The tighter taxation bill sketched by the Romanian ruling coalition, a 60-page list of new or higher taxes according to Ziarul Financiar, prompted a fierce reaction from the IT companies’ associations that saw their interests at risk, but also reportedly failed to get the endorsement from the Liberal Party (PNL) that sees its electorate targeted by the measures. 

Among the measures envisaged by the government to bring RON 6bn (EUR 1.2bn, 0.37% of GDP) more taxes to the state budget, there is a 3%-5% tax on the sale of real estate properties of more than RON 0.6mn (depending on the period of time the property has been owned prior to the sale); a 1% annual property tax for owners of real estate properties above EUR 0.5mn or multiple properties owners; limited deductibility of real estate modernisation (50% of actual expenses) and non-productive use of car fuels (25%); a 10% dividend tax levied to resident legal persons; more restrictive regime for microenterprises (including a RON 0.3 mn revenue limit instead of RON 50mn; 10% income tax for the gross revenues of IT employees in excess to RON 10,000 (EUR 2,000) per month; tighter transfer pricing regulations; 10% tax on revenues derived from ceding the utilisation rights for properties; and a 3%-5% tax on the capital gains realised from investments at the stock exchange.

Out of these, three measures are particularly resisted by PNL, namely the tax on capital gains on the stock exchange; increasing the microenterprise taxation; and the higher dividend tax rate.

Liberal Finance Minister Marcel Bolos, an advocate of cutting the tax loopholes, but also the PNL negotiating team, are reportedly under fire from the Liberal Party. 

The fiscal measures outlined in a draft emergency ordinance (OUG) leaked in the media are not final, and some of the proposals have already been rejected in the coalition due to the budgetary impact, PNL sources told G4Media.

The ruling coalition has decided to abandon the increase in dividend tax from 8% to 10% and is still considering introducing an excise duty on products with high sugar content, which makes carbonated drinks as expensive as 30%, according to Profit.ro.

(Photo: Yunkiphotoshot/ Dreamstime)

iulian@romania-insider.com