This year, as we are used to, changes will be made to the Tax Code, but new changes are underway in the area of ​​micro-entrepreneurship, work is underway to limit benefits, including those introduced by special laws, as well as taxation of transnational companies.

These things were recently mentioned by an official of the Ministry of Finance, Georgeta Toma – Head of Service – General Directorate of Fiscal Legislation and Customs Rules and Accounting Rules.

“This year we will also have changes to the Fiscal Code. From our regulatory sources, we have national policy provisions, we have community policy provisions, as Romania is a member state of the EU. And at the European level, we will see that there is regulatory unwinding,” said Georgeta Toma at the TaxEU forum.

According to her, we also have obligations regarding fiscal reform, a component of PNRR.

“In order to benefit from the respective funds, some elements of the fiscal policy were also agreed upon. The most important are those that have entered the sphere of micro-enterprises. The source of these rules comes from the commitments that Romania took on within the framework of this European project,” she said.

She is the second representative of the Ministry of Finance to announce a tax increase after Aline Chitu, the secretary of state of this institution. He was contradicted by Adrian Cachiu, the finance minister, in January, but given that history is repeating itself, it is clear that it is being worked on.

Where there will be tax changes

From the point of view of the PNRR, Georgeta Toma stated that the revision of the Fiscal Code will apply to institutions.

“These benefits are under careful analysis by some international experts, and after the completion of this report, there will be certain ‘adjustments’, let’s call them, to those benefits that exist throughout the Fiscal Code. On the other hand, not only in the Fiscal Code,” said the representative of the Ministry of Finance.

• “We have benefits in other regulations, right? What is an agricultural production cooperative, which as an object we will not find in the Fiscal Code, but it is in a specific Law”.

“In the future, there will be changes regarding the objects of taxation. They will have to become more fair,” she explained.

She had a presentation in which she wrote “amendments to the Fiscal Code that gradually reduce the scope of the special tax regime applicable to micro-enterprises.”

He did not go into detail, but there is likely to be a lowering of the ceiling for micro-enterprises, possibly to €300,000, as has been circulating for some time. This is after it was reduced from €1 million to €500,000 this year.

What will change in TNC taxation

Another change, a draft to be presented by the end of the year, aims to transpose the directive on a minimum global income tax of 15%.

“Many Romanian taxpayers in this area pay 16% of the relevant profit. Of course, with more careful calculations, we will see that the effective tax rate is also much lower in Romania. It will be necessary to make accurate calculations for the elements of taxation,” said Georgeta Toma.

It is mainly desirable to transpose the EU Directive 2022/2523.

“This regulation will not have an impact on all taxpayers who pay income tax, because there is a business level threshold in the directive, which you know from other reports that are done at the European level (€750 million). According to the data we have, there are also national and multinational groups in Romania that are in this regulatory area,” she said.

• They are fewer compared to other states that are in some ways more friendly to multinational groups, but there are also groups in Romania that will apply these tax rules.

“We are able to maintain several branches of transnational groups. Several Romanian taxpayers will be part of the rules of the parent company based in other European states,” explained the representative of the Ministry of Finance.

According to her presentation, the minimum effective taxation of multinational enterprise groups and large national groups consists of:

• Income Inclusion Rule (IIR), according to which the parent company of a multinational group of enterprises or a large national group is required to calculate and pay its share of additional tax for entities of the group that are taxed at a reduced rate;

• Understatement of Income Tax Rule (UTPR), according to which an entity that is part of an MNC group must pay tax, which is accounted for as an additional cost, equal to the part of the additional tax that was not collected under the IIR at the parent company level for business entities. component groups that are taxed at a reduced rate.

The founding subject is:

• any organization that is part of a multinational group of enterprises or a large national group; and
• any permanent representative office of the main business entity that is part of a multinational group of enterprises.
• Additional tax = tax difference of 15% – effective tax rate
• Tax base = the qualified profit or loss established in the financial statements used for the purposes of accounting consolidation, which is subject to a number of adjustments.
• The calculation is jurisdictional

IMPORTANTLY: According to her presentation, “to allow Member States to benefit from additional tax revenues collected from reduced-rate businesses located on their territory, Member States have the option of applying a national system of qualified additional taxation. is calculated in the same way as additional tax.”

“If we had a subsidiary in Romania of a multinational group with a parent company in France, this minimum tax would have to be paid in France. On the other hand, we know very well that also at the OECD level, it was emphasized that the tax should be paid in the state where the profit is received,” explained Giorgetta Roma.

In this system of minimum taxation of 15%, a new concept was highlighted, she says.

“Although we are talking about this multinational taxation, this part of the tax, which should have been paid in the state of the last company of the relevant group, will still remain in Romania, as this idea of ​​introducing an additional national tax was discussed at the OECD level,” – said the representative of the Ministry of Finance.

• “It’s a bit more complicated, but practically the income tax between the effective rate in Romania and 15% will still remain in Romania.”

“By December 31, we will have a normative act independent of the Fiscal Code, with the help of which we will transpose the directive into national legislation. This is what we strive for,” said Georgeta Toma.

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