The Decision no. 1393/2024 | TaxFlash 111
The Decision no. 1393/2024 | TaxFlash 111
We inform you that in the Official Gazette no. 1125 of November 11, 2024 was published the Decision no. 1393/2024 on amending and supplementing the methodological norms for the implementation of the Tax Code (Law no. 227/2015), which introduces clarifications and additions regarding the minimum tax on turnover (MTT), the additional tax for legal entities in the oil and gas sectors, the tax on microenterprises' income and excise duties.
The most important provisions are the following:
A. CORPORATE INCOME TAX:
Regarding the MTT and the additional tax for legal entities in the oil and gas sectors, clarifications are made and examples of calculation are presented for taxpayers applying the quarterly/annual system of declaration and payment of corporate income tax and for taxpayers applying the tax consolidation rules.
The main clarifications are as follows:
- for determining the amount of sponsorship and/or acts of patronage to be deducted from the MTT, the limits are those applied in determining the corporate income tax for the same calculation period. It is clarified that the limit of 20% of the corporate income tax applies to the corporate income tax that would have been due if the taxpayer had not been liable to pay the MTT;
- for the purpose of determining the corporate tax due on a quarterly basis, the cumulative calculated corporate income tax/MTT since the beginning of the tax year shall be reduced by both the corporate tax due at the MTT level and the corporate income tax due, depending on which tax was due for the period prior to the calculation period;
- the new norms list the excise taxpayers who, when calculating MTT, can deduct from total revenues the revenues representing excise duties, which have been simultaneously reflected in the expense account;
- the external tax credit determined under Art. 39 Avoidance of double taxation of the Tax Code can be deducted from the MTT;
- it is clarified that corporate income tax at the MTT level represents corporate income tax for the application of double taxation treaties;
- if, after comparing corporate income tax and MTT, the taxpayer is obligated to pay corporate income tax, this is also owed even if, after deducting foreign tax credits and reinvested profit exemptions, the reduced corporate income tax falls below the MTT;
- if, as a result of the comparison between corporate income tax and MTT, the taxpayer is liable to pay MTT, MTT is also due if, after deducting from MTT the amounts of foreign tax credit, sponsorship/ patronage and the additional deduction for research and development activities, the reduced amount of MTT falls below the amount of corporate income tax;
- clarifications are provided regarding economic operators regulated/licensed by NERA (National Energy Regulatory Authority) that perform electricity and gas distribution activities, specifically listing activities carried out under the obligations of license holders for electricity/gas distribution and included in the scope of electricity/gas distribution activities.
B. INCOME TAX ON MICRO-ENTERPRISES:
The main additions introduced are:
- rules on the calculation of indirect holdings are introduced and examples of calculation for direct/indirect holdings of a shareholder/associate are presented. Indirect ownership is calculated by multiplying the percentages of ownership, starting with the percentage of direct ownership of the first Romanian legal entity held and continuing with the percentages of ownership, down the chain of legal entities, until reaching the entity for which microenterprise status is being checked;
- the types of economic activities performed by entities without legal personality (e.g., authorized natural person, individual enterprises, etc.) and the revenues considered for applying the provisions regarding linked enterprises are detailed;
- regarding the condition of timely submission of annual financial statements, for verifying this condition on December 31 of the previous year, the norms clarify that this condition refers to the statements related to the financial year two years prior (N-2) and/or those preceding that year;
It is also clarified that fulfilling the condition during the fiscal year regarding the timely submission of annual financial statements applies with reference to the annual financial statements for the financial year N-1.
C. EXCISE:
Taking into account the new regulations, these amendments clarify and expand the activities that can be carried out in tax production warehouses. They allow the inclusion of products subject to non-harmonized excise duties and impose stricter documentation and notification requirements for operators, thus ensuring compliance with the Fiscal Code and more rigorous monitoring of production.