The newsletter for December 2024 includes the new rules regarding the use of RO e-Factura system and delays related to RO e-TVA and RO e-Transport, changes to the Fiscal Code concerning the income tax, value-added tax, the elimination of tax incentives in IT, construction, and the agro-food sector, as well as new rights for shareholders under the Companies Law.
I. Emergency Ordinance No. 138/2024 on the amendment and completion of certain legislative acts in the fiscal-budgetary field, as well as for regulating other measures
Published in the Official Gazette No. 1222 / 05.12.2024
Among the most notable novelties introduced by this Emergency Ordinance, we mention:
1. Ro e-Invoice
- Effective from January 1, 2025, invoices issued for operations conducted under public procurement contracts must mandatorily include the corresponding CPV codes provided in the reference nomenclature for public procurement.
- In B2B commercial relationships between taxable persons established in Romania, for the supply of goods and services that are NOT deemed to take place in Romania, the issuer of the electronic invoice is NO longer required to send it to the recipient using the national RO e-Invoice system starting January 1, 2025.
- Starting from January 1, 2025, simplified invoices must be transmitted through the RO e-Invoice system for both B2B and B2C relationships (previously exempt).
- Exceptions to transmission through the RO e-Invoice system include fiscal receipts (considered simplified invoices) and invoices issued for intra-community deliveries of goods where the beneficiary, a taxable person established in Romania, provides a VAT registration code from another EU member state. In this context, changes are also introduced for simplified invoices, which, as of January 1, 2025, must additionally include the beneficiary’s VAT number or tax identification code.
- Regarding the transmission of invoices in the RO e-Invoice system in B2C relationships, including the personal identification numbers (CNPs) of individual clients in invoices is optional. If the beneficiary, an individual, cannot be identified using any tax identification code, invoices must be issued using a 13-digit code consisting of zeros in place of the beneficiary’s tax identification code.
It is important to note that while the obligation to transmit B2C invoices becomes mandatory starting January 1, 2025, non-compliance will only constitute an offense and attract penalties starting from July 1, 2025.
2. Pre-filled RO e-VAT Return
- The obligation for taxpayers to submit the results of checks performed on discrepancies communicated through the “RO e-VAT Compliance Notification” is postponed until July 1, 2025. Thus, no penalties will be applied to taxpayers who fail to respond to RO e-VAT Compliance Notifications until this date.
3. RO e-Transport
- As an exception, for designated users with the status of Authorized Economic Operators, penalties related to international goods transport will apply starting from March 31, 2025, for offenses committed and identified from this date onward (previously set for January 1, 2025).
4. Amendments to the Fiscal Code
a) Minimum Tax – Taxpayers are exempt from the minimum tax if they are subject to the additional tax for credit institutions—Romanian legal entities and branches in Romania of foreign credit institutions—or the additional tax for legal entities operating in the oil and natural gas sectors, during the period these provisions apply.
b) Value added tax – Taxable persons who make purchases with VAT deduction for investment projects under public or social interest programs funded from public funds and subsequently transfer these investments free of charge to the beneficiaries through a protocol must issue a self-invoice.
c) Income Tax:
- The method of declaring and paying income tax for certain types of income from the use of property (excluding income from agricultural leasing and tourist rentals of rooms in privately-owned properties) paid by legal entities or other entities required to maintain accounting records has been clarified. For rental income related to periods after January 1, 2024, paid in advance before December 31, 2023, as well as rental income paid exclusively in kind or using security deposits to cover rent stipulated in the contract, the obligations for determining the annual net income, calculating, declaring, and paying the tax fall on the owner, usufructuary, or other legal holder. These obligations must be fulfilled by submitting the Single Declaration on income tax and social contributions owed by individuals by May 25 of the year following the income year.
- Payers of such income are required to file a Declaration on the calculation and withholding of tax for each income beneficiary (Form 205) with the tax authority.
