The new Tax Code came this week in a straight line. The Ministry of Finance has finalized the draft, the bill was presented today by the Government in its first reading and submitted for public debate.
Here are the main changes proposed by the New Fiscal Code :
1.Lower the VAT to support the economy and middle class income
a. 20% from 1 January 2016; 18% from 1 January 2018;
b. 9% in meat, fish, fruit and vegetables from 1 January 2016;
c. The introduction of reverse charge for the delivery of buildings, parts of buildings and land of any kind
2. Lower the flat rate
a. 14% from January 1, 2019 (for both income tax and profit tax);
3. Tax reduction for active microenterprises, while the microenterprises without employees will be penalised
a. 1% for micro-enterprises with more than 2 employees
b. 3% for micro-enterprises with one employee
c. 3% + 1530 lei quarterly for micro-enterprises without employees
4. Remove the dividend tax from 1 January 2016. This measure helps to eliminate double taxation, increasing Romania's competitiveness and helps maintain the capital in the country.
5. Decrease in excise duty on several products, including gasoline and diesel. The decrease in excise duty on alcohol, beer and sparkling wines (mostly from consumption takes place in national production), in parallel with the increase in excise duty on quietly fermented beverages.
6. Reducing the share of state social insurance contributions for normal working conditions, as of January 2017
a. Reduction in employee contributions from 10.5% to 7.5% from January 1, 2017
b. Reduction in employer contributions from 15.8% to 13.5% from January 1, 2017
7. Increasing the allowances for pension income when determining income tax - currently tax-free the threshold is 1000 lei and it will increase to 1050 lei in 2016 and by 50 lei for each fiscal year until it reaches the 1200 monthly.
8. Extending the tax bases for social security contributions and health insurance contributions and capping its 5 national gross average earnings.
9. Elimination of construction tax, from 1 January 2016. A measure needed to increase domestic investment and competitiveness.
10. Non-taxation of the total expenditure incurred by employers for employee training and improvement.
11. Increasing margins where local authorities can decide on local taxes (for greater decentralization of decision)
12. Abolishment of 19 taxes.
13. For those with low incomes from wages (up to 1000 lei / month gross) the level of personal deductions granted was increased depending on the number of dependents (from a maximum of 650 lei / month 800 lei / month) .
14. 50% tax reduction for hybrid transport means .
15. The regulation introduces the principle of "in dubio against fiscum" (in case of doubt about tax rules, the interpretation is made in favor of the taxpayer).