Newsletter. APEX Team International INFO

Transcription

1 Year 2017, Issue 11 APEX Team International Helesteului Str , District 1 Bucharest Phone: +40 (0) Contents: +40 (0) Fax: +40 (0) E mail: office@apex team.ro Amendment of Fiscal Code for 2018 Initiation of collective negotiation of labor contracts The new national minimum gross salary in 2018 Updating the application norms for cash registers New reporting requirements for multinational groups Tax exemptions for certain categories of buildings Reimbursement of VAT to non EU taxable persons Restitution of taxes and fees paid by the US Government New Accounts in the General Chart of Accounts Access to Virtual Private Space New information in the payment order to the Treasury VAT re registration Assignment of tax receivables Value of meal and nursery tickets Organizing inventory of patrimony Revaluation of land and buildings Closing exchange rates for November 2017 Agenda of December 2017 Social indicators 2017 and 2018 INFO Do not forget that the deadline to submit tax returns and to pay taxes and contributions related to the month of November 2017 is Thursday, the 21 st of December EMERGENCY ORDINANCE 79 dated 8 November 2017 to amend and complement Law 227/2017 on the Fiscal Code (Official Gazette 885/2017) The Ordinance substantially changes the Fiscal Code starting the 1 st of January 2018, which were announced during the month of November through a news flash. As promised, more details about the changes brought to the Fiscal Code may be found within this issue of APEX Team. CORPORATE TAX The first important change is exclusion from applying corporate tax for companies with revenue below EUR 1,000,000 without the possibility of opting for application of the corporate tax regime. These companies should apply regime for micro enterprises. The subject is being widely debated and criticized, with the possibility that it will be changed. Other changes in the area of corporate tax are determined by integrating the Fiscal Anti Evasion Directive into domestic law. 1. Changing deduction regime for financial costs The newly introduced rules replace current limitation system of interest expense according to interest rate and level of indebtedness. Thus, starting in 2018, the concept of excess indebtedness costs is introduced, these costs being expressed as the difference between any indebtedness cost (interest, exchange rate differences, capitalized interest and others) and income obtained from interest and other equivalent income from an economic point of view. An annual floor of EUR 200,000 is defined, under which indebtedness costs are deductible. In case indebtedness costs exceed the threshold of EUR 200,000, such costs will be deductible when corporate tax is calculated, within the limit of 10% of the calculation basis. Calculation basis = Total Income Total Expense Non taxable Income + Corporate Tax Expense + Excess Indebtedness Costs + Deductible Amounts representing tax depreciation. Excess indebtedness costs that are not deductible may be carried forward for an undetermined period. In case the calculation basis is zero or has a negative value, excess indebtedness costs not deductible when corporate tax related to the reference tax period is calculated, but they may be carried forward for an unlimited period of time. Rules to limit interest deductibility also apply to financial institutions, but not to independent entities (entities that are not part of a group consolidated for financial purposes and that do not have associated companies and permanent establishments) which may fully deduct excess indebtedness costs during the reference period. The new rules will also apply to interest and exchange rate losses, carried forward from the past and accumulated through the 31 st of December New rules on transfer of assets out of Romania (exit taxation) According to new rules, the transfer of activity carried out by a permanent establishment, transfer of assets or ownership of residence from Romania will subject to corporate tax in Romania. The taxable basis is represented by the difference between the

2 All companies having annual income below EUR 1 mil will be micro -enterprises from January 1, 2018 Page 2 market value of assets transferred and their fiscal value. 3. General anti-abuse rule Anti-abuse rules already existing in the Fiscal Code (art. 11) are strengthened. Thus, for the purpose of calculating fiscal obligations, no action and no series of actions will be taken into consideration if they are not considered honest, keeping in mind all facts and relevant circumstances. The definition continues, stating that an action or a series of actions are considered dishonest if it is not undertaken for valid commercial reasons reflecting economic reality as provided for in art Rules on controlled foreign companies (CFC) New rules are introduced on taxation of controlled foreign companies. An entity is considered to be a controlled foreign company if following conditions are cumulatively met: a) the taxpayer, alone or together with its associated companies, holds: ο direct or indirect participation of more than 50% of voting rights OR ο directly or indirectly owns more than 50% of equity capital OR ο has the right to receive more than 50% of profit of respective entity. AND b) the tax on income effectively paid on profit by the company or permanent establishment is lower than the difference between the corporate tax that would have been charged for the company or permanent establishment, calculated according to provisions regarding corporate tax in Romania and the corporate tax effectively paid on profit by the entity or by the permanent establishment. Therefore, a taxpayer should include its proportional share of the controlled foreign company s income in taxable profit. The following categories of income are included: interest or any other income generated by financial assets; royalties or any other income obtained from intellectual property rights; dividends and income from transfer of ownership shares; financial lease income; income from insurance activities, bank activities and other financial activities; income obtained from goods and services purchased from associated companies and sold to independent third parties without any added economic value or at a reduced value. TAX ON MICRO-ENTERPRISES INCOME The threshold to apply micro-enterprise taxation regime increases from the RON equivalent of EUR 500,000 to EUR 1,000,000 (calculated at the exchange rate of the 31 st of December of the closed year). Exceptions in force under which certain companies did not qualify as micro-enterprises have been repealed. Thus, there is no possibility to opt for the corporate tax regime, which is currently available to those with minimum share capital of RON 45,000. At the same time, there is no restriction on applying the micro-enterprise tax regime by those registering more than 20% of income obtained from advisory and management activities. As a consequence, all companies, including companies obtaining at least 20% of their income from advisory and management activities, companies with a minimum share capital of RON 45,000 or companies operating in the following sectors: banking, insurance, capital markets, gambling, oil and natural gas development will be considered micro-enterprises if their income for the year ended 31 st December of the previous year does not exceed the RON equivalent of EUR 1,000,000. TAX ON INCOME Taxation rate decreases from 16% to 10%. The application sphere does not change. Taxation of income obtained from dividends is maintained at a 5% rate. The new provisions are applicable for income obtained and expenses incurred starting the 1 st of January 2018, as well as for income obtained from salaries, similar income and income obtained from pensions related to the month of January 2018.

