due to the Emergency Ordinance no. 115/2023
In October 2023, the Romanian government took responsibility in parliament for a law that made significant changes to the tax code. Thus, Law no. 296 of October 26, 2023 was published in the Official Gazette no. 977 of October 27, 2023 on some fiscal and budgetary measures to ensure Romania's long-term financial sustainability. Apparently, these amendments were not sufficient, so that Emergency Ordinance ("EO") No. 115 of December 14, 2023, regarding certain fiscal and budgetary measures to consolidate taxes and combat tax evasion, was published in Official Gazette No. 1139 of December 15, 2023. The following lines summarize the important practical changes for companies that pay corporate income tax or micro-enterprise tax.
Electronic invoices mandatory from 2024: Romania expands RO e-Factura system
Beginning 01.01.2024, Romania will introduce mandatory electronic invoicing in the B2B sector. The national system "RO e-Factura" must be used for all transactions with the place of supply in Romania. All companies active in Romania must prepare for this.
Banking transactions increasingly difficult due to bureaucratic hurdles
Foreign investors are often surprised by the inflexible and bureaucratic attitude of Romanian banks. They require their (prospective) customers to submit a number of forms and information on the beneficial owners (beneficiarii reali) both when opening an account and at regular intervals thereafter. If these are not submitted or not submitted in the required form, the account opening is quickly refused or even blocked - even if the customer has been working with the bank or credit institutions of the same group abroad for many years.
Update regarding the Romanian VAT rates
VAT consistently represents one of the largest sources of government revenue. In 2022, the 22 EU member states that belong to the OECD had an average standard VAT rate of 21.8%[1]. This tax is thus one of the main macroeconomic tools available to the government to adjust budget revenues. In the near future there will be a lot of discussion about changes in VAT rates. [1] https://www.oecd.org/tax/tax-policy/tax-database-update-note.pdf
Corporate tax consolidation through fiscal unities
The Romanian Tax Code provides the possibility for certain companies to form fiscal unities, which file a joint corporate income tax return. The essential feature of these fiscal unities is that the tax results of their members are added together. If the overall tax result is positive, it is taxed; a negative overall result is carried forward at a later date.
Supreme Court of Justice decides on grounds for contesting a tax administrative act
The Romanian Law No. 554/2004 on Administrative Procedure (hereinafter referred to as the Administrative Procedure Law APL) regulates the appeal against administrative acts, decisions and resolutions issued by Romanian authorities, including the Central Tax Administration ANAF.