A new project to change the Fiscal Code has been put forward, changing the VAT payment threshold for companies at a turnover of EUR 65,000 and limiting the right to deduct the VAT on car purchases.

Romania would thus lift the VAT payment threshold from the current level of EUR 35,000 in turnover to EUR 65,000 (or some RON 220,000) in turnover for companies that have to pay VAT. The measure will decrease the number of VAT payers in the country in order to fight tax evasion, according to the Finance Ministry, which supports the changes.

The Government also decided to cancel the fiscally deductible VAT for cars used exclusively for business purposes, after a similar move in 2009. At the end of last year, the government decided to re-instate the deduction, but only for half of the VAT on car purchase expenses.

Another proposed change is for mediation companies or investment administration companies to calculate and keep the tax for each transaction as anticipated payment. Brokers and fund administrators will be obliged to notify clients in writing about the profit or loss registered, as well as about the tax calculated and kept as anticipated payment, for all transactions during the year until February the next year.

The current tax collection system asks investors on the capital market to calculate and declare quarterly the accumulated gains and pay the tax, also quarterly. Quarterly declarations were introduced in 2010.

editor@romania-insider.com