3 Income obtained from salaries Gross monthly income obtained from salaries, for which full personal deduction is granted, is increased to RON 1,950. Personal deduction gradually phases out for monthly gross wages between RON 1,951 and RON 3,600. In order to qualify as dependent (person under care), both taxable and non-taxable income of the respective person should not exceed RON 510 per month. Income obtained from intellectual property rights Taxation rates are decreased as follows: from 10% to 7%, to set payments in advance, paid to the account for annual taxes; from 16% to 10%, to set income tax as final tax. In this case the calculation basis is represented by gross income from which the flat-rate expense is deducted. Income obtained from independent activities Recalculation of net income from independent activities, determined in real system, will be performed by the tax authority by deducting social insurance contribution from annual net income. Annual form 205 A tax form will also be submitted for income obtained from capitalizing on any form of intellectual property rights, agricultural rent, as well as for income obtained from associations without legal personality. Declaration of these types of income were exempted as provided by the Fiscal Code. Thus, the obligation to submit a statement on the calculation and withholding of tax for each beneficiary of income of the current year for the previous year by the last day of February, inclusive, is reintroduced. SOCIAL CONTRIBUTIONS 1. Social contributions owed for income obtained from salaries Social insurance contributions (CAS) percentages are: 25%, for normal work conditions, integrally deducted from employee s gross salary; 25% + 4%, for particular work conditions, 25% deducted from employee s gross salary and 4% paid by employer; 25% + 8%, for special work conditions, will be 25% deducted from the employee s gross salary and 8% paid by employer. Social health insurance contribution (CASS), 10% will be entirely deducted from gross salary of employee. Employment insurance contribution (CAM), 2.25% will be borne by the employer and the monthly base of the contribution is total gross income obtained from salaries and similar income. CAS and CASS owed by individuals on the basis of an individual contract, full- or parttime, may not be less than the level of social contributions applicable to minimum country gross salary in force during the month for which the social contributions are due, corresponding to the number of working days of the month during which the contract was active, with some exceptions (pupils/students up to 26 years of age, apprentices up to 18 years of age, people with disabilities etc.). 2. Social contributions owed for income obtained from independent activities Social Insurance Contribution (CAS) Social insurance contribution owed by persons carrying out independent activities is calculated by applying the 25% quota to an income chosen by the taxpayer, to at least equal to minimum gross salary set for the country. Persons whose monthly net income obtained during the previous year/estimated or set according to income quotas is below the minimum gross salary do not owe social insurance contribution, but they may opt to make this payment. Social health insurance contribution (CASS) Person obtaining income from independent activities (authorized self-employed individual PFA, liberal professions, etc.) will owe 10% CASS if the total annual amount of income obtained from the sources mentioned below, amounts to at least the value of 12 minimum gross salaries (does not accumulate with income obtained from salaries): income obtained from independent activities, including income obtained from copyrights; Page 3 Important changes in the taxation of salaries from January 1, 2018

4 Pension and health insurance contributions will be in employee's charge from January 1, 2018 Page 4 income obtained from association with a legal entity; income obtained from rental activities; income obtained from investments; income obtained from agricultural activities, forestry and fish breeding; income obtained from other sources. The monthly basis for calculating the contribution is minimum gross salary in force during the month for which the contribution is owed. Individuals owing the contribution must submit a statement regarding monthly threshold of the income obtained to the competent tax authority, by the 31 st of January of the year for which the social health insurance contribution is established, on an annual basis. 3. Oher provisions on CASS The exemption from payment of social health insurance contribution (CASS) for income obtained from investments or other sources earned by persons who obtain other revenue (salaries, pensions) is eliminated. New categories of individuals exempted from payment of social health insurance contribution are added (e.g.: individuals benefiting from social aid, persons who execute a prison sentence, monastic personnel of recognized religions). The provision on exemption from payment of CAS/CASS by persons obtaining income from both independent activities and salaries is not approved. As a result, an authorized self employed individual obtaining income from salaries should also pay CAS/CASS for income obtained as a PFA, but the calculation base will be the minimum gross salary (or, for CAS, the income level selected). New provisions apply to income obtained starting the 1 st of January For income related to periods prior to the 2018 financial year, mandatory social contributions are those in force during the period related to the respective income. VALUE ADDED TAX Only after providing all means of proof provided by the law, may tax authorities deny VAT deduction to economic agents if they can demonstrate beyond any doubt that the economic agent knew or should have known that the respective transaction was subject to VAT fraud, occurring upstream or downstream of the transaction chain. The new provision adopts CEJ Cause no. C 101/16 Paper Consult. EMERGENCY ORDINANCE 82 dated 8 November 2017 to amend and complement certain normative acts (Official Gazette 902/2017) The Ordinance introduces derogation to Social Dialogue Law 62/2011 that should be applied during the period 20 November 20 December It is mandatory to initiate collective negotiation in companies where there is no collective contract/collective agreement in order to implement provisions of GEO 79/2017 (on the transfer of social contributions from employer to employee), mandatory initiation regardless of the number of employees the company has. The employer has the obligation to start negotiations. If employees did not form a union, negotiations take places with the employee representatives. In this regard, the employer should ask employees to appoint their representatives. The results of meeting(s) with employee representatives are written in a meeting minutes report, regardless of whether or not negotiations will continue. The employer should meet the obligation to initiate collective negotiation so that in case of an audit, it may prove achievement of this obligation with supporting documents. It is also mandatory the collective negotiation of additional acts/addendums to collective agreements and collective labour contracts in force. Failure to meet these obligations between 20 November and 20 December 2017 constitutes a contravention and is sanctioned with a fine of between RON 5,000 and RON 10,000. Other legal changes Starting the 1 st of July 2018, the value of a pension point increases by 10% to RON 1,100. Starting the 1 st of January 2018, contribution rate for privately managed pension funds is 3.75%. Monthly compensation granted to raise children Monthly compensation granted to raise children is 85% of average net salaries obtained

