Last updated: 17 September 2015
NEW FISCAL CODE: WHAT CHANGES
January 1st 2016 will be the date of entry of the new Fiscal Code (Law no. 227/2015, published in the Official Journal no. 688 of September 10, 2015), an extremely important normative document, bringing substantial changes regarding tax on profit, on dividends, social security contributions or VAT. Today’s article provides a brief presentation of some of these changes, applicable to natural persons. We will treat this issue with regard to legal persons in a subsequent edition.
GRADUAL VAT REDUCTION
As of January 1st 2016, standard VAT will be reduced from 24% to 20% and subsequently to 19%, as of January 1st 2017.
VAT applicable to book, school manual, newspaper or magazine delivery was reduced to 5% and this quota also applies to access to sports competitions and cultural events.
TAX ON BUILDINGS
Until now, the tax on buildings was approximately 0.1% of the taxable value. From now on, residential buildings owned by natural persons will be subject to a 0.08% - 0.2% tax, applied to the taxable value of the building. Taxable value is calculated as the product between the built surface of the building, expressed in square meters, and the corresponding taxable value provided by article 457 of the Fiscal Code.
As regards non-residential buildings owned by natural persons, the tax to be applied is of 0.2% - 1.3% of the value of the building, which will have to be assessed by an certified evaluator.
Residential buildings held by legal persons will also be subject to a 0.08% - 0.2% tax, applied to the taxable value of the building. For non-residential buildings owned by legal persons in order to carry out agricultural activities, the applicable tax will be of 0.4% of the taxable value of the building.
The quota will be established by the Local Council (Mayor’s Office) of the locality where the immovable is located.
TAX ON SPECIAL CONSTRUCTIONS
As regards the 1% tax on special constructions (such as industrial buildings, except for those used in the food and chemical sectors, metallic constructions, hydroelectric power plants, oil wells, agricultural and zootechnic buildings), even if maintained in the new Fiscal Code, this tax will be eliminated starting from January 1st 2017, as provided by article 500 of the Fiscal Code.
TAX ON DIVIDENDS
Even if an immediate reduction of the tax on dividends paid by a Romanian legal person to another legal person was proposed, it is only from January 1st 2017 that the tax on such dividends will be reduced from 16% to 5%.
HEALTH CONTRIBUTIONS (CASS)
Following the entry into force of the new Fiscal Code, natural persons who do not obtain revenues (salary, pension, unemployment benefits, revenues from independent activities, rent, agricultural activities, social benefits, medical leave indemnities etc.) and are not exempted from the payment of the health contribution will have to pay CASS and thus submit a tax statement to the competent fiscal institution.
Such contribution is of 5.5% of the minimum gross salary (at present, the minimum gross salary is 1,050 Lei/month).
Natural persons must submit their tax statement within 15 days from the date when they stopped obtaining revenues. The payment of the CASS will be made on a trimestral basis, until the 25th of the last month of the trimester.