- Clarifications have been made regarding income from the Transfer of Real Estate Ownership from Personal Assets:
- The non-taxation of income obtained by individuals from the transfer of factual possession recorded in the land register by the succession’s author through acts for cause of death, in accordance with the law.
- The non-taxation at the time of recording factual possession in the land register as part of systematic or sporadic registration and subsequent registration of ownership rights as a result of recording possession, under Articles 13 and 41 of Law No. 7/1996 on Cadastre and Real Estate Publicity. Income tax on other sources will apply to subsequent disposals of factual possession.
- Taxation in cases involving the transfer of ownership rights’ dismemberments under a suspensive condition authenticated through a notarial act. For income determined and received after authenticating the notarial act transferring ownership dismemberments, payers of income (legal entities or entities required to maintain accounting records) are responsible for calculating, withholding, declaring, and paying the corresponding tax. The withheld tax constitutes the final tax and must be paid to the state budget by the 25th of the month following the withholding month.
- The fiscal regime for foreign pensions is clarified, exempting them from progressive taxation and applying a flat tax rate of 10%. To determine the annual tax due on foreign pension income, taxpayers must calculate their taxable annual income by deducting a monthly non-taxable amount of 2,000 RON, multiplied by the number of months during which the pension income was earned.
- For private, voluntary, or occupational pension income from abroad, the taxable base is the amount exceeding the participants’ net contributions (proven with supporting documents), from which the monthly non-taxable amount of 2,000 RON, multiplied by the number of months with pension income, is deducted.
II. Law No. 299/2024 Amending and Supplementing the Companies Law No. 31/1990
Published in the Official Gazette No. 1212 / 03.12.2024
According to the new legislative act, shareholders, either in person or represented, may participate and vote physically or via electronic means of remote communication in general meetings. They may also cast their votes by correspondence.
Additionally, the law specifies that if the company has its own website and the articles of association provide for it, the notice of the meeting may be made solely by publishing it on the website and maintaining it there continuously until the date of the general meeting of shareholders.
The notice convening the general meeting must include the place and date of the meeting, as well as the agenda, explicitly mentioning all the matters to be discussed. If the agenda includes the appointment of administrators or members of the supervisory board, the notice must state that a list containing information about the names, places of residence, and professional qualifications of the proposed candidates for administrator is available to shareholders, who may consult and amend it. If participation through electronic means of remote communication is provided, the notice must also include a description of the procedures shareholders must follow to participate and vote online. The new law also stipulates that, if the articles of association provide for it or if the shareholders decide so, they may participate in the general meeting via electronic means of remote communication. These means must meet the necessary technical conditions for identifying participants, enabling their effective participation, continuously retransmitting the deliberations, allowing shareholders to address the meeting, and enabling voting during the general meeting. The system must also allow for the identification of shareholders, the subsequent verification of voting methods, and the possibility for each shareholder to verify their vote. Resolutions adopted during general meetings held under these conditions must be signed either in handwriting or with an electronic signature, in accordance with the law.
III. Emergency Ordinance no. 137 of November 27, 2024, for amending and supplementing Law no. 162/2017 regarding the statutory audit of annual financial statements and consolidated annual financial statements, and for amending certain normative acts, including Government Emergency Ordinance no. 75/1999 regarding financial audit activity, as well as the amendment and completion of certain normative acts
Published in the Official Gazette no. 1215 / 03.12.2024
Updates Law 162/2017 to transpose the provisions of Directive (EU) 2022/2464 on sustainability reporting and ensure statutory audit compliance with European requirements. The main changes include:
Key Partner in Sustainability:
- Defined as the lead auditor responsible for ensuring sustainability reporting at the individual or consolidated level.
- The audit firm must provide resources and qualified personnel for the key partner.
Sustainability Assurance Report:
- Prepared according to European standards.
- Includes details about the audited entity, the standards used, and the auditor’s opinion.
- May be included in a separate section of the statutory audit report.