5 during 12 months within the 2-year period preceding date of birth. Minimum monthly compensation granted to raise children may not be less than the amount resulting from multiplication of the social reference indicator by 2.5, and the maximum amount may not exceed RON 8,500. The social indicator is currently set at RON 500. The amount of monthly compensation is increased with the amount resulting from applying a multiplication coefficient of 2.5 to the social indicator for each child born as a twin, triplets or multiple births from one pregnancy, starting with the second child of such a birth. DECISION 846 dated 29 November 2017 to set national minimum gross wage with payment guaranteed (Official Gazette 950/2017) Starting the 1 st of January 2018, national minimum gross wage with payment guaranteed is set at RON 1,900 per month for a full-time work schedule of hours on average per month in 2018, representing RON 11.40/hour. Currently, national minimum gross wage with payment guaranteed is RON 1,450. Setting the base salary below the provided level represents a contravention to be sanctioned with a fine of between RON 300 and RON 2,000 for each individual labour contract eligible for the minimum wage set per this Decision, as far as, according to the law, it does not constitute a violation/criminal offence. DECISION 804 dated 8 November 2017 to amend and complement Methodological Norms to apply GEO 28/1999 on obligation of economic operators to use electronic fiscal cash registers, approved by Government Decision 479/2003 (Official Gazette 907/2017) The Decision changes application norms regarding obligation to use electronic fiscal cash registers (AMEF). Basically, new technical requests for electronic fiscal cash registers and new elements on the receipt/fiscal bill are introduced, which will become mandatory starting The main changes are: AMEF should contain its own tax module which controls the operations specific to the taxable activity, as well as a communication module that may connect to an informatic/digital system of ANAF to monitor and supervise; validity term for authorization to distribute AMEF is increased from 3 to 5 years; the receipt/fiscal bill will have the following mandatory elements: VAT code of the beneficiary, unit of measurement and payment modality; The number of and total value of discounts, price increases, cancellations, operations carried out while printing the receipt/fiscal bill, as well as sub-total by payment modality used by the device, except for taxi services, will be registered on the daily closure report. Implementation of the National Record Register for Electronic Fiscal Cash Registers should create the premises for de-bureaucratization in relation to cash register procedures performed (taxation, sealing, change of fiscal memory or electronic journal, repairs, etc.), the cash registers being electronically registered. ORDER 3049 dated 24 October 2017 to approve template and content of form Country by Country Report (Official Gazette 894/2017) The Order approves template and content of form Country-by-Country Report (CbC report). Basically, the Order completes regulations of GEO 42/2017 on the mandatory automatic exchange of information in the fiscal field. Objective The form is used to report the allocation, within a group of multinational enterprises, of income, taxes and economic activities for each individual tax jurisdiction. The form is submitted starting with the fiscal year 2016 and will be transmitted to the competent tax authority within 12 months from the last day of the reporting fiscal year of the multinational enterprise group. Provisions to submit a country-by-country report form also apply to taxpayers which opted for a fiscal year different from the calendar year according to law. Page 5 The new minimum gross salary becomes RON 1,900 from January 1, 2018

6 New reporting requirements for multinational groups Page 6 Report structure Main categories of information included in the Country by Country Report are: Identification data of the taxpayer having fiscal residence in Romania; Identification data of the multinational enterprise group; General presentation of allocation of income, taxes and economic activities for each tax jurisdiction; List of all the legal entities of the multinational enterprise group included in each aggregation; as well as Any other additional information considered necessary to make the entire reporting process easier. Notification obligations Each legal entity of a multinational enterprise group having fiscal residence in Romania, in its quality within the multinational enterprise group, has the obligation to communicate its identity and fiscal residence to the tax authority. The Order includes a template for this notification. Deadline The deadline to submit the notification will be no later than the last day of the reporting fiscal year of the multinational enterprise group, but no later than the deadline to submit annual corporate tax returns for the respective legal entity for the previous fiscal year. Submission The notification should be submitted to the competent tax authority in PDF format with an attached XML file on a CD, along with the notification on paper, signed according to law, or transmitted by electronic means of remote transmission. The provision also applies to legal entities of a multinational enterprise group which have their fiscal residence in Romania and are required to pay the specific tax. As a reminder: On the 9 th of June 2017, the Government of Romania adopted the Emergency Ordinance 42/2017, introducing in Romania obligations of the Country-by-Country-Report, adopting provisions of Directive (EU) 2016/881 dated the 25 th of May Provisions of domestic law are generally in line with the EU Directive, but there are also some specific clarifications. These provisions have an impact on Romanian entities that are the ultimate parent company of a group of multinational enterprises with total consolidated income of more than or equal to EUR 750 million as well as other Romanian entities that are part of a multinational enterprise group, but is not necessarily the ultimate parent company. A summary of the reporting and notification obligations is included below. Reporting obligations In conformity with the new provisions, an entity with fiscal residence in Romania, which is the ultimate parent company of a multinational enterprise group with total consolidated income of more than EUR 750 million and has the obligation to prepare consolidated financial statements should submit to the competent tax authorities in Romania a CbC report within 12 months from the last day of the reporting fiscal year of the multinational enterprise group. Also, Romanian legislation allows submission of the Country-by-Country Report by a socalled surrogate parent company. An entity having fiscal residence in Romania may be designated by the group of multinational enterprises as the sole substitute for the ultimate parent company to present the report for each country. In addition, other entities residing in Romania will be required to submit CbC reports if they meet one of the conditions below: the ultimate parent entity of the group does not have an obligation to file a CbC report in its own jurisdiction of tax residence; the jurisdiction in which the ultimate parent entity is resident for tax purposes has a current international agreement to which Romania is a party but does not have a qualifying competent authority agreement in effect, where Romania is a party to the agreement; there is a persistent failure in the automatic exchange procedure with the competent

