The legislative proposal envisages the introduction of a new tax on constructions, others than buildings.

The new tax will have an impact for many companies, but more significantly for companies from certain industries (e.g. energy, oil&gas, telecommunication, retail, mining, etc.).

It is envisaged that the constructions subject to this tax are those included in Group 1 of the Catalogue regarding classification and normal useful lives of fixed assets (approved by Government Decision no. 2139/ 2004, as subsequently amended).

This Group includes a large number of assets, inter-alia:

- power plants and constructions for electric power transmission

- oil, gas and salt wells

- loading-unloading platforms

- smoke flues and cooling towers

- railroad transportation infrastructure

- road infrastructure, e.g. alleys, streets, parking places, sidewalks, etc.

- light-frame constructions (sheds, etc.)

- aerial telecommunication lines and cables (poles, circuits, cables, cross beams, brackets, etc.)

- metal platforms, towers and pillars for radio-telephony, mobile phones, radio and TV antennas

The construction tax is to be computed by applying a 1.5% rate to the book value of constructions subtracting from that the value of buildings and certain works for which building tax is due.

As per this legislative proposal, the new construction tax provisions will enter into force starting 1 January 2014.

The Ministry of Public Finance will publish, for public debate purposes, the Draft Emergency Ordinance introducing such measures.

Having this public debate in mind, we would be happy to receive your suggestions and questions, and to discuss them with you.

For additional information, please contact:

Venkatesh Srinivasan, Partner – Head of Tax and Legal

Ernst & Young SRL and E. Platis, C. Bazilescu LLLP

15-17 Dr. Ion Mihalache Street

Tower Building , 19th Floor

Sector 1, 011171, Bucharest, Romania

Tel: (40-21) 402 4000, Fax: (40-21) 310 7124

(p) - this article is an advertorial