Shareholders’ Rights:
- Shareholders holding more than 5% of voting rights or capital may request an external review of the sustainability reporting by a third party.
Revocation of Auditors:
- Shareholders or other bodies may request the court to revoke the financial auditor for justified reasons.
Limitations for Public Interest Entities:
- Cannot work with the same auditor for more than 10 consecutive years, with exceptions for contracts in place until December 31, 2025.
Continuing Education for Auditors:
- Auditors authorized before 2026 must participate in training programs related to sustainability reporting.
- These changes ensure alignment of national legislation with European requirements for sustainability and transparency in auditing.
IV. Law no. 309/2024 for amending Article 224 (1) letter a) of Law no. 95/2006 on healthcare reform, as well as for amending Article 154 (1) letter a) of Law no. 227/2015 regarding the Fiscal Code
Published in the Official Gazette no. 1236 / 09.12.2024
Updates the categories of individuals who benefit from health insurance coverage without the obligation to pay contributions. Among the new categories included are:
- Graduates of medical, dental, and pharmacy faculties, for a period of up to 6 months after graduation;
- Young people aged between 18 and 26 who are students, apprentices, or enrolled in a high school, vocational school, or accredited higher education institution, including those from other countries.
V. Order no. 6,670 regarding the regulation of certain accounting aspects
Published in the Official Gazette no. 1303 / 22.12.2024
The order regulates and updates essential accounting aspects, including procedures for correcting errors and specific accounting changes:
1. Extension of the error correction procedure:
- The error correction procedure for annual financial statements and annual accounting reports, approved by the Ministry of Public Finance Order no. 450/2016, now also applies to the “Cash Flow Statement,” according to the Ministry of Finance Order no. 470/2024.
2. Updates in accounting regulations regarding individual and consolidated annual financial statements (Ministry of Public Finance Order no. 1,802/2014):
- The application of sustainability reporting is extended to branches and subsidiaries in Romania of entities from third countries.
- If the sustainability assurance opinion is missing from the parent entity in a third country, the branch or subsidiary must issue a specific declaration.
3. Changes to accounting accounts:
- Account 694: Records expenses related to profit tax, including the minimum turnover tax, within fiscal groups.
- Account 794: Records income from profit tax, including the minimum turnover tax, arising from fiscal group settlements
4. Changes to accounting regulations in accordance with International Financial Reporting Standards (Ministry of Public Finance Order no. 2,844/2016):
- Companies whose securities are no longer admitted for trading on a regulated market may opt for applying either the regulations from Ministry of Public Finance Order no. 2,844/2016 or Ministry of Public Finance Order no. 1,802/2014.
- Updates to the names and functions of accounts 694 and 794.
These changes aim to clarify and harmonize accounting regulations for economic operators and non-profit legal entities.
VI. Emergency Ordinance No. 156/2024 on Certain Fiscal-Budgetary Measures in the Field of Public Expenditures for the Preparation of the 2025 Consolidated General Budget, Amending and Supplementing Certain Legislative Acts, and Postponing Deadlines
Published in the Official Gazette No. 1334 / 31.12.2024
The main fiscal changes brought by the ordinance refer to:
Dividend tax for legal entities
Increase of the tax rate from 8% to 10%
The dividend tax is determined by applying a 10% tax rate to the gross dividend paid to a Romanian legal entity.
Effective date: The new 10% rate applies to dividend income distributed after January 1, 2025.
Microenterprise Income Tax
1. The income threshold for applying to this taxation system is reduced.
Thus, a microenterprise is a Romanian legal entity that, as of December 31 of the previous fiscal year, has generated income not exceeding the equivalent in RON of €250,000, and starting January 1, 2026, €100,000. In order to apply for this system, the microenterprise must cumulatively meet all the other conditions specified in Article 47 of the Fiscal Code.
Previous threshold: €500,000.
Effective date: January 1, 2025.