7 authority of the ultimate parent company required to file CbC reports. According to the new provisions, failure to submit the CbC report for each country is sanctioned with a fine of between RON 70,000 and RON 100,000, while delayed submission of the report or transmission of incorrect or incomplete information is sanctioned with a fine from RON 30,000 to RON 50,000. Obligation to notify Entities residing in Romania that are part of a multinational group of enterprises should notify the competent Romanian authorities whether they are the ultimate parent entities, surrogate parent entities or entities designated to submit CbC report. Alternatively, the entity residing in Romania should inform the tax authorities in Romania of the identity and fiscal residence of the reporting entity. The deadline for notification is the last day of the reporting fiscal year of the group of multinational enterprises but no later than the deadline to submit the tax return of the constitutive entity for the previous fiscal year. LAW 209 dated 3 November 2017 to amend and complement Law 227/2017 on the Fiscal Code (Official Gazette 875/2017) Starting the 1 st of January 2018, buildings classified as monuments and having its street façade renovated or rehabilitated, including surrounding land, are exempted from tax. Local councils may decide to grant tax exemptions for other buildings classified as monuments and related land. ORDER 3159 dated 1 November 2017 to approve Procedure to solve VAT reimbursement claims filed by taxable entities not registered under the scope of VAT which are not obliged to register under the scope of VAT in Romania, not settled on the European Union territory as well as to approve template and content of certain forms (Official Gazette 892/2017) The Order approves approve Procedure to solve VAT reimbursement claims made by taxable entities not registered under the scope of VAT, entities which are not obliged to register under the scope of VAT in Romania, not settled on the European Union territory. It also approves the necessary forms: form 313 Claim for reimbursement for taxable entities not registered and not obliged to register under the scope of VAT in Romania, not settled on the European Union territory. Decision for VAT reimbursement for taxable entities not registered and not obliged to register under the scope of VAT in Romania, not settled on the European Union territory. The reimbursement claim is submitted by taxable entities that are not registered and not obliged to register under the scope of VAT in Romania, and not settled on the European Union territory, for reimbursement of the tax invoiced by other taxable entities for tangible movable items that were delivered or for services that were provided for their benefit in Romania, as well as the tax related to the import of goods in Romania. The claim should refer to a period of at least 3 months or at most one calendar year or for a period of less than 3 months remaining in the calendar year. The submission deadline is up to 9 months from the end of the calendar year when the tax becomes chargeable. The claim is submitted electronically at: registry office of the central competent tax authority; post office, by registered mail. The electronic form, submitted on electronic support will include the form completed by the applicant using the assistance programme developed by the Ministry of Public Finance, which will be signed by the applicant. To benefit from VAT reimbursement, the taxable entity should meet the conditions provided by point 74 para. (1) of Methodological Norms and to designate a representative in Romania for reimbursement according to point 74 para. (5) from the same norms. The representative for reimbursement/taxable entity not settled on the territory of the European Union using the special regime for electronic, telecommunication, radio or TV services provided by art. 314 from the Fiscal Code claims the reimbursement of the val Page 7 Pay attention to the notifying obligation of Romanian entities that are part of multinational groups

