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Amendments to the Fiscal Code by GEO 125/2011

In the Official Gazette no. 938 of December 30, 2011 was published the Government Emergency Ordinance no.125/2011 (“GEO 125/2011”) amending and supplementing the Law no. 571/2003 regarding the Fiscal Code [in Romanian Ordonanta de Urgenta nr. 125 din 27 decembrie 2011 pentru modificarea şi completarea Legii nr. 571/2003 privind Codul fiscal].

GEO 125/2011 has brought substantive changes to the Fiscal Code, which have entered into force on January 1, 2012 (except for some rules mentioned in art. VII of this enactment). The main changes concern:

  • limited deductibility of the expenses on fuel for the purpose of income tax and profit tax determination, applicable to the road vehicles transporting persons and who are not used exclusively for directly productive activities (respectively 50% for each of these expenses);
  • limited VAT deductibility (within the limit of 50% of the purchase price), for acquisition of vehicles that are not used exclusively for directly productive activities and also for the fuel required for their functioning;
  • the taxation base for the incomes obtained from lease of goods is expanded to the incomes obtained by the owners from the lease of rooms in houses with a capacity of tourist accommodation from one to five rooms inclusively.
  • taxation by withholding of the income obtained from leasing agricultural goods, agricultural land and agricultural equipment;
  • ANAF takes over the administration of the health and social insurance contributions of the authorized persons and of those who obtain incomes from independent activities;
  • the VAT reverse charge procedure is extended to waste goods;
  • modification of the amount of excise for certain goods;
  • new rules for the taxpayers in the banking system that applies International Financial Reporting Standards (IFRS);
  • new rules for the registration of VAT payers.