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  • Legal Flash no. 32
Article:

Legal Flash no. 32

27 August 2020

Law no. 175 from August 14, 2020 for the amendment and completion of Law no. 17/2014 regarding some measures to regulate the sale-purchase of agricultural lands located outside the built-up area and to amend Law no. 268/2001 regarding the privatization of the commercial companies that hold in administration lands of public and private property of the state with agricultural destination and the establishment of the Agency of State Domains

This normative act, published in the Official Gazette with number 741 / 14.08.2020, presents significant changes in relation to the procedure of acquisition / sale of agricultural lands outside the built-up area, among which we will mention:

 

  • In the case of the sale of an agricultural land outside the built-up area, the number of beneficiaries of the pre-emption right has suffered a significant increase. Thus, the sale of agricultural land outside the built-up area will have to comply with the current list of preemptors, in the following order:
    • co-owners, first-degree relatives, spouses, relatives and in-laws up to and including the third degree;
    • the owners of agricultural investments for the cultivation of trees, vines, hops, exclusively private irrigation and / or tenants;
    • the owners and / or lessees of the agricultural lands adjacent to the land subject to sale, the young farmers;
    • The Academy of Agricultural and Forestry Sciences "Gheorghe Ionescu-Şişeşti" and the research-development units in the fields of agriculture, as well as the educational institutions with agricultural profile,
    • natural persons with domicile / residence located in the administrative-territorial units where the land is located or in the neighboring administrative-territorial units;
    • the Romanian state, through the Agency of State Domains.
  • If none of the preemptors exercises their right of pre-emption within the legal term, the alienation by sale of agricultural lands outside the built-up area can be done to:
    • natural persons - subject to the following cumulative conditions: (i) to have their domicile / residence on national territory for a period of at least 5 years prior to the registration of the offer to sell, (ii) to undertake agricultural activities on national territory for a period of at least 5 years prior to the registration of the offer, (iii) to be registered by the Romanian tax authorities at least 5 years prior to the registration of the offer.
    • legal entities - subject to the following cumulative conditions: (i) to have their registered office and / or secondary office located on national territory for a period of at least 5 years prior to the registration of the offer to sell, (ii) carry out agricultural activities on national territory for a period of at least 5 years prior to the registration of the offer to sell, (iii) present documents showing that, of the total income of the last 5 fiscal years, at least 75% represents income from agricultural activities, (iv) the stockholder / shareholder holding the control of the company to be domiciled in Romania for a period of at least 5 years prior to the registration of the sale offer, (v) if the stockholders / shareholders holding control of the company are other legal entities, the stockholders / shareholders holding control of the company have to prove that their domicile has been located in Romania for a period of at least 5 years prior to the registration of the sale offer.

  • Another change concerns the term of exercise of the pre-emption term, this being extended from 30 working days to 45 working days from the display of the offer by the competent mayor's office.

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    Also, regarding the possibility of alienation of agricultural lands located outside the built-up area, their sale - before the expiration of an 8-year period from the purchase date - will imply the obligation to pay an 80% tax on the amount representing the difference between the sale price and the purchase price, based on the grid of notaries from that period.
  • Similarly, in case of direct or indirect alienation - before the expiration of an 8-year period from the purchase date - of the control package of the companies that own agricultural lands located outside the built-up area and which represent more than 25% of their assets, the seller will have the obligation to pay a tax of 80% on the difference in value of the respective lands calculated on the basis of the notaries' grid between the moment of acquiring the lands and the moment of alienation of the control package. In this case, the profit tax on the difference in value of the shares or shares sold will be applied on a reduced basis in proportion to the percentage of the share of the respective agricultural lands in the fixed assets, any double taxation being prohibited.