8 A new VAT reimbursement procedure to non EU taxable persons Page 8 ue added tax by preparing and submitting form 313, Claim for reimbursement for taxable entities not registered and not obliged to register under the scope of VAT in Romania, not settled on the European Union territory, code MFP /13, provided by annex no. 2 of the Order. The representative for reimbursement should register the power of attorney with the central tax authority in whose evidence it is already registered as taxpayer. For fiscal registration, the representative for reimbursement will submit the fiscal registration statement to the central competent tax authority. The fiscal registration code assigned to the representative will only be used for the VAT reimbursement to the legal entity, not settled on the territory of the European Union, being represented. Supporting documents proving that the entity is engaged in an economic activity that would lead it to be considered a taxable entity according to conditions mentioned at art. 269 from the Fiscal Code, if it had been settled in Romania, as well as statements in a foreign language that will be accompanied by authorized translations in the Romanian language. The claim will be decided on within 6 months from the date when, together with the necessary documents, it is received by the competent central tax authorities. ORDER 3199 dated 3 November 2017 to approve Procedure to reimburse taxes, custom duties and other taxes paid by the Government of the United States of America, its personnel, contractors and contractors personnel (Official Gazette 884/2017) The Order approves Procedure to reimburse taxes, custom duties and other taxes paid by the Government of the United States of America, its personnel, contractors and contractors personnel. The persons and entities who may claim the reimbursement of taxes, custom duties and other taxes paid by them for equipment, supplies, materials, technology and other services provided by the agreement concluded between the two states, are: a) the Government of the United States of America; b) the personnel of the Government of the United States of America; c) contractors; d) contractors personnel. VAT reimbursement is performed within 45 days from the date the claim was filed, and the decision is issued, subsequent to verification of the submitted file. ORDER 2827 dated 30 October 2017 to complement certain accounting regulations (Official Gazette 873/2017) The Order adds specific accounts for VAT split payment to the general chart of accounts: 5126 Bank accounts in RON split VAT (A); 5127 Bank accounts in foreign currency split VAT (A). ORDER 3289 dated 16 November 2017 to amend and complement ANAF Presidential Order 3846/2015 to approve procedures to apply of art. 92 of the Fiscal Procedure Code, as well as to approve template and content of certain forms (Official Gazette 929/2017) The Order brings changes to procedure to declare inactivity of a taxpayer. According to the Fiscal Procedure Code, the taxpayer is declared inactive if it finds itself in one of the following situations: a) it did not comply with any declarative obligations set by law for a half year period; b) it has been shielded from tax inspection by declaring identification data regarding their registered address which has not been located by tax authorities; c) central tax authority notices that the entity does not operate at the registered fiscal domicile; d) temporary inactivity recorded at the Trade Register; e) company operation period has expired; f) the company no longer has statutory bodies; g) the period to hold the space used as headquarters has expired. The taxable entity declared inactive is re activated if the following conditions are cumulatively met:

9 a) meets all its declarative obligations provided by the law; b) does not have any outstanding fiscal obligations; c) central tax authority finds that the taxable entity carries out activity at the declared fiscal domicile. The changes brought to the Order are referring to: inclusion within the content of inactivity: procedures on reporting process for inactive taxpayers, correction of material errors and re activation of taxpayers declared inactive by enforcement authorities; update of procedure to re activate taxpayers declared inactive, as well as forms used to re activate taxpayers declared inactive according to the new provisions of the Fiscal Procedure Code brought by GEO 84/2016. ORDER 3312 dated 20 November 2017 to repeal ANAF Presidential Order 230/2013 to approve the Procedure to access information included in the fiscal record, available to taxpayers on ANAF webpage, in the taxpayer private space (Official Gazette 926/2017) The Order repeals the procedure of electronic access to information in the fiscal record (fiscal status vector fiscal, situation on statement submission, payment statements) by submitting form 152 Application to use a digital qualified certificate. Electronic access to fiscal record is made according to provisions of OMPF 660/2017 to approve Procedure on communication through electronic means between the Ministry of Public Finance/central tax authority and individuals, legal entities and non governmental organizations. Thus, the communication is carried out by electronic means using Virtual Private Space (SPV) offered through the ANAF portal ( ORDER 2998 dated 15 November 2017 to amend and complement Order of the Minister of Public Finance 246/2005 to approve Methodological Norms to use and prepare payment order for the State Treasury (OPT) and multiple electronic payment order (OPME) (Official Gazette 919/2017) The Order modifies Methodological Norms to use and prepare payment order for the State Treasury (OPT) and multiple electronic payment order (OPME). Thus, a unique number known by the payer should be written in the Document no. field in the electronic document, and should not be repeated during the subsequent 24 hours. ORDER 3300 dated 16 November 2017 to amend and complement ANAF Presidential Order 2011/2016 to approve Procedure to register upon request under the scope of VAT according to provisions of art. 316 para. (12) of Law 227/2015 on the Fiscal Code, as well as to approve template and content of certain forms (Official Gazette 938/2017) The Order modifies re registration procedure under the scope of VAT following the ex officio cancellation performed by ANAF, in order to include recent changes to the Fiscal Code. The following forms are changed: Report on solving application to register under the scope of VAT submitted according to art. 316 para. (12) of the Fiscal Code; Form 099 Application to register under the scope of VAT, according to art. 316 para. (12) of the Fiscal Code; Decision regarding rejection of application to register under the scope of VAT, according to art. 316 para. (12) of the Fiscal Code. ORDER 3357 dated 23 November 2017 to approve Procedure on transfer of the right of restitution/reimbursement of tax receivables (Official Gazette 931/2017) According to provisions of art. 28 of the Fiscal Procedure Code, tax receivables regarding taxpayer s rights to reimbursement/restitution may only be transferred subsequent to being set through a restitution decision. The transfer produces effects to the tax authority only from the date when the tax authority was notified. Page 9 Changes in the procedure of inactivation and reactivation of taxpayers

