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Law No. 73 Of 12 July 1996 Approving Ordinance No. 70/1994 Income Tax

Original Language Title:  LEGE nr. 73 din 12 iulie 1996 pentru aprobarea Ordonanţei Guvernului nr. 70/1994 privind impozitul pe profit

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LEGE no. 73 73 of 12 July 1996 for approval Government Ordinance no. 70/1994 on corporate income tax
ISSUER PARLIAMENT
Published in OFFICIAL GAZETTE NO. 174 of 2 August 1996



The Romanian Parliament adopts this law + Article 1 Approval Government Ordinance no. 70/1994 on corporation tax, issued pursuant to art. 1 lit. a) of Law no. 72/1994 on the empowerment of the Government to issue ordinances and published in the Official Gazette of Romania, Part I, no. 246 of 31 August 1994, with the following amendments and additions: 1. Article 1 (1) (d) shall read as follows: " d) the associations between Romanian individuals and Romanian legal entities that do not give rise to a legal person, for the incomes made both in Romania and abroad. In this case, the tax due shall be calculated, withheld and paid by the legal person. " 2. Article 1 (2) shall read as follows: " (2) They are exempted from the payment of corporation tax: a) state treasury, for operations in public funds carried out through the general account of the treasury; b) public institutions, for public funds constituted, including for extra-budgetary income and availabilities made and used according to the Law on public finances, if the law does not provide otherwise; c) organizations of blind persons and invalids, associations of handicapped persons and their economic units, constitute according to the provisions of Law no. 21/1924 21/1924 for legal entities; d) benefit associations; e) cooperatives operating as protected units, specially organized, according to the law; f) units belonging to religious cults, for the incomes obtained from the production and valorization of objects and products necessary for the activity of worship, art. 1 1 of Law no. 103/1992 on the exclusive right of religious cults for the production of cult objects. " 3. Article 2 (2) shall read as follows: " (2) Taxpayers approved and certified by the Ministry of Finance under the law, who obtain income and in the field of gambling, as well as those who earn income from the activity of night bars and nightclubs, pay a share tax additional 22% on the part of the taxable profit that corresponds to the share of the income recorded from these activities in the total volume of income. " 4. Article 2 (5) shall read as follows: " (5) The profit tax rate in the case of taxpayers who annually make at least 80% of the income from agriculture is 25%. For the purposes of this ordinance, agriculture means the activity carried out in the field of vegetable crop, animal husbandry for prasila, production, breeding, selection and fish farming, from which raw materials are obtained with or without their further processing on their own capacity, except for the crop of flowers, ornamental plants and tobacco. ' 5. Article 3 shall be deleted. 6. Article 4 shall become Article 3. 7. Chapter 2 shall read as follows: "" CAP. 2 Determination of taxable profit ART. 4 (1) The taxable profit is calculated as the difference between the income from the delivery of movable property, the real estate for which the ownership, services rendered and works executed, including from the tanks of any source, and expenses incurred for their realization, from a fiscal year, plus non-deductible expenses. (2) For determining the taxable profit, the expenses are deductible only if they are related to the realization of income and those considered deductible according to the legal provisions in force When an expenditure is related to several activities, it shall be assigned to those activities. (. In determining the taxable profit, the expenses for which the deduction is not allowed shall be: a) profit tax, due according to the present law, as well as the income tax made from abroad; b) fines or penalties due to Romanian or foreign authorities; c) expenses for the protocol, advertising and advertising exceeding the limits provided for by the annual budget law; d) the amounts used for the establishment or increase of reserves and provisions above the legal limit, except for those created by banks within the limit of 2% of the balance of loans granted and the reserve fund according to Law no. 33/1991 on the banking activity, of the technical reserves of insurance and reinsurance companies created according to the legal provisions in the matter, as well as of the reserve fund, within 5% of the annual accounting profit, until it reaches the fifth part of the share capital; e) amounts exceeding the limits of expenses considered deductible, according to the annual budgetary law. (4) Sponsorship expenses are deductible within the limit of the quota provided for in Law no. 32/1994 on sponsorship. (5) The limits of deductible expenses are applied monthly so that at the end of the fiscal year they fall within the provisions of the legal provisions in force. (6) Taxpayers who have units without legal personality shall determine the limits