After months, when entrepreneurs did not know what the Ministry of Finance meant by related enterprises, finally clarifications appeared in the project. Changes are being made to a number of laws, in particular regarding the budget and taxation.

GEO Project Fiscal and Budgetary Changes in 2024 – click to open

What clarifications are provided regarding related enterprises

Two companies are considered related under the following conditions:

• a Romanian legal entity owns, directly and/or indirectly, more than 25% of the value/quantity of participation rights or voting rights in another Romanian legal entity or has the right to appoint or remove the majority of the board members. of directors, time of supervision of another Romanian legal entity;

• the legal entity owns, directly and/or indirectly, more than 25% of the value/quantity of participation rights or voting rights, or has the right to appoint or recall the majority of the members of the board of directors. management or supervision of Romanian legal entities;

• a Romanian legal entity is related to another Romanian legal entity if the person owns, directly and/or indirectly, more than 25% of the value/quantity of participation rights or voting rights or has the right to appoint or remove the majority of the members of the board of directors, management or supervision as in both in the first legal entity and in the second legal entity;

• a shareholder/associate of a Romanian legal entity, who directly and/or indirectly owns more than 25% of the value/number of shares or voting rights of this Romanian legal entity, carries out economic activity through an authorized natural person individual enterprises / family enterprises / other form of economic activity organization without the rights of a legal entity authorized in accordance with current legislation. At the same time, the incomes of the authorized natural person/individual enterprise/family enterprise/other form of economic organization without the status of a legal entity, authorized in accordance with the current legislation, registered in accordance with the current accounting regulations, are accumulated with those made by the Romanian legal entity/other related enterprises.

Money for some veterans

Personnel who received the status of veteran of the theater of operations and do not have disabilities, injuries, physical and (or) mental illnesses as a result of participation in hostilities. Missions and operations benefit from:

• the right to wear a military uniform after leaving the reserve or retiring

• tax-free monthly one-time allowance in the amount of 25% of the minimum wage for active personnel

• the monthly non-taxable benefit is indexed annually to the level of inflation in the amount of 1,000 lei, after transfer to the reserve or withdrawal.

Employees of state-owned enterprises will keep their bonuses

The government is compensating with some measures against state-owned companies. According to the document, in order not to affect the amount of wages in the payment of the majority of employees of economic entities, it is proposed to maintain the provision of bonuses in the form of meal rights/surcharges/vouchers/food standards in the amount of the salary of personnel whose net monthly salary is up to 8,000 lei inclusive, both for business entities that have no losses and for business entities that have recorded losses.

It is also proposed that business entities that recorded accounting losses of previous years and did not compensate and/or account for accounting losses in the current year may provide bonuses in the form of social costs.

Postpone the reintegration of used funds from the PNRR until the end of 2024

It is proposed to delay the reintegration of the funds used from the National Recovery and Resilience Program in December 2023 until the end of 2024.

It is also proposed to continue the temporary use of non-refundable European funds available in connection with the National Recovery and Resilience Program for operational programs financed from the European Structural and Investment Funds related to the 2014-2020 programming period.

The explanatory note also said that if these measures were not taken, the management would not have enough financial resources to pay the refund requests received from the beneficiaries.

State companies will have to transfer at least 50% of their profits to the budget

The project also provides that state-owned companies will have to transfer at least 50% of their profits to the budget.

According to the justification, the Government will be able to establish annually by memorandum drawn up by the Ministry of Finance, in the case of national companies, national companies and companies with full or greater state capital, as well as in the case of autonomous companies created by the state, the distribution of the share of net profit realized in the form of dividends/ payments to the state budget, exceeding the established limit of at least 50% of dividends/payments to the state budget.

At the same time, it was settled that the difference between the quota, which can be established annually by the Government by a memorandum drawn up by the Ministry of Finance, and that approved by the Government by memoranda drawn up by public guardianship bodies, is to be allocated to other reserves as its own source of funding and to be used exclusively and in full with for the purpose of financing investments that have a significant impact on the maintenance/development of their economic activity from the current year, and the amount that remained unused at the end of the current year should be transferred in the form of dividends/payments to the state budget within 60 days after the end of the financial year.

Sanctions have also been introduced for those who do not obey:

A fine from 10,000 to 30,000 lei for the head of the company. The Ministry of Finance and ANAF will make a conclusion.

In state-owned companies, salaries are increased, even if they are unprofitable

State-owned companies, which as of December 31, 2023 recorded accounting losses and/or delayed payments, will be able to provide certain salary allowances, provided that:

– presentation, together with the approval of the income and expenditure budget, of the plan of reorganization, restructuring and financial rehabilitation, approved by the General Meeting of Shareholders or the Board of Directors, as the case may be, containing specific and quantified measures to reduce losses and outstanding payments, as the case may be, and terms of their implementation;

– not to plan an increase in the number of personnel in 2024 compared to that achieved in 2023,

– not to grant bonuses, bonuses, bonuses and other similar rights to wages in 2024,

– not to increase/index or, depending on the circumstances, not to provide for other salary increase mechanisms during 2024 for the rights representing the salary when paid on December 31, 2023.

In addition, for economic entities that registered a profit in the previous year and do not plan losses in 2024, this is regulated as in fully justified cases, such as making investments that have a significant impact on the maintenance/development of their economic activity, since a also the influence on some factors that do not depend on their action/inaction, to exempt from the application of the ratio between the growth index of the average monthly accrued salary per employee and the growth index of labor productivity, calculated in the value or physical. subdivisions, depending on the circumstances, through the Memorandum approved by the Government.

It is regulated that the amounts reflecting the increase in wage costs associated with the forecast of the average price growth index for 2024 should be provided in proportion to the number of months in the current year, so as to avoid providing an increase in wage costs more than the average price index growth forecast for the entire year 2024, even if these costs are within the approved level.

As a result, in a situation where wage increases are not provided from the beginning of 2024, but in the second or last half of 2024, there is a possibility that some economic entities will provide a significantly larger increase in labor costs than the forecast of the average index price growth for the entire year 2024, they are within the approved level of 2024, but which in the next year will lead to the reintegration of wage costs above the average price growth index forecast for 2024 ( 6%).

Other activities:

• It is proposed to increase the total number of allowances for merit by 70, in the context in which the sphere of intangible cultural heritage was included in other spheres of culture for which the allowance is assigned – the sphere of musical creativity, the sphere of interpretative creativity, the sphere of cinematography, the sphere of literature, the sphere of architecture, the field of fine arts, the field of theater and the field of national cultural heritage, movable and immovable.

• Establishing the possibility for the Government to establish by memorandum the total number of management positions in excess of 8%, but not more than 10% of the total number of approved positions in state institutions.

• Change of additional tax in the field of distribution/supply/transportation

electricity and natural gas. It is proposed to replace the exclusionary term to apply the exemption from payment of minimum turnover tax / specific turnover tax to the fulfillment of the condition by receiving a percentage of the income from these activities in the total income. This percentage of 95% retains as the main activity the activities regulated/licensed by the National Energy Regulatory Authority.