Last updated: 29 May 2014
After the numerous amendments brought to the Fiscal Code, in force since the beginning of the year, that we have informed you about in our article of January 16, 2014, another series of fiscal changes has entered into force as a result of Government Ordinance no. 25/2014 and Government Decision no. 421/2014, the latter amending the methodological norms of the Fiscal Code.
These recent amendments are mainly related to the calculation of the 1.5% tax on special buildings and the exemption from the tax on profits reinvested in technological equipment; hereinafter you can find a brief description of these provisions.
AMENDMENTS REGARDING THE TAX ON SPECIAL BUILDINGS
As we already informed you, the new tax on special buildings was introduced early this year. The rate of this tax is 1.5% and it only applies to certain special buildings, such as industrial buildings (except those in the food and chemical industry), metallic constructions, hydroelectric power plants, oil wells, agricultural and farming buildings etc.
The new provisions bring up several clarifications regarding this tax. According to these provisions, the value of the buildings held by a person, subject to a 1.5% tax, is the accounting value comprised in the accounts corresponding to buildings, without taking into consideration the buildings recorded in the accounts kept off the balance sheet.
For example, a person shall not pay the tax on leased buildings (because this tax shall be paid by the owner of that building) or for public buildings subject to a concession or a management agreement. Moreover, when calculating the tax on buildings, one shall not take into consideration the value of buildings owned by the State or by theadministrative and territorial units, even if they are recorded in the accounts corresponding to buildings.
Another important clarification refers to reconstruction, modernisation,
consolidation, modification or extension works performed by the tenant,
concessionaire or manager. In accordance with the Fiscal Code, such works represent all the works leading to an increase of the building’s value by at least 25%.
Thus, when calculating the tax on buildings, the value of these works is deducted from the building’s accounting value and it shall not be taken into consideration when applying the income tax. The tenant is obliged to inform the owner of the value of the works he has performed and to send him the corresponding supporting documents in order for the owner to submit a new fiscal statement, within 30 days from the date when the works were performed.
TAX EXEMPTION FOR REINVESTED PROFITS
Profits reinvested in technological equipment, such as new industrial machinery, tools and installations used in the company’s activity are exempted from the tax on profits.
This exemption shall apply from July 1, 2013 and in principle the profits taken into consideration for such an exemption are the gross accounting profits corresponding to the period comprised between July 1, 2014 – December 31, 2014 invested in equipment - industrial machinery, tools and installations produced and/or purchased and put into operation after this date.