of deductible expenses at the level of the unit with legal personality. ART. 5 The amortization of tangible and intangible assets is made in accordance with the legal provisions in force. ART. 6 Taxable profit established according to art. 4 and the corporate tax is calculated and highlighted monthly, cumulatively since the beginning of the fiscal year. ART. 7 (. The profit tax shall be reduced as follows: a) proportional to the share of persons considered, according to the law, handicapped in terms of their physical and intellectual capacity, for the taxpayer with a number of over 250 employees, who created protected, specially organized jobs, and employs at least 3% handicapped persons; b) by 50% in the case of taxpayers who collect income in foreign currency from the export of goods made from their own activity, from international services, for the part of the taxable profit that corresponds to the share of these incomes in the total revenue volume; c) by 50% for the profit used in the current fiscal year to modernize the manufacturing technologies or to extend the activity for the purpose of obtaining additional profits, as well as for investments aimed at protecting the environment, which materialize in tangible and intangible assets, after the consumption of other sources of investment financing, including investment loans. Amounts equivalent to the reduction shall be used with the same (2) The reduction provided in art. 50 50 of Law no. 77/1994 on the associations of employees and members of the management of companies that are privatized has priority over the above-mentioned discounts, which are applied in the order presented in this article. (3) The discounts mentioned in this article shall be calculated monthly, cumulatively from the beginning of the year, except for the one provided in par. ((1) lit. a), which is calculated monthly. (. The total amount of the reductions referred to in this Article shall not exceed 50% of the profit tax determined before the reductions are applied. ART. 8 a) attributable to a permanent establishment in Romania of a non-resident legal person; b) paid to non-resident legal or natural persons for services rendered in Romania; c) obtained from or in connection with real estate located in Romania, including the rental for the use of such property and the gain obtained by alienating a right on such property; d) paid as a result of the exploitation of natural resources located in Romania, including the gain from the sale of a right related to such natural resources; e) obtained from the estrangement of a property right; f) obtained from the alienation by a Romanian resident, legal person, of a property located abroad, other than the assets related to the conduct of an activity outside the territory of Romania; g) obtained from interest, if: the debt is guaranteed with real estate located in Romania; the debtor is a legal person or a natural person resident in Romania; the credit refers to a business carried out in Romania ". ((1) The payment of the corporate income tax shall be made quarterly, until the 25th of the first month of the following quarter, with the exception of the National Bank of Romania and of the banking companies that make monthly payments, until the 25th of the month the next one for which the tax is calculated (2) The National Bank of Romania and the banking companies have the obligation to pay in the account of the corporate tax, for December of each fiscal year, an amount equal to the tax due on November of the same year, until January 25 including the following year, following that the regularisation on the basis of the data from the balance sheet is carried out by the deadline provided for the submission of the balance sheet. (3) Taxpayers, other than those referred to in the previous paragraph, are required to pay on the account of the profit tax for the fourth quarter, until January 25 inclusive of the following year, an amount equal to the tax calculated and highlighted on October and November, and for December add an amount equivalent to the tax calculated for the month of November, following that the regularization on the basis of the data from the balance sheet is carried out by the deadline provided for the submission the balance sheet. ' (1) During the fiscal year, taxpayers have the obligation to submit their tax return until the payment term of the tax inclusive, following that after the completion of the corporate tax on the basis of the data from the annual accounting balance sheet the declaration of taxation for the expired fiscal year by the time limit laid down for the submission of the balance sheet (1) If the tax authorities consider that the establishment of the corporate tax has not been made according to this ordinance, they will make a new calculation of the tax and will communicate in writing to the taxpayer the way of establishing it. (2) The establishment of the corporate tax will be made by the fiscal body and if the taxpayer has not completed the tax return or has not provided the information necessary to determine the tax liability. (3) The task of proving that the establishment of the corporate tax by the tax authorities is