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Tax alert July 2008

Amendments to the Fiscal Code

The Fiscal Code provisions applicable starting from 1 January 2009 were amended as follows:

- The annual tax losses incurred starting 2009, as declared in the profits tax return, shall be recovered from the taxable profits obtained during the following 7 consecutive years (until then it is 5 years).
- Incomes realised by individuals from the holding and the transfer of bonds issued by the State and/or administrative-territorial units shall be treated as non-taxable investment incomes.
- The withholding tax regime applicable, under the Interest & Royalties Directive and, respectively, the Parent Subsidiary Directive, to interest and royalties and, respectively, dividends obtained from Romania by EU entities shall also apply to entities from EFTA states, respectively, Iceland, Liechtenstein and Norway, under the same conditions.
- As a general rule, dividends distributed by Romanian companies to legal entities resident in other EU member states or in a state member of the EFTA, respectively, Iceland, Liechtenstein and Norway, or to a permanent establishment of an entity from a member state of the EU or EFTA, situated in another member state of the EU or EFTA, are subject to 10% withholding tax.
- Interest from instruments of public debt expressed in local or foreign currency and incomes obtained from trading of bonds issued by the State and by the administrative-territorial units, expressed in local and foreign currency, as well as interest related to the instruments issued by the National Bank of Romania for accomplishing the monetary policy objectives and incomes obtained from trading of securities issued by the National Bank of Romania shall be exempt of withholding tax in Romania.
- The previously applicable exception regarding the reduced vehicle tax applicable to land vehicles from domestic production is repealed.

(Emergency Ordinance 91/24 June 2008 published in Official Gazette 480 dated 30 June 2008) Sursa: http://www.ey.com

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