The fiscal changes, promulgated by Klaus Iohannis

English Section / 27 octombrie 2023

The fiscal changes, promulgated by Klaus Iohannis

Versiunea în limba română

Yesterday, President Klaus Iohannis signed the decree for the promulgation of the Law on some fiscal and budgetary measures to ensure Romania's long-term financial sustainability. It is about the fiscal measures assumed by the Ciolacu government in Parliament, most of them coming into force on January 1, 2024.

The law imposes a tax threshold of 2% on bank turnover for the years 2024 and 2025. At the same time, large companies, with turnover exceeding 50 million euros, will have to pay a tax of 1% on turnover , if the tax paid on the profit, accumulated from the beginning of the tax year/year and changed until the end of the quarter/year of calculation, is less than the minimum turnover tax. Moreover, the normative act also modifies the taxation of micro-enterprises, the respective economic agents being forced to pay, from January 1, 2024, the following taxes on profit: 1%, for micro-enterprises with revenues that do not exceed 60,000 euros; 3%, for micro-enterprises that achieve revenues over 60,000 euros or carry out certain activities, main or secondary, corresponding to specific CAEN codes.

By that law, the tax benefits granted to employees in the IT&C sector were limited and reduced until December 31, 2028 inclusive, as well as the tax benefits granted to the construction, agricultural and food industry sectors, by introducing a ceiling up to which exemption from payment is granted income tax, respectively up to the level of 10,000 lei inclusive. Moreover, employees in the respective sectors of activity will also pay CASS contributions.

As regards labor taxation, the law assumed by the Government Parliament and promulgated yesterday by President Iohannis establishes the 10% taxation - for CASS - of meal vouchers and holiday vouchers granted to employees.

In addition to these measures, the normative act also provides for an increase in VAT for some goods and services. Thus, VAT increases from 5% to 9% for the supply of social housing, the supply of high-quality food, the supply and installation of photovoltaic panels, solar thermal panels, heat pumps and other high-efficiency heating systems, as well as for the delivery of homes that have a useful surface of a maximum of 120 sqm, exclusive of household annexes, the value of which, including the land on which they are built, does not exceed the amount of 600,000 lei, exclusive of value added tax, purchased by natural persons. Fitness gym owners will pay 19% VAT, as will entrepreneurs who organize clubs, amusement parks, recreational parks and sporting events. VAT of 19% will be paid, according to the new normative act, by merchants who deliver alcohol-free beer and foods with added sugar, whose total sugar content is at least 10g/100g product. The fiscal changes also include an increase in excise duties for drinks containing sugar, for tobacco and for alcoholic beverages.

The new tax rules also contain a special tax for houses/apartments and expensive cars, of 0.3%, which will apply to people who own buildings with a taxable value of the building over 2.5 million lei and to natural persons and legal entities that own cars registered/registered in Romania whose individual purchase value exceeds 375,000 lei.

We remind you that the Government decided to adopt this law in order to reduce the budget deficit of our country, which this year is estimated to be 1.1% higher than the target set in the spring of 2020 with the European Commission for the end of 2023, namely 4.4%.