The Government is to debate early next month the long-awaited draft ordinance to modify and expand the Law on the Fiscal Code, according to Finance Minister Mihai Tanasescu.
The Cabinet is thus taking advantage of a loophole in the relevant legal texts, which state that the modification of a normative act is "usually" done six months before enforcement - meaning not necessarily. Therefore the first year of the Code's enforcement will begin as an exception to the rule, with the belated modifications being introduced by an emergency ordinance instead of a law draft. The changes in question were debated on Monday by the Social dialog committee attached to the Finance Ministry.
Besides the reductions to the main tax brackets as recently announced by the Minister, the draft ordinance also includes new provisions on how the deductibility of certain expenses should be treated. The State is in this way displaying its determination to stimulate savings-lending systems to fund housing construction. It will do so by not taxing income from interest on deposits made under this system, or on the state-granted bonus to boost the savings capacity. Just one institution is currently experimenting with this system, namely Raiffeisen Banca pentru Locuinte (Raiffeisen Housing Bank), though others are also expected to tap into this business.
At the same time, the Finance Ministry is answering the criticism it received throughout debates concerning the Fiscal Code. These concerns range from the deductibility of expenses in relation to marketing, market surveys, participation in fairs and exhibitions, companies' publication of their own informative materials, to the lack of profit both in the current year and from the previous years.
Furthermore, tax will be reduced from 15% to 14% for the gross income derived from intellectual property rights, sale of goods on consignment, agent contracts, fees, civil conventions, accounting, technical, judicial and extra-judicial auditing activities.
On the other hand, the tax on income derived from 'other sources' will increase from 10% to 14% (levied on the gross income). The current version of the Code stipulates that the level of deductible expenses made by an employer on behalf of an employee, such as contributions to optional occupational pension schemes and private insurance premiums, is set "under the law." The draft modification caps this level at 200 euros a year.
Also this summer, the Finance Ministry is to issue a draft ordinance to modify and complement the Accounting Law 82/1991, republished.
razvan.voican@zf.ro
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