Important amendments made to the tax legislation

Law no. 214 of 31 July 2024 on the amendment of some normative acts, published in the Official Gazette no. 355-356 of 15 August.

The main amendments made to the tax legislation by this Law are the following:

AMENDMENTS THAT ENTERED INTO FORCE STARTING 15 AUGUST 2024:

I. CORPORATE INCOME TAX

• The list of non-taxable income has been extended with the following types of income:
  • the income of resident individuals obtained as capital gains or interest on state securities and/or bonds issued by local public administration authorities. Consequently, withholding income tax mechanism on these types of income will no longer apply;
    
    
  • the income earned from the sale of electricity by resident individuals who produce renewable energy;
    
    
  • the income obtained by the system operator and/or the thermal-energy unit from the free of charge receipt of:
    • lines and electrical stations,
      
      
    • natural gas installations,
      
      
    • thermal networks and/or thermal energy installations.
• The incomes obtained, by taxpayers carrying out a business activity at a price lower than the market price should be adjusted for tax purposes to the market price, if they are obtained from economic transactions with individual founders or other interdependent individuals who do not carry out a business activity.

II. VALUE ADDED TAX AND EXCISE DUTIES

• The settlement of additional costs or revenues resulting from the system balancing, in accordance with the specific legislation, will not be considered taxable object for VAT.

• The list of consumer goods subject to excise duties has been revised by removing fur clothing.

III. TAX ADMINISTRATION

• The period for which the statute of limitations can be extended for determining tax liabilities, as well as for estimating taxable income using indirect methods, has been capped to 6 years.

AMENDMENTS THAT ENTERED INTO FORCE RETROACTIVELY - STARTING 01 JANUARY 2024:

• The special tax regime for economic agents conducting activities in the field of trading ferrous and non-ferrous metal waste, as regulated by Chapter 73 of Title II of the Tax Code, has been repealed.

At the same time, through respective Law were introduced amendments related to transfer pricing as well as other tax amendments that will enter into force starting 01 January 2025 for which we will provide a separate Tax Alert.

This update is accurate to the best of our knowledge at the time of issue.  It is, however, meant as a general guide and comes with the recommendation that professional advice be sought before any action is taken.