2. The condition regarding the share of income from consultancy and/or management in total income, which had to be less than 20% to apply for microenterprise income tax, is eliminated.
Effective date: January 1, 2025.
3. To apply the 3% tax rate, starting January 1, 2025, the principal or secondary activities corresponding to the following CAEN codes are also considered, as applicable:
- 6210 – Custom software development activities (client-oriented software),
- 6290 – Other information technology service activities,
- 5611 – Restaurants,
- 5612 – Activities of mobile food service units,
- 5622 – Other food service activities.
Effective date: January 1, 2025.
4. If, during a fiscal year, a microenterprise generates income exceeding €250,000, or €100,000 starting January 1, 2026, it owes corporate income tax beginning with the quarter in which this limit is exceeded, without the possibility of opting to apply for the microenterprise income tax system for the following period.
Effective date: January 1, 2025.
5. For the fiscal year 2025, the income threshold, representing the equivalent in RON of €250,000 or €100,000 starting January 1, 2026, is verified based on the income generated by the Romanian legal entity as of December 31, 2024, and December 31, 2025, respectively. The condition regarding the share of income from consultancy and/or management in total income as of December 31, 2024, does not apply when calculating the €250,000 threshold.
Income Tax
- The tax rate for dividend income earned by individuals increases form 8% to 10%,
- Dividend income, including gains from holding participation titles as defined by applicable legislation in collective investment undertakings, is taxed at a 10% rate, with the tax being final.
Effective date: The new rate applies to dividend income distributed after January 1, 2025.
Tax Benefits
1. The tax benefits granted to employees in the IT, construction, agriculture, and food industries are removed.
Effective date: January 1, 2025.
The benefits granted until the end of 2024 refer to:
- exemption from the 10% income tax for a gross salary of up to 10,000 RON,
- reduced pension contribution rate (CAS) of 20.25% for gross income up to 10,000 RON.
2. The tax benefit of 300 RON remains applicable for employees who work under an individual labor contract, full-time, at the location where their primary position is located. This benefit is not subject to income tax and is not included in the monthly base for mandatory social security contributions, if the following cumulative conditions are met:
- the gross basic salary established under the individual labor contract, excluding bonuses and other allowances, is equal to the gross national minimum salary guaranteed by the Government’s decision, in force in the month corresponding to the income;
- the gross income from salaries and salary-related benefits, excluding meal vouchers, vacation vouchers, and food allowance, does not exceed 4,300 RON.
This provision applies to income earned from January to December 2025 inclusive.
Guaranteed Gross Minimum Base Salary for the Construction and Agro-Food Sectors
Starting from January 1, 2025, the guaranteed gross minimum base salary will be set in monetary terms, excluding allowances, bonuses, and other supplements, for a standard work schedule averaging 165.334 hours per month:
- for the construction sector: 4,582 RON per month, representing an average of 27.714 RON/hour;
- for the agricultural and food industries: 4,050 RON per month, representing an average of 24.496 RON/hour.
Income Tax on Non-Residents’ Earnings
The tax rate increases (from 8% to 10%) for income earned by non-residents in the form of dividends.
Effective date: The new 10% rate applies to dividend income distributed after January 1, 2025.
Tax on Constructions
The tax on constructions is calculated by applying a 1% rate to the value of constructions held in the taxpayers’ assets as of December 31 of the previous year, from which the value of buildings subject to building tax is subtracted. This provision also applies to the value of buildings in industrial, scientific, and technological parks that, according to the law, do not benefit from an exemption from building tax. In the case of constructions that are part of the public/private domain of the state or administrative-territorial units, the tax is owed by taxpayers who administer/lease/use them free of charge/rent them.
The tax on constructions is paid in two equal installments by June 30 and October 31, inclusively.
Effective date: January 1, 2025, with the provision that within 90 days from the effective date of this emergency ordinance, the Ministry of Finance will issue methodological norms regarding the application of the new provisions related to the tax on constructions
