Emergency Ordinance no. 78 of December 18, 2019 regarding the amendment of some regulatory acts and the establishment of certain measures in the field of agriculture, as well as for the approval of fiscal-budgetary measures (Official Journal no. 1031 of December 23, 2019).

Specifications:

• The VAT breakdown system is repealed;
• This provision enters into force as of February 1, 2020;
• Until the date of entry into force of the aforementioned measures, the VAT account may be foreclosed by any creditor, regardless of the nature of the receivable;
• Within 10 days from the entry into force of this article, the units of the State Treasury in which the persons who have applied this system have open accounts, will automatically transfer the existing available funds in the balance of the VAT accounts in the holder’s available funds account, opened with the same unit of the Treasury, or in the account of the credit institution communicated by the person concerned.

Regulation no. 13 of November 28, 2019 regarding the establishment of measures aimed at preventing and combating money laundering and terrorist financing through the financial sectors supervised by the Financial Supervisory Authority (Official Journal no. 991 of December 10, 2019).

Specifications:

• The provisions of this regulation are applied in order to prevent acts of money laundering and terrorist financing;
• The institutions to which this regulation applies are:

• insurers;

• central depositories, alternative investment fund managers, central counter-parties, financial investment services companies and other entities authorized under national legislation to provide investment services and activities, investment management companies, investment companies, entities managing a trading venue, the Investor Compensation Fund, as defined according to the legal provisions;

• managers of private pension funds, in their own name and for the private pension funds that they manage;

• branches located in a Member State of financial institutions, regardless of whether their actual premises are located in a Member State or in a third-party State;

• investment companies;

• collective investment body which sells its units or shares;

• financial institutions that are Romanian legal entities and branches of financial institutions that are foreign legal entities;

• managers of private pension funds, in their own name and for the private pension funds that they manage, except for occupational professional pension funds.

Order 3194 of November 26, 2019 for the amendment of the Order of the National Agency for Fiscal Administration (NAFA) 3731/2016 regarding the approval of the framework model of the collaboration protocol for information exchange between the National Agency for Fiscal Administration and non-banking financial institutions (Official Journal no. 1015 of December 17, 2019).

Specifications:

• The framework model of the collaboration protocol for information exchange between the National Agency for Fiscal Administration and non-banking financial institutions is established;
• It is established what exactly personal data are are and what their protection consists of in the present Order.

Decision no. 935 of December 13, 2019 establishing the national minimum gross basic salary guaranteed to be paid (Official Journal no. 1010 of December 16, 2019).

Specifications:

• As of January 1, 2020, the national minimum gross basic salary guaranteed to be paid will be of Lei (RON) 2,230/month, for a normal working program of 167,333 hours (Lei 13,327/hour);
• Exception: for persons with positions in higher education, who have a minimum seniority of 1 year in the field concerned, the guaranteed minimum salary will be Lei 2,350/month, under the same conditions as those mentioned above;
• It is worth mentioning that this increase of the gross minimum salary in 2020 leads to the increase of the ceiling according to which natural persons (individuals) who obtain non-salary income may have the obligation to pay social insurance and health social insurance contributions, given that such ceilings are determined according to the level of the national minimum gross basic salary in force at the time of submission of the single declaration of estimated income;
• Also, the increase of the minimum salary has an impact, in the sense of an increase, on the income standards for persons who obtain income from independent activities.

Law no. 263 of December 30, 2019 amending Law no. 227/2015 regarding the Fiscal Code (Official Journal no. 1054 of December 30, 2019).

Specifications:

• The special provisions establishing social contributions (social insurance - CAS and health social insurance - CASS) are repealed in the case of natural persons who obtain income below the level of one national gross minimum salary;
• As of January 2020, for the income achieved on the basis of an individual full-time or part-time employment contract, social contributions (pension and health) calculated on the income actually earned will be due, even if it is below the level of one national gross minimum salary;
• The law comes into force on January 1, 2020.

Order 1827 of October 25, 2019, of the president of the National Institute of Statistics on Intrastat value thresholds for collecting statistical information regarding intra-EU trade in goods in 2020 (Official Journal no. 940 of November 22, 2019).

Specifications:

• In 2020, the Intrastat value thresholds will be maintained at the amount of Lei 900,000 for each type of transaction (entry and, respectively, exit of goods within the EU).

Excise duties 

Law no. 263 of December 30, 2019 amending Law no. 227/2015 regarding the Fiscal Code (Official Journal no. 1054 from December 30th 2019).

Specifications:

• The fuel surcharge is removed;
• Thus, as of January 1, 2020, with the removal of the fuel surcharge, a 60 liter-refill of fuel will be, on average, Lei 20 cheaper than in year 2019;
• Also, the increase in excise duty on cigarettes will enter into force on January 1, 2020.

Council Directive (EU) 2018/1910 of December 4, 2018 amending Directive 2006/112/EC as regards the harmonization and simplification of certain rules of the value-added tax system for the taxation of trade exchanges between Member States.

Council Implementing Regulation (EU) 2018/1912 of December 4, 2018 amending the Implementing Regulation (EU) No. 282/2011 as regards certain exemptions for intra-Community operations.

