Insurance premiums will be at least partially tax-deductible, meaning they will be deducted from the gross profit in order to be tax-exempt, following the release of the specific norms of insurance Law 32/2000 to be drawn up by representatives of the Insurance Overseeing Commission, Finance Ministry and insurance companies.
"If negotiations between these three parties fail to produce a result by winter, the Government could regulate this situation through an emergency ordinance," Nicolae Crisan, the chairman of the Insurance Overseeing Commission, told Ziarul Financiar.
Law 32/2000 stipulates that the premiums from insurance and re-insurance are deductible expenses, but the Finance Ministry disagreed with the enforcement of this stipulation, arguing that the global tax law and the profit tax law do not consider the premiums from insurance as deductible expenses.
"One ought to understand that the state budget needs revenues and that fictitious insurance contracts may be concluded, leading to tax evasion.
In order to avoid this situation, the level of deductible premiums should be confined to a certain level, as no EU country has such a generous legislation. We have to find a viable solution in order to enforce this law and boost the insurance activity," Nicolae Crisan said.
A global enforcement of this stipulation applying to all types of insurance might trigger 600-700 billion lei in state budget deficit. On the other hand, the increase in the insurers' revenues might bring higher revenues to the state budget derived from the profit tax, even if this is going to happen later.
The juridical situation of the premiums' deductibility became even more entangled when the ordinance on income tax was published in the Official Gazette on August 3. Paragraph 7 of article 85 cancels the stipulations of article 43, paragraph 1, letters a) and b) from Law 32/2000 stipulating that the premiums from insurance and re-insurance and insurance damages were tax-exempt.
However, paragraph 2 of article 43, which specifies that the insurance and re-insurance premiums are deductible expenses, remained unchanged.
Pentru alte știri, analize, articole și informații din business în timp real urmărește Ziarul Financiar pe WhatsApp Channels