not real lies with the taxpayer, which still has the obligation to submit the declaration of taxation. (4) The taxpayer must pay the profit tax that has been established according to par. ((1) and (2) on the basis of the notice of payment, on the date and place set out in the notice. (5) The competent fiscal body may conclude a written agreement with the taxpayer, according to which the latter is allowed to pay in installments the profit tax and net profit of the autonomous regions, if the agreement will facilitate the full collection of the payment obligation, in which the Ministry of Finance will establish the competences of the territorial fiscal units. (1) The payment of taxes regulated by this ordinance is made in lei. (2) In situations where the payment of income to the income beneficiary is made in foreign currency, the payment of taxes, taxes or possible late increases and fines shall be made in lei from foreign exchange at the rate in force on the date payment. The proof of their payment is made with the external payment document by the taxpayer who has the obligation to calculate, to retain and to pay the income tax in foreign currency to the banking company to which he has opened his account in foreign currency, accompanied by foreign exchange documents. " (1) If any amount representing a tax liability is not paid at the date fixed by this ordinance, the taxpayer is obliged to pay late increases to that amount for the period between the payment term. provided by the ordinance and the date on which the tax obligation is carried out, including. The increase will also be paid by the fiscal body for the amounts paid in addition as tax and unrepaid within the period provided in par. ((2). ' (1) In the case of an application for the refund of a tax payment over the amount due, submitted within the period established by this ordinance, the fiscal body will be able to compensate the amount of that payment, as determined by it, including the increase of the related delay, provided for by this ordinance, with other tax obligations of the taxpayer who made the payment above the level of the tax due. (2) The tax bodies shall return, on the basis of application, in the absence of other debts due to the taxpayer, the amounts paid in addition. (3) Compensation or restitution may also be made ex officio by the tax authorities, without a request for prior restitution. The taxpayer will also be notified about the measure. (4) No compensation of the tax with any debts held by taxpayers on the state, other than those of a fiscal nature, shall be admitted. " ((1) Losses registered until 1 January 1995 may be recovered from the taxable profit in 1995 and in the following years, according to the existing legal provisions until 1 January 1995. (2) The net loss recorded during the exemption period may be recovered from future taxable profits, according to the provisions of this ordinance. Net loss shall be calculated as the difference between the taxable profit for the exemption period and the losses recorded during the same period. ' (1) Until the implementation of the provisions of this ordinance, the Government will approve, at the proposal of the Ministry of Finance, the Instructions on the calculation methodology and the corresponding formulary regarding the profit tax. (2) For the unitary application of the provisions of this ordinance, the Fiscal Central Commission of direct taxes, coordinated by the Secretary of State responsible for the activity of the state's revenues The composition of the commission is approved by order of the Minister ((3) The orders, the forms of forms and the rules of completion regarding the corporate tax, as well as the decisions of the commission provided in par. (2) shall be published in the Official Gazette of Romania. The annual loss declared by taxpayers shall be recovered from the monthly taxable profit obtained in the following fiscal years without exceeding 36 months. " 8. Chapter 3 "Determination of taxable profit for small taxpayers" shall be deleted. 9. Chapter 4 becomes Chapter 3 and shall have the following title: "" CAP. 3 Determination of incomes of non-residents " 10. Article 12 (1) shall become Article 9, which shall read as follows: "" ART. 9 Taxpayers defined in art. 1 1 para. ((1) lit. b) and c) owe the tax for activities carried out in Romania. " 11. Article 12 (2) shall become Article 10, which shall read as follows: "" ART. 10 The income is related to an activity carried out in Romania, if: 12. Article 12 (3) shall become Article 11, which shall read as follows: "" ART. 11 Any other income that is not mentioned in art. 10 is income realized on the territory of Romania, if paid by a Romanian resident, by or through a permanent establishment in Romania. " 13. Article 12 (4) shall become Article 12 (1). 14. Article 12 (5) shall become Article 12 (2). 15 paragraphs 6 and 7 of Article 12 shall become paragraph 3 of Article 12, which shall read as follows: " (3) For the real reflection of the taxable profit of the permanent establishment, only the expenses related to the realization of its revenues shall be deducted, also considering the provisions of 4 4. " 16. Article 12 (8) shall become Article 12 (4). 