Please find below the tax amendments introduced by Law no. 301/2021 on the approval of Government Ordinance no. 8/2021 for the amendment and completion of Law no. 227/2015 on the Tax Code (published in the Official Gazette no. 1195 / 17 December 2021) and by Law no. 322/2021 on the completion of Law no. 227/2015 on the Tax Code (published in the Official Gazette no. 1245 / 30 December 2021):
I. Corporate income tax
a. Amendments regarding the tax incentives applicable to sponsorships / patronage / private scholarships granted by taxpayers (Law no. 322/2021)
Starting with 1st of January 2022, the amount of sponsorships / patronage / private scholarships that exceeds the value of the tax credit from which a taxpayer can benefit from in a fiscal year can no longer be carried forward and will remain a non-deductible expense. Previously, the tax legislation provided the possibility to carry forward these amounts in the next 7 consecutive fiscal years for corporate income tax payers / on maximum 28 consecutive quarters in case of micro-enterprise income tax payers.
According to the new provisions, taxpayers can dispose of the value established for sponsorships / patronage / private scholarships based on the limits provided by the Tax Code, only if the difference between the value established according to the tax provisions and the amounts carried forward from previous periods is positive.
In case of corporate income tax payers, if the amount of the tax credit that a taxpayer can benefit from in a fiscal year (the minimum value between 0.75% of the turnover and 20% of the corporate income tax due), decreased with the amounts of sponsorships / patronage / private scholarships carried forward from previous periods, is not fully used, taxpayers may dispose the redirection of the corporate income tax, within the limit of the respective unused value, for performing sponsorships / patronage acts / granting private scholarships, within a maximum of 6 months from the date of submission of the annual corporate tax return. In case of taxpayers who are members of a tax group, the redirection may be ordered only by the responsible legal person.
These provisions are also applicable to micro-enterprises, the redirection term being 6 months from the date of submission of the tax return for the fourth quarter.
The redirection of the amounts will be made by submitting a redirection form which is to be published by ANAF Order. The obligation to pay the redirected amount from the corporate income tax / micro-entreprises income tax is of the competent tax authority and it is maintained the condition that the beneficiary of the sponsorship to be registered, on the date of payment of the respective amount by the tax authority, in the Register of entities / places of worship.
As a transitional measure, the Law provides that the amounts related to sponsorships / patronage / private scholarships granted until 31st December 2021 and which are not deducted from the corporate income tax / income tax on micro-enterprises until this date, can be carried forward in the next 7 years, respectively 28 quarters, without exceeding the year 2028.
b. Clarifications to the tax consolidation system for corporate income tax purposes (Law no. 301/2021)
Each member of the tax group must compute annually / quarterly the individual corporate income tax in order to determine the amounts to be deducted from the consolidated corporate income tax (e.g. tax credit for sponsorship / patronage / private scholarships, tax exemption for reinvested profit, acquisition cost of electronic fiscal cash registers, reductions according to GEO no. 153/2020 and other amounts that are deducted from the corporate income tax), subsequently communicating these amounts to the responsible legal person. This corporate income tax is not due by the group member and it is not communicated to the responsible legal person.
As regards the tax exemption for reinvested profit, the responsible legal person that performs the deduction of the corporate income tax exemption from the corporate income tax due by the tax group shall communicate to each member who has transmitted such amounts its proportionate share of the amount deducted at the level of the tax group, by multiplying the amount deducted at the level of the tax group by the ratio between the amounts transmitted by each member and the total of the amounts received by the person responsible from the members of the tax group. The amount to be allocated by the member of the tax group for booking the reserve shall be the one communicated by the responsible legal person.
II. Income tax (Law no. 301/2021)
In case of income from transfer of real estate from personal patrimony, if the value declared by the parties in the document by which the property right or its dismemberments are transferred is lower than the minimum value established by the market research carried out by the chambers of notaries public with authorized appraisers, the income tax is calculated at the level of the value established by the market research.