10 New accounts for VAT split payments have been added to General Chart of Accounts Page 10 The notification for transfer of the restitution right, as provided by the Order, is submitted by the assignee to the tax authority administering the assignor, accompanied by a copy, in conformity with original, of the transfer contract. Subsequent to notification, the tax authority managing the assignor becomes the debtor for the assignee, the assignor having no claim on the budget related to the amounts subject to the transfer. The object of transfer may only be the amounts to be effectively returned to assignor, after any possible compensation. After the compensation, the tax authority administering the assignor requests in writing from the tax authority administering the assignee the situation of the outstanding fiscal obligations registered by the assignee. If the assignee does not register any outstanding fiscal obligations, the tax authority of the assignor proceeds to restitution of the approved amount in the account specified in the submitted notification to the assignee. ORDER 3004 dated 16 November 2017 to approve Procedure to solve appeals provided by art. 366 para. (2), art. 369 para. (5), art. 374 para. (2), art. 377 para. (4), art. 382 para. (2), art. 385 para. (4), art. 390 para. (2) and art. 393 para. (4) of Law 227/2015 on the Fiscal Code (Official Gazette 937/2017) According to provisions of art. 366 of the Fiscal Code, in the case where the competent authority (DGRFP) denies the request to authorize a place as a fiscal warehouse, the person submitting the request may appeal this decision, according to provisions of the law on the administrative complaints. The Order regulates the procedure to appeal in these situations. ORDER 1852 dated 25 October 2017 to set indexed nominal value of a luncheon ticket for the second half of 2017 (Official Gazette 935/2017). The Order maintains the maximum value of a luncheon ticket to RON ORDER 1851 dated 25 October 2017 to set monthly indexed amount which is granted in the form of nursery vouchers for the second half of 2017 (Official Gazette 935/2017) Starting the month of November 2017, the value of the monthly indexed amount granted as a nursery voucher is RON 440. ORDER 3077 dated 27 October 2017 to approve standard form, Minutes report on finding and sanctioning contraventions used by the staff for fiscal information activity, empowered by ANAF (Official Gazette 901/2017) The Order approves standard form, Minutes report on finding and sanctioning contraventions. ORDER 3076 dated 27 October 2017 on template and content of forms used in the activity of verifying taxpayers by fiscal information structures/bodies (Official Gazette 911/2017) The Order approves template and content of forms used in the activity of auditing taxpayers by fiscal information structures/bodies: Service Order; Invitation to headquarters; Request to provide information/written records; Statement; Minutes report; Sent/Receipt minutes report of written records; Notification. REMINDER Organizing and conducting inventory of patrimony Order 2861 dated 9 October 2009 (Official Gazette 704/2009) has established the legal framework and procedural documentation which is prepared when inventory of the enterprise s patrimony is performed. Companies must issue internal procedures regarding inventory which are approved by the company Director. Provisions of the present Order apply to persons who obtain income from independent activities and who must as per law organize and maintain simple entry bookkeep

11 ing. In accordance with Accountancy Law 82/1991, republished, companies must perform an inventory of items with the nature of assets, liabilities, equity at inception of activity which they control, at least once during the financial year while carrying out its business, in case of merger or termination of business, as well as in other circumstances. All elements having the nature of assets are placed under the responsibility of a keeper or are used by employees or company Director(s). As per Accounting Law, entities which have a financial year different from the calendar year organize and perform an annual inventory in such a manner that the outcome of the inventory is included in the financial statement prepared for the year end that was chosen. In case of stock count in warehouses during the year, the amount of inventory existing at the date of performance is disclosed in the Inventory Register and is mentioned on inventory lists which are updated with the entries and stock releases which occur in the period between the stock count date and year end. INVENTORY COMMITTEE The inventory of items having the nature of assets, liabilities and equity is performed by an inventory committee which is appointed by a written resolution of the company Director. In the designation resolution, it is mandatory to indicate the composition of the committee (name of the President and committee members), mode of performance of the inventory, inventory method used, warehouse subject to inventory, as well as inception and completion date of inventory operations. The warehouse keeper in charge of the warehouse subject to inventory, the accountant who tracks inventory for this warehouse, internal auditors and statutory auditors cannot be appointed members of the inventory committee. In case the entity has no employees, the Director is in charge of performance of the inventory. ITEMS HELD BY THIRD PARTIES Inventory lists including items which belong to third parties are transmitted to the natural or legal, Romanian or foreign persons to which the items belong within 15 working days after completion of the inventory so that the owner may communicate any discrepancies within 5 working days starting the date the inventory lists are received. Leasing companies must provide lessees/users with inventory lists regarding items representing the object of the contract. Based on information included on these lists, the leasing company can calculate and register adjustments regarding depreciation of assets or financial assets, if applicable. In case the lessee/user does not provide inventory lists to the leasing company, the leasing company can record adjustments regarding depreciation of these items on the basis of market prices available at the inventory date, taking into account features of the item which represents the object of the lease (year of manufacture, useful life). In this respect, entities which hold items must conduct a stock count and communicate the inventory lists for confirmation, just as the owners of these items must request confirmation of items held by third parties. Not receiving a confirmation of the existence of items held by third parties does not represent tacit confirmation. CONFIRMATION OF BALANCES Receivable and payable balances are subject to verification and request for confirmation of the closing balances of receivables and payables with significant weight in these accounts using the "Statement of account" form (code ) or by written reconciliation. Breach of these procedures as well as refusal to confirm represent an infringement against the present Norms and is punished as per law. Cash at bank or at State Treasury in the entity books are reconciled with closing balances as per bank statements. For this purpose, bank statements as at 31 December or the last banking day, provided by the banks and State Treasury, will bear their official stamp. In case the entity has opted as per provisions of Law 82/1991, republished, for a financial year other than the calendar year, information regarding the last day of the chosen financial year will then be taken into account. INVENTORY LISTS Each page of the inventory list is signed by the President and inventory committee mem Page 11 Annual inventory count - a hot topic

