Completed at the very last minute, the fiscal legislation in force as of this year and known as the Fiscal Code and the Fiscal Procedure Code is causing the Finance Ministry to be concerned about the problems that tend to arise when it comes to turning the new regulations into practice. All the more so since the guidelines of the newly published Fiscal Code are not entirely clear, and the Procedure Code, pending debate and amendment by the Parliament, does not even have such guidelines. Subsequently, a wave of orders and decisions to reconcile legislation with reality can only be expected.
"The Code has many good points and sets valuable principles for the Romanian legislation, unfortunately the classic taxation trick - for every bit given, twice more is taken back, has not been dropped," Jean-Pierre Vigroux, Foreign Investors Council's chairman on Tuesday said during a conference organised by Business Review Forum. The first example that comes to mind is the relatively low profit tax, 25%, which is made considerably worse by capping or not acknowledging the deductibility of the various expenses running a business entails, though.
As far as taxpayers and tax consultants are concerned, they fear the territorial tax inspectors will be unable to interpret the content of the new fiscal provisions at least at first, and focus on formal issues.
The answer of the Exchequer, as voiced by Maria Manolescu, state secretary with the Finance Ministry is, "We are currently working on several decisions and orders for applying certain provisions in the Fiscal Code. We will attempt to provide further specifications wherever problems are encountered," Maria Manolescu said.
What the business circles are concerned about is, first of all, that acknowledging certain expenses as deductible when calculating the profit tax will depend on the manner in which the tax inspector chooses to look at a particular deal.
"The Central fiscal committee will issue additional decisions for all those cases when certain transactions can be judged differently, therefore leaving no room for the tax inspector interpretations," Maria Manolescu reassured. The decisions in question are supposed to be published in the Official Gazette.
Jean-Pierre Vigroux says the problems might be addressed to a certain extent if the provisions of the tax inspector's code of ethics were applied.
Manolescu admits the need to find solutions to clear up the issues concerning the interpretation of the legislation and even the fact that the burden of the myriad of filings and payment orders that fall upon the taxpayer in a month has not been addressed. Beyond the willingness to lend an ear to the feedback from the market, lies no concrete answer, though.
razvan.voican@zf.ro
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