17. Chapter 5 becomes Chapter 4, with the same title. 18. Article 15 shall read as follows: "" ART. 15 19. Article 16 (1) shall be deleted. 20. Paragraph 2 of Article 16 shall become paragraph 1 of Article 16 and shall read as follows: "" ART. 16 21 paragraphs 3 and 4 of Article 16 shall become paragraphs 2 and 3 of Article 16. 22. Article 17 shall be deleted. 23. Article 18 shall become Article 17, which shall read as follows: "" ART. 17 24. Article 19 becomes Article 18, which shall read as follows: "" ART. 18 25. Article 20 (1) shall become Article 19 (1), which shall read as follows: "" ART. 19 26 paragraphs 2 and 3 of Article 20 shall be deleted. 27. Article 20 (4) shall become Article 19 (2), which shall read as follows: " (2) In the case of a payment over the amount of the tax due, the delay increase shall be calculated after 30 days from the date of submission of the taxpayer's request for the refund of the difference according to 25. If the deadline set above is prior to the mandatory payment date of the tax, the increase shall be calculated from the date of the obligation to pay the tax. " 28. Article 20 (5) shall become Article 19 (3). 29. Article 20 (6) shall be deleted. 30. Article 21 shall become Article 20. 31. Article 22 shall become Article 21. 32. Article 23 shall become Article 22. 33. Article 24 shall become Article 23. 34. Article 25 shall become Article 24. 35. Article 26 becomes Article 25, which shall read as follows: "" ART. 25 36. Article 27 (3) shall be deleted. 37. Article 27 shall become Article 26. 38. Article 28 shall become Article 27. 39. Article 29 (4) shall become Article 28 (5). 40. Article 29 (5) shall become Article 28 (4), which shall read as follows: " (4) The deadline for the resolution of the application for revision of the taxation made by the fiscal body, registered at the general direction of public finances and financial control of the county or city of Bucharest, as well as of appeals registered with the Ministry of Finance, begins to run from the date on which the taxpayer submitted the documentation, according to the norms established by the Ministry of Finance for the resolution of cases, according to 41. Article 29 (6), (7) and (8) shall be deleted. 42. Article 29 (9) shall become Article 28 (6). 43. Chapter 6 becomes Chapter 5, with the same title. 44. Article 30 (1) shall be completed by letter e), which shall read as follows: "e) failure to submit within the period provided for by this ordinance the declaration of taxation, in the case of non-profit taxpayers, shall be sanctioned with a fine of 0.1% of the turnover for the period for which the declaration was not submitted." 45. Article 30 (4) shall be supplemented by the following: " ..., except art. 25 25 and 26. " 46. Article 30 shall become Article 29. 47. Chapter 7 becomes Chapter 6, with the following title: "" CAP. 6 Transitional and final provisions ' 48. Article 31 shall become Article 30. 49. Article 32 shall become Article 31. 50. Article 33 shall become Article 32, which shall read as follows: "" ART. 32 The methodology for calculating and reflecting in profit the operations related to the distribution of assets, in the case of partial or total liquidations of taxpayers, as well as their reorganization will be mentioned in the instructions provided in art. 36 36. " 51. Article 34 becomes Article 33, which shall read as follows: "" ART. 33 52. Article 35 (2) shall read as follows: " (2) The term of the net profit margin is the legal deadline for filing the balance sheet. In this case, the head provisions. 4 4 shall apply accordingly. '; 53. Article 35 shall become Article 34. 54. Article 36 shall be deleted. 55. Article 37 shall become Article 35. 56. Article 38 shall become Article 36, which shall read as follows: "" ART. 36 57. Article 39 shall be deleted. 58. Article 40 shall become Article 37. 59. Article 41 shall become Article 38, to which shall be added: " Decree no. 425/1972 on the tax on the benefits of joint ventures in the Socialist Republic of Romania and Government Decision no. 759/1995 for application Government Ordinance no. 70/1994 on corporation tax 'and the texts are deleted:' art. 68 68 of Law no. 64/1991 on patents of invention; art. 5 5 of Law no. 103/1992 on the exclusive right of religious cults for the production of cult objects; art. 13 lit. a) of Law no. 53/1992 on the special protection of handicapped persons; art. 5 5 para. ((4) of Law no. 80/1992 on pensions and other social security rights of farmers, as amended by Law no. 1/1994 1/1994. " + Article 2 Government Ordinance no. 70/1994 on the profit tax, with the amendments and completions brought by this law, will be republished in the Official Gazette of Romania, with the updating and corresponding renumbering of the texts. + Article 3 This Law shall enter into force on 1 January 1997. This law was adopted at the joint sitting of the Chamber of Deputies and the Senate of June 26, 1996, in compliance with the provisions of 74 74 para. ((2) and art. 76 76 para. (2) of the Romanian Constitution. CHAMBER OF DEPUTIES PRESIDENT ADRIAN NASTASE SENATE PRESIDENT prof. univ. dr. OLIVIU GHERMAN -------------