12 Pay attention on drafting inventory count lists Page 12 bers, by the warehouse keeper as well as by experts the inventory committee whom the President has asked to participate in the identification of items subject to inventory. In case the elements having the nature of assets are subject to inventory using electronic methods of identification (for example: bar code reader, etc.), data being directly transmitted into the financial and accounting management system, the inventory lists are issued directly by the IT system. Comprehensive lists are printed with all captions subject to inventory or in a selective manner only for captions for which differences in quantity or in value (devaluation) were found, if applicable. In case the inventory lists are only printed for the unique inventory items for which differences in quantity or in value were found, comprehensive inventory lists are kept in a magnetic format for the legal conservation period of such documents. In this case, the valuation of items to determine eventual adjustments is performed by analysis of all items subject to inventory and not only on those for which differences in quantity were found. Partial stock counts, as well as stock counts performed during a year when the entity performs several stock counts, are performed in accordance with the present Norms, except for maintaining the "Inventory Register" (code ) which is completed at the time of the annual inventory. INVENTORY DIFFERENCES ADJUSTMENTS / ATTRIBUTABLE / BALANCES For all differences in plus or in minus, impairments to items found at the time of the inventory and losses subsequent to confirmation of receivables, the inventory committee requests written explanations from persons in charge of keeping the items, collecting receivables, etc. in order to establish the nature of missing quantities, losses, damages and impairments which were found as well as the provenance of excess quantities and make accounting entries in accordance with legal provisions regarding the modality to adjust the accounting data with factual data which result from the inventory. In case of missing quantities which the warehouse keeper is liable for, the Director must charge them to the responsible person at replacement cost or at a value set by an expert committee in case these items cannot be purchased on the market. To determine the applicable amount, in case missing quantities do not represent infractions, the possibility to balance missing quantities with quantities in excess is taken into account if the following conditions are met: There is a risk of confusion between the types of tangible items due to their similarity regarding their external aspect: colour, design, model, dimensions, packaging or other features; The differences found in plus or in minus refers to the same period and the same warehouse. A balance is not admitted when it is proved that the missing quantities found at the time of the inventory come from subtraction or impairment of items performed by persons who are responsible for keeping these items. Lists disclosing the type of goods, merchandise, packaging and other tangible items which meet conditions for balancing excess and missing quantities due to the risk of confusion are approved annually by the Director, the head of the public entity or the person who is responsible for management and are used for internal purposes within the entity. Balancing is carried out for offsetting quantities between quantities in excess and missing quantities. Equalizing quantities is performed by starting with items with the lowest unitary cost and in increasing order. Items which fall in weight/length/volume categories are admissible. In cases of balancing between quantities in excess and missing quantities, decreases are only computed when missing quantities are greater than quantities in excess. In this situation, decreases first apply to items for which missing quantities were found. The Norms afferent to admissible limits for perishable items or internal norms in this respect do not apply by anticipation, but only after, and up to the limit of, missing quantities found. The limits for perishable items do not automatically apply, being considered upper limits. INVENTORY OUTCOME The outcome of the inventory is disclosed in minutes drafted by the inventory committee which includes:

13 date prepared; names and surnames of members of the inventory committee; number and date of the resolution for appointment of the inventory committee; warehouse(s) subject to inventory; inception and completion date of inventory operations; results of inventory; conclusions and proposals of inventory committee regarding causes of quantities in excess and missing quantities found at the time of the inventory and persons liable for losses, as well as proposed corrective measures to be taken; volume of impaired inventories, inventory without movement or slow-moving stock, items which are difficult to sell, without assured disposition and proposed measures to reintegrate them in the economic circuit; proposals to write off tangible and intangible fixed assets; proposals to withdraw low inventory balances from use and for impairment of or writing off inventory; findings regarding conservation, warehousing, safety, assurance of entirety of items in patrimony as well as other matters related to activities of the warehouses which were subject to inventory. The proposals comprised in the minutes of the inventory committee are presented to the Director within 7 working days after completion of the physical inventory counts. The Director will decide the measures to be taken, in coordination with the head of the accounting and finance department and the head of the legal department in accordance with legal provisions. INVENTORY REGISTER In case the inventory is performed during the year, data resulting from the physical inventory are updated with entries and releases for the period from the date of inventory and the date for closing the financial year, the updated data being noted in the inventory register. Completing the inventory register is made at the time all balances of all the balance sheet accounts are finalized including those related to corporate tax and adjustments for depreciation or impairment, if any. The inventory register may be adapted to the specifics and internal requirements under the condition that mandatory minimum information is disclosed. Results of the inventory must be recorded in the evidence kept for tracking operations within the 7 working days from the date of approval of the minutes of inventory by the Director. REMINDER REVALUATION OF LAND AND BUILDINGS The accounting law does not oblige enterprises to revalue land and buildings every 3 years. From an accounting point of view, the European Directive and implicitly IAS 16 rules apply and there is no provision regarding frequency of revaluation except for indications of changes in fair value. Revaluation every 3 years is based on the following: Main resources of local communities are the employee income tax which is withheld by the employer and transferred to the local budget, tax on land (computed as an amount per square meter by category of land) and tax on buildings. This latter tax is a percentage of gross value (not net value) set by local authorities. This percentage is increased if the gross value has remained unchanged for 3 years; in other words, has not been revalued, leading to this concept that a revaluation is to be performed every 3 years. The revaluation must be performed by an appraiser who is a member of ANEVAR (Romanian Association of Valuators) and must be recorded in the books as at 31 December prior to preparation of annual financial statements. First revaluation in case of an increase in value of the asset is recorded according to one of the following 2 methods: Gross method (for increases in value: Debit Building account and Credit account 105, Revaluation difference for revaluation of gross value, and simultaneously, depreciation of revaluation difference: Debit account 105, Revaluation difference and Credit Accumulated depreciation ). Page 13 The results of the inventory should be recognised in accounting books

