The draft, put up for public debate, also sets that crude oil will be marked and colored in a move to reduce tax evasion.
The turnover ceiling above which Romanian companies have to pay value added tax currently stands at EUR35,000. The ceiling will, thus, be increased from 119,000 lei (EUR26,796) to RON220,000.
“The measure targets to reduce the number of individuals registered for VAT purposes in a move to improve on the system used for their taxation and fight tax evasion more efficiently. The measure also targets to simplify VAT obligations of taxable individuals with annual turnovers lower than the RON220,000 ceiling, as they are no longer obliged to file for VAT deductions,” Finance Ministry officials said in the draft’s substantiation note.
The draft also targets to eliminate the right to sales tax deductions on car purchases, currently set at 50%, for vehicles used by the taxable individuals solely for business operations.
The Romanian Government decided in the spring of 2009 to eliminate VAT deductions and, at the end of last year, it decided this type of expenditure can be 50% deducted.
Also, in order to ease the transfer of non-performing receivables in the banking sector, the Finance Ministry suggests allowing deductions on calculating the taxable profit, by means of tax provisions, for taxpayers acquiring these receivables, with a view to recovering the money.
Intermediaries or investment management companies will calculate and retain taxes for each transaction as early payment. Intermediaries will also establish the gains or losses registered by clients throughout the year. Also, brokers and fund managers will be obliged to inform their clients in writing on the profit or loss registered, as well as the taxes calculated and retained as early payment for transactions concluded throughout the year, until the last day of February of the current year, for the year that ended.
Under the current tax collection system, each investor on the capital market is obliged to calculate, declare their earnings on a quarterly basis and pay corresponding taxes on a quarterly basis.
According to the draft, crude oil and excise-based energy products from the local production or imports, shall be marked and colored in a move to reduce tax evasion. The draft bans the use, transport, storage outside tax warehouses and sale of unmarked crude oil.
The ban does not target the crude oil to be exported or delivered toward or from the National Administration of State Reserves and Special Problems. (EUR1=RON4.4408)