Banks, non-banking financial institutions and leasing companies will no longer be able to deduct all interest paid on group loans, according to the emergency ordinance amending the Fiscal Code from January 1 next year, reports local Profit.ro.

Banks have been able to fully deduct their interest expense and exchange rate losses for loans from associates until now.

The government claims to transpose the provisions of a European directive. However, the directive provides that the interest deductibility should be maintained in the special case of financial institutions. The new rules will apply for all companies that pay taxes, but financial institutions will be most affected.

The emergency ordinance has never been under public debate. It was first published on Thursday last week. The Finance Ministry has summoned for today a social dialogue commission to discuss the changes to the Fiscal Code. The amendments could be approved next week.

editor@romania-insider.com