The Government of Romania has approved the decision no. 488 which was issued for the application of the emergency ordinance no. 34 amending the Fiscal Code in relation to profit tax, micro-companies tax and value added tax.
The new provisions are intended to clarify the application of the minimum corporate tax introduced by ordinance no. 34. Taxpayers obliged to pay the minimum tax have to calculate profit tax and minimum tax, compare them and then pay the tax with the higher amount. For the second quarter of 2009, the comparison has to be made between the tax to be paid and the minimum tax for the months of May and June calculated by dividing the annual minimum tax by six.
According to the new rules, the following categories of taxpayers are not subject to the minimum corporate tax. Companies which are temporarily inactive, registered in the Trade Register, do not pay annual minimum tax during the period they were inactive. In addition, taxpayers who were inactive on 1 May 2009 and become active during 2009, and taxpayers for the calendar year they were established do not pay annual minimum tax.
Companies established during 2009 through a reorganisation transaction pay an annual minimum tax from the date of registration at the Trade Register. In order to determine the turnover bracket within which these taxpayers fall, the following rules apply:
In the case of a merger between one or more companies, total annual revenues are determined by adding up the revenues of the merging companies recorded as at 31 December of the previous year. In the case of de-mergers, total annual revenues are determined by using the same proportion as for the value of transferred assets and liabilities.
Revaluation reserves. The new provisions of the Norms clarify the tax treatment of revaluation reserves in balance (i.e. the balance of account 1065) as at 30 April 2009. Such reserves become taxable only when their destination changes (e.g. when distributed in any way to shareholders or used to cover past accounting losses).