The formula to compute the lump sum tax to be applied in the HORECA industry starting next year is presented in a bill to be sent to Parliament next week. It takes into account location (city size, areas), restaurant size and seasonal coefficients.
The highest lump sum tax, of EUR22,680/year, will be paid by restaurants with a floor of over 300 square meters in Bucharest’s A area.
The formula to compute the lump sum tax is k * (x + y*q) *z, where k is the value of the standard tax, of RON1,400, x is a variable considering the rank of the locality, y is a variable considering the area of the restaurant, z is the seasonal coefficient, and q is another coefficient equal to 0.8.
The value of the tax to be paid by similar restaurants may vary significantly. For instance, a 100-sqm restaurant in a commune will be applied lump sum tax worth RON1,785 per year, while a 100-sqm restaurant in Bechet (Dolj county), a town with a population of 3,657 people, will pay three times more, RON5,600/year.
Owners of 100-sqm restaurants in county seats will pay lump sum tax worth RON10,640 per year, almost double than the sum to be paid by owners of restaurants in cities and towns that are not county seats.
According to the bill, x will have the following values:
– Bucharest: A area = 16, B area = 15, C area = 14, D area = 12.5;
– 7 major cities (Brasov, Cluj Napoca, Constanta, Craiova, Iasi, Ploiesti, Timisoara): A area = 14, B area = 13, C area = 12, D area = 11;
– county seats: A area = 11, B area = 10, C area = 8, D area = 4;
– small cities: x = 2;
– communes: x = 0.5.
The variable considering the area of the restaurant (y) will have the following values:
0 – 30 sqm = 2; 31sqm – 50sqm = 4; 51sqm – 70sqm = 6; 71sqm – 90sqm = 8; 91sqm – 120 sqm = 10; 121sqm – 160sqm = 14; 161sqm – 200sqm = 16; 201sqm – 240sqm = 18; 241sqm – 300sqm = 20; over 300sqm = 25.
The seasonal coefficient will be 0.45 for Bucharest and the seven major cities, 0.4 for county seats and small cities, 0.35 for seaside and mountain resorts and 0.15 for communes.
The lump sum tax, which will replace the current 16% tax on profit and 3% tax on sales with a fixed sum, will be applied starting January 1, 2014, according to the bill, which was discussed by the Government Wednesday.
According to people close to the matter, the Government will approve the bill next week and will send it to Parliament to be adopted with urgency.
The lump sum tax will also apply to providers of services in the auto sector, including car washes, tire and car repair shops. The formula on this segment will mainly consider the size of the units.
A 200-square meter car wash, tire repair unit and car repair shop will pay lump sum tax worth RON18,000, RON14,400 and RON24,000 per year, respectively, starting 2014, according to the bill.
The lump sum tax for hotels is computed considering location, stars and number of beds.
For instance, 3-star hotel owners in Bucharest will pay RON334 per bed per year if the hotel is located in central area (A), RON321/bed/year for hotels in areas near the city center (B), RON294 for hotels located farther from the center (C) and RON281 for units on the city outskirts (D).
The value of the lump sum tax for 1- and 2-star hotels in Bucharest is as follows: RON223/bed/year (A areas), RON214 (B areas), RON196 (C area) and RON187 (D area).
Owners of four-star hotels in the capital will pay: RON557/bed/year (A), RON535 (B), RON490 (C) and RON468 (D).
Five-star hotels in Bucharest’s A area will pay the highest lump sum tax, of RON891/bed/year.