14 Net method (for increases in value: write off accumulated depreciation first and then Debit Building account and Credit account 105, Revaluation difference for the change in net value). Upon the second revaluation, if a loss in value is found, account 105 is reduced first and, if the reduction in fair value is such that account 105 is zero, the additional loss is recognized in the income statement. Upon the third revaluation, if the fair value has increased, the loss recognized in the income statement at the time of the second revaluation must first be cancelled and the surplus recorded in account 105. Account 105 cannot be used for increasing the value of share capital. Since 2015, revaluation reserve considered as realized (through amortization/sale etc.) is transferred from account 105 to account 1175, "Retained earnings representing the realized revaluation reserve," this account replaces the account December - the deadline for payment of November taxes as well as payment of advanced profit tax for quarter 4 REMINDER Valuation of monetary items in foreign currency The November closing NBR exchange rates to use for valuation of monetary items (cash on hand, receivables, payables) denominated in foreign currency, as well as receivables and payables denominated in RON but pegged to a foreign currency for collection/disbursement are: 1 EUR = RON; 1 CHF = RON; 1 GBP = RON; 1 USD = RON DECEMBER 2017 AGENDA Every day - do not forget To complete the petty cash register (or print electronic version) To complete the purchase ledger and sales ledger To update electronic employee registers with information regarding labour contract inception/amendment or termination, if any At month end - do not forget To complete the journal ledger To register contracts concluded during the month for services rendered by nonresidents with tax authorities as per article 8 point 8 of the Fiscal Code To revalue monetary assets and liabilities in foreign currency (cash on hand, assets, liabilities) at the NBR exchange rate in force on the last banking day of the month To organise a stock count of inventories if the enterprise does not use a perpetual inventory system To issue final invoices for the current month. To comply with requirements regarding VAT Mention the registration code under the scope of VAT on documents for EU business partners Check validity of registration code under the scope of VAT mentioned on invoices received Check amount of VAT disclosed on invoices received Check references related to VAT (e.g.: reverse charge, operation not subject to VAT, etc...) On invoices, write VAT amount received in case of reverse charge Maintain ledger of goods received Maintain ledger of non transfer of goods Maintain non current assets ledger Mention which exchange rate will prevail (NBR, commercial bank or Central European Bank) in contracts with foreign partners To consult the calendar of tax liabilities for DECEMBER 2017, visit the following link on ANAF webpage (in Romanian): Page 14

15 2017 Contributions Social security contribution (pension) See note 1 KEY HR FIGURES Employer and Beneficiary of activities considered dependent activities (% rate) 15.8% for normal working conditions 20.8% for particular working conditions 25.8% for special working conditions Employee and provider of dependent activities (% rate) 10.5% Health insurance fund (based on gross salary) See note 2 Medical leave contribution and health insurance allowance (based on gross salary) 5.2% 5.5% 0.85% Unemployment fund (based on gross salary) 0.5% 0.5% Work accident and occupational disease fund (based on gross salary) 2 Contribution to fund to guarantee payment of salary liabilities (based on gross salary) % 0.85% depending on CAEN code for main activity 0.25% (only for employees under labour contract included for retired persons) Salary tax 16% Contribution for non employment of disabled persons (for employers with more than 50 employees) 4 x 100% minimum gross salary for every 100 employees Minimum monthly gross salary RON 1450 Luncheon voucher up to maximum RON Per diem (in Romania) Employees in the public sector Employees in the private sector (x 2.5) RON RON Note 1: Basis for calculating social insurance contribution (CAS) is no longer capped after February 1, 2017 (applicable for both employer and employee contribution) Note 2: Basis for calculating health insurance contribution (CASS) has been capped for the period 1 to 31 January As of February 1, 2017 capping the tax base is repealed returning to the regime applicable in Contributions for dependent activities Social security contribution (pension) Employer and Beneficiary of activities considered dependent activities (% rate) Not owed for normal working conditions 4% for particular working conditions 8% for special working conditions Employee and provider of dependent activities (% rate) 25% Health insurance fund (based on gross salary) Not owed 10% Employment insurance contribution 2.25% Salary tax 10% Contribution for non employment of disabled persons (for employers with more than 50 employees) 4 x minimum gross salary for every 100 employees Minimum monthly gross salary RON 1900 Luncheon voucher Up to maximum RON Per diem (in Romania) Employees in the public sector Employees in the private sector (x 2.5) RON RON Page 15

16 Helesteului Str , District 1 Bucharest Phone: + 40 (0) (0) Fax: + 40 (0) office@apex-team.ro Our Mission: Adding Value to Client s Business APEX Team includes qualified professionals able to provide a full range of accounting and payroll services. Our consultants are ready to share their knowledge and experience gained whilst working in Romania as consultants for one of the Big 4 international companies, having many international companies acting in a wide range of industries as clients. The team includes chartered accountants (Romanian Chartered Accountants Body and also ACCA) specialised in accounting for business entities, as well as a group specialised in payroll administration on behalf of the client. APEX Team provides a full range of accounting services, payroll services, local tax compliance and tax advice, as well as services tailored to your company needs: Bookkeeping Recurring accounting assistance Payroll computation and additional HR services Accounting and tax advice «on line» Consulting and assistance in drafting transfer price files Start up services Organization of the accounting function Assistance in implementation of ERP Training Disclaimer: The above information is a short summary of recently published information and is not intended to be advice on any particular matter. APEX Team International disclaims liability to any person in respect of anything done in reliance of the contents of these publications