Specifications:

• The amendments should enter into force as of January 1, 2020, but, up to the present, the Directive has not been transposed into local legislation and is not directly applicable. However, the provisions of the Regulation are directly applicable, without requiring transposition.
• The four quick remedies concern:

• The mandatory implementation of simplification measures for stocks available to the client (in Romania, this simplification measure already existed, but it was not mandatory).

In fact, under certain conditions, the transport of goods from one Member State to another for the purpose of subsequent sale to an already identified client (i.e. the stocks remaining at his disposal) is not assimilated to a transfer at the time of transport, but at the time of transfer of ownership over the goods.

Thus, the obligations of registration for VAT purposes in Romania of the supplier established in a Member State other than Romania are avoided.

Unfortunately, there are still no transitional measures meant to clarify the status of taxpayers already registered directly for VAT purposes in Romania - for such schemes - in the context of the new provisions.

• The simplification of rules for the allocation of the transport in case of chain transactions;

In the case of transactions A->B->C (i.e. two sales and a single transport from A to C), where each legal entity is in a different Member State:

• If the goods are transported directly from A to C, the shipment or transport is attributed to the delivery made to the intermediary operator (B);

• Exception: if the intermediary operator has communicated to his supplier the VAT identification number issued by the Member State from which the goods are dispatched or transported, the shipment or transport is attributed to the delivery of goods made by the intermediary operator;

• The client’s VAT code becomes a substantive condition for applying the VAT exemption for intra-Community supplies of goods;

The non-declaration or incorrect declaration in the VIES (VAT Information Exchange System) will be sanctioned by the non-applicability of the exemption for intra-Community delivery.

• Transport documentation for intra-Community supplies of goods (measure included in the Regulation, with direct application as of January 1, 2020):

• two sets of documents are provided, which can be used in order to support the transport of goods, in various combinations that are applicable on a case-by-case basis:

• a signed CMR (cargo movement record) document/signed consignment note, a bill of lading, an air freight invoice, or an invoice from the goods carrier, and

• documents such as insurance policies for the shipment or transport of goods or bank documents attesting the payment for the shipment or transport of the goods, official documents issued by a public authority (e.g. notary’s office), attesting the arrival of the goods in the recipient Member State, as well as a receipt issued by a warehouse keeper in the recipient Member State, attesting the storage of the goods in that Member State. - the transport documents must be issued by two different parties that are independent of each other, as well as independent of the buyer or of the seller.

We recommend a detailed analysis of the logistics chain in order to identify the appropriate variant of documentation.

Transposition into national legislation of the following Directives of the Council of the European Union:

1. Council Directive (EU) 2016/1164 of July 12, 2016 laying down rules against tax avoidance practices that directly affect the functioning of the internal market, and

2. Council Directive (EU) 2017/952 of May 29, 2017 amending Directive (EU) 2016/1164 as regards hybrid mismatches with third countries

- Hybrid element – the same payment/instrument/entity/transfer/economic activity being classified differently in two tax jurisdictions involved;

- The fiscal measures relating to the aforementioned directives are aimed at implementing rules meant to neutralize the imported mismatches and the mismatches of hybrid elements that occur both between Member States and in relation to third-party States, and which are exploited by taxpayers in order to avoid the payment of fiscal obligations.

- In order to combat the avoidance of the payment of the corporate tax, the Romanian taxpayer is required to apply one of the following rules (depending on the nature of the mismatch identified):

• Refusal of the right of deduction for a payment/expense/loss,
• A payment is included in the taxable income.

I. Amendments to Order No. 1802 of December 29, 2014 - Part I for the approval of the Accounting Regulations regarding individual annual financial statements and consolidated annual financial statements:

• Upon recording the adjustments for the depreciation of receivables and upon recording provisions, the principle of prudence also applies when preparing periodic reports according to the law;
• Such a method of recognition must be applied consistently from one reporting period to another.

II. Amendments to ORDER No. 897/2015 of August 3, 2015 for the approval of the Methodological Rules regarding the reflection in accounting of the main operations of merger, division, dissolution and liquidation of companies, as well as of the withdrawal or exclusion of some associates from the companies:

Two amendments have been proposed with regard to absorption mergers:

• at the time of drawing up the delivery-receipt protocol, the absorbing company must ensure that the absorbed company has fulfilled its obligations stipulated by the law which concern the drawing up and submission of annual financial statements, as established by the accounting law;
• if the absorbed company exists in legal terms at the end of the financial reporting year, it must draw up and submit the financial statements according to the law.

If the absorbed company is deregistered (deleted from the Register) during the period between the date on which the annual financial statements should be drawn up and the deadline for submitting them, such statements will be filed before the cessation of existence of the absorbed company.

Council Directive (EU) 2019/475 of February 18, 2019 amending Directives 2006/112/EC and 2008/118/EC as regards the inclusion of the Italian municipality of Campione d’Italia and the Italian waters of Lake Lugano in the customs territory of Union and in the territorial application scope of Directive 2008/118/EC.

The transposition of this Directive aims at:

• the inclusion of the Italian commune Campione d’Italia and of the Italian waters of Lake Lugano in the customs territory of the Union and in the territorial application scope of the Council Directive 2008/118/EC in relation to excise duties;
• maintaining the above mentioned territories outside the territorial application scope of Council Directive 2006/112/EC, as regards VAT.