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News from Members PKF Finconta: Volatility increases due to the wave of tax changes in Romania

PKF Finconta: Volatility increases due to the wave of tax changes in Romania

by PKF Finconta October 16, 2017

On 3 October 2017, PKF Finconta organized the third edition of the "Autumn Tax Update Forum", an annual event that is an opportunity to discuss about taxation in Romania.

Among the topics we discuss are: split VAT, income tax, corporate tax, impact of tax changes at employer and employee level, issues encountered in the practice of tax inspection bodies related mainly to the documentation of service acquisitions, national news and international transfer pricing, BEPS and other global trends in profits taxation.

Below are some of the points that were made during the two sessions of the conference:
The special guest of PKF Finconta, GEORGETA TOMA, discussed the income tax on micro-enterprises, considering the changes in 2017. The topics discussed included the following: taxpayers declared inactive, beneficiaries acquiring goods / services from inactive taxpayers, changes of the amended fiscal year, the change of the changed fiscal year, the expenses related to non-taxable income - non-deductible expenses, non-taxable expenses without allocated expenses, expenses for support of vocational and technical education, special tax rules, owners' associations, assigned claims.

TANTI ANGHEL - specialist on fiscal procedure presented aspects related to the Fiscal Procedure Code, a selection of amendments brought by GO no. 30/2017. During the discussion, the following changes were examined: as regards the language used in the tax administration - art. 8, regarding the assumption of fiscal obligations by other persons - art. 23, as to joint and several liability - Art. 25, regarding the change of the tax domicile - art. 32, regarding the communication of the fiscal administrative act - art. 47, the registration of the non-resident persons - art. 83, unannounced control - art. 134, regarding the scope of fiscal control - art. 151, special maturity terms - art. 155, making the payment - art. 163, regarding the order of extinction - art. 165, the staging procedure, the precautionary measures - art. 213, interruption of the limitation period of the right of the fiscal body to demand enforcement - art. 217, suspension of forced execution by the deposit of a letter of guarantee / insurance policy - art. 235, the annulment of the tax receivables - 266, the settlement of the appeals - art. 276 and suspending the execution of AAF - art. 278.

DANIELA TĂNASE - special guest PKF Finconta, addressed issues related to the topic of split VAT: crediting the VAT account, situations where suppliers / providers are required to pay / deposit amounts in the VAT account, debiting the VAT account, contraventions and sanctions, changes in VAT by Law no. 177/2017 and recent CJEU cases. It stated that the VAT deduction mechanism does not change any tax rules in the field of VAT. For example, it does not change: the rules on VAT eligibility, the rules for entering the transactions in the VAT return, the deadline for VAT return, the deadline for payment of VAT to the state budget, the rules for VAT reimbursement from the budget State and no additional reporting obligations are imposed.

DAN MANOLESCU - President, The Chamber of Tax Consultants looked at the main fiscal changes and their impact on the Romanian businesses. Regarding the issue of employee contributions, Dan Manolescu said: "It seems that the business environment, mainly the trade unions, begin to consider this measure as being very likely to be implemented and they start expressing concerns. Although this topic has been discussed since this spring season, people are just now beginning to analyse the consequences of this measure." He said that the split VAT system is not seen by the tax expert as a measure to solve the problem of low VAT collection in Romania, the lowest in all EU countries. Also, split VAT will generate high costs with IT systems adjustments, especially for large taxpayers. Dan Manolescu expressed concerns that new regulations would emerge in the next period, amid discussions over next year's budget and finding solutions to diminish the budget deficit.

FLORENTINA ŞUŞNEA - Managing Partner, PKF Finconta presented the news on BEPS, international taxation and local implementation: new reporting requirements in local legislation, the mandatory content of the country-by-country report, and trends in tax security. In conclusion, Florentina Şuşnea said that the OECD, the IMF and the European Commission believe that tax rules need to be simplified at national level, focusing mainly on tax compliance and clarification of the tax law process.
In this respect, three international tax organizations (CFE, AOTCA and STEP) have issued several practices to increase tax security in the single market: setting high standards for tax legislation; strengthening taxpayer rights; resolving tax disputes; increased security - litigation prevention; cooperation at all levels.

MARIA POPA - Tax Manager, PKF Finconta discussed at the conference about the aspects of the practice of tax inspection activity. The following topics were found on the agenda: purchased services whose price is based on the cost of the benefit + the profit margin; management services provided by the parent company; actual services versus adjustment of their value, as well as aspects regarding the deductibility of expenditures with the removal of the fixed assets versus their sale below the unamortised value.

GABRIELA POPESCU - Human Capital Manager, PKF Finconta HR continued the discussion with details about the definition of income from other sources and the conditions for obtaining the tax residence. The main subjects examined included the following: the amendments to Law no. 448/2006 on the protection and promotion of the rights of persons with disabilities and the transfer of social contributions from the employer to the employee.

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About us:
For more than 22 years, PKF Finconta is one of the 10 leading professional services companies in Romania. Since 2006, we are a member of PKF International Limited. PKF International is a leading international business advisory organization. The company grew consistently over the years, forming a Group of four companies: PKF Finconta, PKF Finconta Consultanta, PKF Finconta HR and Finconta Consulting SPRL, members of national professional organizations CECCAR, CAFR, CCFR and UNPIR. We provide a wide range of business advisory and related specialist services. We have seven core areas of expertise and within these areas, we tailor our services to your business and your needs: audit, corporate finance, tax, bookkeeping and accounting advisory services, transfer pricing, payroll and personnel administration and insolvency.

Alina Făniță, CEO
PKF Finconta
Email: alina.fanita@pkffinconta.ro
Phone: +40 21.317.3196
Mobile: +40 768.184.870
Web: www.pkffinconta.ro

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