Newsletter April 2018

EMERGENCY ORDINANCE NO. 25 OF 30.03.2018

1.Profit tax

  • For Taxpayers who are subject to profit tax, the obligation to submit an informative declaration regarding the beneficiaries of donations/sponsors/private scholarships is introduced. The deadline for submission of the declaration is 25 March.

2. Micro corporate tax

  • Change option: As of 1 April 2018, microenterprises with a share capital of at least RON 45,000 and employing at least two employees may opt once to be taxed on profits. The option can be chosen starting with the quarter in which both conditions are fulfilled and is final.
  • If the number of employees falls below two, the condition must be fulfilled again within a period of 60 days.
  • An employee in this sense is generally understood to be a person who is employed full-time within the framework of an individual employment contract. This condition is also considered to be fulfilled for microenterprises that
    (a) have persons employed under part-time contracts, if the part-time hours provided for in the contract of employment, added up, comply with a full working norm;
    (b) have concluded management or mandate contracts if the amount of remuneration is at least equal to the guaranteed gross minimum wage.
  • Donations: Microenterprises that make donations in accordance with Law No. 32/1994, i.e. support non-profit and religious institutions licensed and accredited for at least one social service, can reduce their microenterprise tax liability directly by the amount of the donations made. This tax relief applies for the quarter in which the donations were made and up to a ceiling of 20% of the total microenterprise tax owed for the quarter.
  • Donations that could not be deducted from tax because the above ceiling was exceeded can be carried forward over a period of 28 consecutive quarters.
  • Taxpayers who make use of this tax relief are obliged to make an informative declaration regarding the recipients of donations (see also 1. profit tax).

3. Income tax

  • Taxpayers who receive income from employment, intellectual property rights or selfemployed activities subject to withholding tax have the right to redirect 2% of their income tax to support charitable or religious institutions or private scholarships or 3.5% to support licensed and accredited charitable or religious institutions.

4. Value added tax (VAT)

  • Activities carried out within the framework of research, development and innovation projects are no longer subject to VAT if the research results are not transferred to another person. The right to deduct input tax from expenses for the execution of research, development and innovation projects remains unaffected.

EMERGENCY ORDINANCE NO. 18 OF 15.03.2018

1. Income from intellectual property rights

  • The definition of income from intellectual property is supplemented: “Income from any use of intellectual property rights are copyrights and related rights. These include the creation of monumental works of art, patents, drawings and models, trademarks and geographical indications, topographies for semiconductor products and the like“.
  • Persons with severe or acute disabilities are exempt from income tax on income from intellectual property rights.
  • The tax base for the calculation of intellectual property income tax is gross income less a lump sum of 40%. The tax is calculated or paid by the payer of the income on the basis of a tax rate of 10% on the net income thus determined and is final. The possibility of an advance tax payment of 7% no longer applies.
  • Persons who receive income from intellectual property, but also income from salaries or pensions, are exempt from paying health insurance and pension insurance contributions for income from intellectual property rights.
  • The following applies to persons who do not receive any other income from salaries or pensions:
    • If the income from intellectual property rights comes from a single source of income and the estimated net amount is at least the gross minimum wage of 12 months, the payer is obliged to calculate, withhold, pay and report the health and pension insurance in the D112 report. The calculation basis may not be lower than 12 times the gross minimum wage.
    • If the income derives from intellectual property rights from several sources and if the amount to be paid by one or more payers exceeds the minimum of 12 gross minimum wages, the taxpayer must determine, within the framework of a contract concluded with the parties, which payer must assume the obligation to calculate, withhold, pay and report the health and pension insurance for him.
    • If the income from intellectual property rights comes from several sources and none of the payers exceeds the minimum amount of 12 gross minimum wages, the payers have no withholding and reporting obligations. In this case, the taxpayer must submit notification D221 by 15.07.2018 for the year 2018 and by 1.03. in the following years.

EU REGULATION 679/2016 ON THE PROTECTION OF PERSONAL DATA

U Regulation 2016/679 entered into force on 24 May 2016 and will apply directly to all EU Member States from 25 May 2018. It contains numerous clarifications and changes to the privacy requirements of individuals, such as:

  • Data Protection Officer: The appointment of a Data Protection Officer becomes mandatory for public bodies and for companies whose main activity is the regular and widespread processing of personal data or the large-scale processing of special categories of data.
  • Personal data and unique identifiers: it is clarified that online identifiers and location data (IP addresses, mobile device IDs, etc.) are personal data and must be protected accordingly.
  • Consent: The definition of the consent of the person concerned is being extended. The term “expressing the free, specific, informed and unambiguous will of the person concerned, by which he accepts, by declaration or by unambiguous action, that the personal data concerning him/her will be processed”.
  • Conclusion: The regulation focuses on the obligation of companies to comply with the protection of personal data. Companies must assess all cases of processing of personal data in their processes, establish appropriate and consistent rules and, where necessary, obtain the data subject’s consent. Although the Regulation will apply directly in the Member States and does not require the implementation of national legislation, we expect Romanian legislation to be amended in the near future to implement the EU Regulation.