Romania: Amendments to the tax law as of 1 January 2019

Emergency Ordinance No. 114/2018, on the establishment of measures in the field of public investments and of fiscal-budgetary measures, the amendment and supplementation of some normative acts and the extension of some deadlines, recently introduced a series of legal changes with a fiscal impact. Below we summarise the most important changes in this regard:

• The deadlines for the refund of the special tax on cars, the pollution tax, the tax on emissions and the environmental stamp duty for cars are postponed from 31 December 2018 and 31 March 2019, respectively, to 30 June 2019.
• For the period between 2019 and 2028, certain tax incentives are introduced for salaries obtained from employers operating in the construction sector, subject to certain conditions. These incentives are:
  • an exemption from income tax and the health insurance contribution;
  • an exemption from the social security contribution due by the employer for special working conditions;
  • a partial reduction in the social security contribution rate due by the employee and of the work insurance contribution rate, due by the employer.

• The VAT simplification measures (the reverse charge mechanism) for certain supplies (e.g. supply of grains and technical plants, supply of electricity to a taxable dealer established in Romania, transfer of green certificates, etc.) will apply until 30 June 2022.
• It is clarified that the 5 % tax reduction for the electronic submission of the Single Return for 2018 is granted by the tax authorities and the related procedure is to be issued by the middle of February 2019.
• The deadline for filing the annual income tax return for joint ventures, except those who earn income from agricultural activities based on the tax bracket, is moved back from 15 March of the year following the one in which the income has been earned to 15 February of the year following the one in which the income has been earned.
• If the salary obtained under a labour agreement is below the minimum wage and the law provides for a differentiated minimum wage, the health insurance and the social security contributions due by reference to the minimum wage are to be calculated according to the minimum wage applicable to the category of persons for which the contributions are due.
• Excise duties on cigarettes for 2019 are increased from RON 457.71 per 1,000 cigarettes to RON 483.74 per 1,000 cigarettes.
• A tax on financial assets is introduced for credit institutions who are Romanian legal persons as well as for the Romanian branches of foreign credit institutions. The rate ranges from 0.1 % to 0.5 %, depending on the extent to which the ROBOR exceeds the 2 % reference rate.

Emergency Ordinance No. 114/2018 was published in Official Gazette No. 1116 of 29 December 2018.

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Co-author: Anamaria Tocaci