This is to inform you that a reform bill was sent to the President on December 2, 2020 to amend and supplement the Fiscal Code.

http://www.cdep.ro/pls/proiecte/upl_pck2015.proiect?idp=18123

The law will go into effect on January 1, 2021, with the exceptions it provides.

CORPORATE INCOME TAX (CORPORATE TAX)

In short, companies belonging to the same group will be able to consolidate their profit and loss positions and tax only the consolidated profit at the group level.

Thus, through consolidation it will be possible to recover tax losses in real time through offsetting against the profit made by other companies in the same group. The concept of “effective place of administration” for foreign legal entities that are controlled and managed in Romania is developed. For this purpose, the establishment of tax residence based on the place of effective management will be obtained by completing and submitting a Questionnaire to the Romanian tax authorities.

There is also full deductibility of loan losses (previously the ceiling was 30 percent).

Other clarifications relate to: reinvested profits; the sale of securities (loss is not limited); situations where sponsorships are reimbursed in the same or different years. granting of tax credit at the level of depreciation of electronic cash registers tax; recovery of tax losses as a result of reorganization operations; the supporting documents required for the application of double taxation avoidance treaties.

INCOME TAXES OBTAINED FROM ROMANIA BY NON-RESIDENTS

The share related to the tax due in case of taxable income obtained from Romania of nonresidents is aligned, reduced to 10 percent from 16 percent.

The deadline for nonresident taxpayers to file the return on the calculation and withholding tax for each income recipient with the appropriate tax agency has been extended to the last day of February of the year following the reporting year (instead of January 31).