Profits tax computation and declaration for the 2010 tax year

In respect of the profits tax computation, declaration and settlement for the year 2010, the Ministry of Public Finance’s official position is that all taxpayers - regardless whether they have paid or not the minimum tax up to 30 September 2010 – shall have to submit an annual profits tax return, one for each of the periods:

1 January – 30 September 2010;

and 1 October – 31 December 2010.
Are excepted from this rule, taxpayers  which were not subject to the minimum income tax requirements (such as taxpayers established during the year, foreign legal entities performing activities in Romania through a joint-venture without legal personality, non-profit organisations, etc).
In addition,  taxpayers which are not subject to the auditing requirements in respect of financial statements, must ensure the certification of the two profits tax returns for the year 2010 by a tax consultant.
The introduction of the two tax periods in respect of the tax year 2010 will have certain tax and administrative consequences at the level of the taxpayer, such as: the reduction of the recovery period of tax losses, the restriction of  tax credit for sponsorships performed in 2010, etc. Moreover, it requires a precise cut-off of the revenues and expenses associated with each of the two tax periods and, in general, an additional administrative effort of the taxpayers.

By Venkatesh Srinivasan, Partner – Head of Tax and Legal, Ernst & Young Romania

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