2 March 20213 minute read

Amendments to the Romanian Fiscal Code and Accounting Law

The Romanian Government has just approved an Emergency Ordinance amending the Fiscal Code (Law 227/2015) and Accounting Law (Law 82/1991) – Government Emergency Ordinance 13/2021 (GEO 13).

The main changes covered by GEO 13 are as follows:

Fiscal Code
  • expenses related to transactions carried out with partners from countries included on Annex I of the EU list with noncooperative jurisdictions are non-deductible starting with 1 January 2021, only if such expenses relate to transactions with no economic substance;
  • expenses related to transactions carried out with partners from countries included on Annex II of the EU list with noncooperative jurisdictions are deductible when computing the fiscal result starting with January 2021;
  • the employers have the possibility to document the financial support and gifts granted to employees (that qualify as non-taxable from an income tax perspective) through individual employment agreements or internal regulation. The same documentation is also relevant for determining the taxable basis for mandatory social security contributions. These provisions apply starting with the income related to March 2021;
  • the provisions regarding the obligations to compute, declare and pay the mandatory social security contributions for benefits in kind and/ or cash received by Romanian individuals from third parties are correlated so that an unitary framework is available for such items of income;
  • the provisions regarding the applicability of the VAT cash accounting system are amended to accommodate the new threshold of RON4,500,000 to be considered when assessing the applicability of such system;
  • the deadline to submit the statement by the associations with no legal status/ fiscal transparent entities is extended to 15 April 2021. The same deadline is applicable for the appointed representative to send to all members of the partnership the details on taxable income/ net income/ loss corresponding to the share of participation in the partnership.
Accounting Law
  • new provisions cover the obligation of entities that have the effective place of management in Romania to keep accounting books as per statutory provisions;
  • the financial statements, annual accounting reports, consolidated financial statements and interim financial statements need to be kept for a 10 year period;
  • clarifications are brought on the documents that accompany the annual financial statements, standalone and consolidated package, as well as on the financial statements that need to be prepared and submitted with the authorities for cases of merger, spin-off, transformation and liquidation;
  • the provisions regarding the level of fines applicable for not complying with the obligation to prepare and submit the financial statement are amended so as to cover also the obligations related to interim financial statements. These provisions entry into force within 30 days since the date when the GEO 13 was published.
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