The business environment, the target of the new taxes and fees proposed by the Bolojan government

The increase in taxation of gains from stock market transactions, the increase in the tax on gains resulting from cryptocurrency transactions, the increase in the housing tax, the reform of the retirement system for magistrates, the increase in the minimum share capital for companies in our country depending on turnover, represent the main changes included in the six legislative projects of package 2 adopted by the Bolojan government in Friday's government meeting, projects for which it will assume responsibility in Parliament. After their approval in the government meeting on Friday evening, the Government's legislative initiatives were sent to Parliament so that for two days, over the weekend, deputies and senators could formulate and submit amendments to the respective projects, amendments on which the Executive would decide today whether to accept them or not, or whether to adopt at least part of them.

It is certain that, at a first reading of the draft laws approved by the Government on Friday, we note that the 2nd package of tax reforms radically changes the rules of the game for investors and entrepreneurs, but also for ordinary citizens and for the public administration. This is probably the main reason why this package of measures is strongly contested by employers and unions, unlike the first package assumed in July by the Bolojan government.

As for the business environment, a first important change is taking place regarding the gains resulting from stock market transactions. Thus, according to the provisions of the draft law for establishing measures to recover and streamline public resources and for amending and supplementing certain normative acts, income in the form of gains from the transfer of securities and from operations with derivative financial instruments, for transfers/operations carried out through the stock exchange, is imposed by withholding tax as follows:

"a) in the case of securities: (i) by applying a rate of 3% on each gain from the transfer of securities that were acquired and alienated in a period of more than 365 days, inclusive, from the date of acquisition; (ii) by applying a rate of 6% on each gain from the transfer of securities that were acquired and alienated in a period of less than 365 days from the date of acquisition;

b) in the case of operations with derivative financial instruments: (i) by applying a rate of 3% on each gain from carrying out operations with derivative financial instruments held for a period of more than 365 days days, inclusive, from the date of acquisition; (ii) by applying a rate of 6% on each gain from performing operations with derivative financial instruments held for a period of less than 365 days from the date of acquisition”.

The text of the draft law also provides that for determining the period in which they were held, it is considered that the securities and financial instruments are alienated/redeemed in the same order in which they were acquired, namely first in - first out, for each symbol.

The same draft normative act also provides that in the case of income from the transfer of virtual currency, the income tax due is calculated by the taxpayer, based on the single declaration regarding income tax and social contributions due by individuals, by applying a rate of 16% on the gain from the transfer of virtual currency, determined as the positive difference between the selling price and the acquisition price, including direct costs related to the transaction. Earnings below 200 lei/cryptocurrency transaction are not taxed provided that the total earnings in a fiscal year do not exceed 600 lei.

The above mechanism is applied transparently, through the single declaration, and marks a turning point for all those who have become accustomed to seeing cryptocurrencies as a less controlled fiscal territory.

• Minimum share capital, depending on turnover

The second package of fiscal measures introduces new rules regarding the entrepreneurial environment. One of the harshest measures in package II is related to companies that do not have a bank account or an account with the State Treasury. According to the draft law initiated by the Bolojan government, these companies will be declared inactive and, if they do not resolve their situation within a year, will be automatically dissolved. Moreover, the same sanction will be applied to newly established companies if they do not open such an account within 60 days of establishment. The measure hits micro-enterprises that operated predominantly on a cash basis, under the pretext of making transactions transparent and combating tax evasion.

The second measure regarding the entrepreneurial environment is the increase in the minimum share capital required for companies. The legislative project approved by the Government provides that the minimum value of the share capital be established according to the company's turnover, as follows: for companies with a turnover below 400,000 lei, the minimum share capital will be 500 lei; for companies with a turnover above 400,000 lei, the minimum share capital will be 5,000 lei. The level was calculated by reference to the average net salary, with the aim of increasing the legal responsibility of LLCs towards creditors, including the state. In the case of newly established limited liability companies, the minimum value of the share capital is 500 lei. LLCs will have a period of 2 years from the entry into force of the regulatory act to increase their share capital to the level established by the new law.

Another tough point of the reform is the deferral of debts, possible only with personal guarantees. Basically, the shareholders or real beneficiaries of a company will be obliged to cover the company's debts from their own assets, in case of collapse, based on a surety contract. Based on these guarantees, if the company enters into financial collapse, the state can directly rely on those who control it. Then, the payment terms for the rest of the tax obligations, which are not subject to deferral, are reduced from 180 to 60 days, which means that the "strategies" of postponement disappear completely.

Fiscal efficiency brings the elimination of the minimum turnover tax starting with 2026, the increase in taxes for polluting vehicles (on the "polluter pays" principle), the granting of incentives for electric cars, as well as new mechanisms to combat tax evasion.

The project also provides for the introduction of a fixed tax of 25 lei for each parcel under 150 euros that comes from the non-EU area, such as China or Turkey. The tax will be established in cooperation with all courier companies.

• State reform - an important chapter in the new package of measures

These measures are part of a larger package of reforms, divided by the Government into six distinct projects, precisely in order to avoid the risk of constitutional blockages and to accelerate their implementation. The six targeted areas cover taxation, the reform of state-owned companies, the reorganization of autonomous institutions such as ANRE, ASF and ANCOM, health, magistrates' pensions and local administration. The autonomous institutions ANRE, ASF and ANCOM will undergo staff reductions of up to 20%, management salaries will decrease by 30%, and management mandates will be limited to a maximum of two.

Regarding magistrates, the project maintains the special pension at 70% of net income, but imposes a transition period of at least 10 years until the retirement age of 65, with the possibility of extending it to 15 years.

For local administration, the project provides for the cutting of 25% of positions (approximately 40,000 people) and the threat of blocking funds from the center in case of late reporting will put maximum pressure on city halls, which risk being left without resources for essential services. This package of measures introduces a unified performance reporting system among public administration, and the complete digitalization of administrative documents must be completed within a maximum of three years. This legislative project on local administration reform did not have all the necessary approvals at the government meeting on Friday and was to be approved by yesterday to be sent to Parliament.

State-owned companies are also coming into the spotlight: allowances are being reduced, the number of members on the boards of directors is decreasing, the governance of state-owned companies will be monitored more strictly, based on quarterly public reports on expenses and profitability drawn up according to mandatory financial indicators.

Control and integrity are becoming key words. Employees of the National Gambling Office will be subjected to psychological and integrity tests, and customs and anti-fraud inspectors will wear bodycams, with each control being fully filmed. Practically, all controls will be filmed, so that there will be no more discussions about "what happened on the ground", in order to increase transparency and discourage bribery. As for the auctions held by ANAF for seized goods, these will only be held online. The goods, starting prices and conditions of participation will be displayed on a digital platform, and the registration fees (10% of the value of the property) will be paid only electronically. Finally, the adjudication report will be signed electronically.

The health reform brings performance contracts for hospital managers, the opening of medical points in rural areas by family doctors and the obligation of CNAS to report quarterly on how public money is spent.

The project proposes the establishment of intermediate norms in the field of building tax and land tax, until the implementation of the mass evaluation of real estate that is subject to taxation using the dedicated IT system in this regard. This IT system is expected to provide in 2026 values to be used to determine the tax base for 2027. Currently, for residential buildings and annex buildings, owned by individuals, the building tax is calculated by applying a rate between 0.08%-0.2%, on the taxable value of the building. The bill practically provides for the doubling of the taxable value of homes to which property tax is applied.

In light of the above fiscal measures, the Government's mission of assuming responsibility in Parliament for the respective bills is expected to be a difficult one as long as we have a joint plenary session that is expected to be tense, in light of the amendments proposed by senators and deputies.