(Government Emergency Ordinance No. 8 / 2014, published in the Official Gazette No. 151 on 28 February 2014)

The Ordinance brings amendments and completions to several normative acts, including the Fiscal Code and the Fiscal Procedure Code.

These amendments become effective upon their publication in the Romanian Official Gazette with certain exceptions.

Among the most important changes, we mention the following:

Fiscal Code

Corporate income tax

It is specifically mentioned that the revenues obtained from the sale / disposal of shares applies held in a Romanian legal entity by a foreign legal entity are non-taxable only if there is a Double Tax Treaty is concluded between Romania and the seller’s country of residence.

Withholding tax

The Fiscal Code specifically mentions that in case of tax withholdings in excess of the tax rates provided by the relevant double tax treaties, respectively by the European Union legislation, the amount of tax withheld in excess shall be refunded according to the provisions of the Fiscal Procedure Code.

Please refer to the Fiscal Procedure Code section of this tax alert for additional information in this respect.

Income Tax

Amedments were brought for the taxpayers / associations without legal personality that conduct agricultural activities for which the income is determined through income tax quotas. The ones holding agricultural production areas in different localities will choose (through the "tax return from agricultural activities through which the income is determined through income tax quotas") for determining the locality or localities from where they would like to benefit of the non-taxable income limits provided for each products group of vegetal / animal.

VAT

Electronic and communications services – changes applicable starting with 1 January 2015

Place of supply of services

In case of telecommunication services, TV and radio broadcasting services and other services provided through electronic means to a non-taxable person, the place of supply of such services is the place where the beneficiary is established, where it has its stable domicile or residence.

Special VAT regime applicable for electronic services, telecommunications and TV and radio broadcasting services

The special VAT regime applicable to eletronic services supplied by taxable persons not established in the European Union (‘EU’) to non-taxable persons has been extended, being also applicable for telecommunication services, TV and radio broadcasting services.

Moreover, this regime will be applicable to both taxable persons established in the EU (but in another member state than the one in which these services are used) and to taxable persons not established in the EU, as long as the conditions stipulated by this regime are observed.

Excise duties

It has been specified that the excise goods that can be released for consumption means the excise goods meeting the legal conditions for sale.

Upon revocation of the tax warehouse license, a new license may be issued by the competent authority after at least six months from the date on which the revocation becomes effective even if the revocation was contested.

It has been specified that the bonus sales to consumers do not apply in case of excise products which are marked.

There were introduced provisions regarding the selling of excise products to the authorized warehouse keeper for production, excise products which are owned by the economic operators subject to the bankruptcy procedure and do not meet anymore the conditions for commercialization.

Excise duties have been introduced for platinum jewelry or platinum jewelry combined with gold, as follows: - Platinum jewelry or combined with gold of/or above 14K – 2 euro/gram

(P) Tax Flash: Amendments brought to Fiscal Procedure Code

For additional information, please contact:

Venkatesh Srinivasan, Partner – Head of Tax and Legal

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

15-17 Ion Mihalache Blvd.

Bucharest Tower Center Building, 22nd Floor

Sector 1, 011171, Bucharest, Romania

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

Email: office@ro.ey.com

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