Starting from 2015, the famous „tax on poles’ or „tax on special constructions”, introduced a year ago, is reduced from 1.5% to 1% following the publication in the Official Journal no. 24 / January 13, 2015, of the Law approving Government Emergency Ordinance no.102/November 14, 2013, modifying and amending Law no. 571/2003 on the Fiscal Code and the regulation of certain financial and taxation measures.
In accordance with the new legal provisions, which shall enter into force as of January 16, 2015, the „tax on constructions is calculated by applying a 1% quota to the value of the constructions existing in the taxpayers’ property on December 31st of the previous year, registered in the accounting documents under the accounts payable section”, which are not expressly excluded by the law.
The tax on constructions is applicable to Romanian legal persons, except for State institutions, associations, research institutes, and to foreign legal persons carrying out their activities in Romania by means of a permanent registered office, as well as to legal persons with their registered office in Romania, incorporated in accordance with the European law.
The following are deducted from the value of the taxable constructions:
- The value of the buildings for which a tax on buildings is due;
- The value of the reconstruction, modernisation, consolidation, modification or extension works performed on leased, operated or used constructions, which are or which shall be transferred in the State or administrative units’ property
- The value of the constructions listed in the “Earthworks performed on arable lands, orchards and vineyards” section of the Catalogue regarding the classification and normal operation durations of fixed assets, approved by Government Decision no. 2139/2004, as subsequently amended;
- The value of the constructions located outside the Romanian border, including those located in Romania’s adjacent area and in Romania’s exclusive economic area, as set out by Law no. 17/1990 etc., as well as the value of the constructions located on the State’s public domain and which are included in the material and protocol resources, constructions managed by RAAPPS, as well as constructions owned by sports clubs – newly excluded by Law approving Government Emergency Ordinance no. 102/2013, modifying and amending Law no. 571/2003 on the Fiscal Code and the regulation of certain financial and taxation measures.
“The reduction of this tax, whose introduction was largely criticised by the business environment, will ease, although not significantly, the tax burden borne by companies. Although the construction tax expense is deductible when determining the income tax, the fact that companies were put in a position to pay considerable amounts of money was still likely to affect their extension and development plans, especially in the present economic situation”, declared Mrs. Loredana Van de WAART, Partner of the GRUIA DUFAUT Law Office.
It is important to note that, if the value of the constructions mentioned by article 29634 of the Fiscal Code increases or decreases during a year, the tax on special constructions is not recalculated and all value changes are taken into account when determining the tax on constructions due for the next year.
Legal persons must calculate and declare the tax on constructions until May 25 (included) of the year for which the tax is due; the payment will be made in two equal instalments, until May 25 (included) and September 25 (included) of the year for which they are due. Moreover, the law provides that taxpayers who cease to exist in the course of a year must pay such tax until the end of the period during which such entity existed. In exchange, newly-created taxpayers owe the tax on constructions starting from the next fiscal year.
According to public information, budget revenues derived from the payment of this tax in 2014 were over 1.5 billion Lei. Despite the promises made at the end of the year by officials promising that the money obtained from this tax would remain to local administrations, the law article regulating the administration of the tax by ANAF was not changed.