On 15 July 2022 was published in the Official Monitor the Ordinance amending and supplementing Law no. 227/2015 on the Tax Code, repealing certain normative acts and other financial-fiscal measures.
The modifications envisage topics such as: VAT, excise duty, corporate income tax, private income and local taxes.
The most relevant ones for capital market will enter into force as of 1 January 2023.
-
In accordance with domestic legislation, the tax rate on dividends distributed by Romanian company after 1 January 2023 will be increased from 5% to 8%.
-
Dividend payments made towards pension funds are no longer exempt from withholding taxes.
-
New tax rule will be introduced on capital gains derived by individuals who invest through Romanian intermediaries. Thus, beginning with 1 January 2023 Romanian intermediaries will have the obligation to calculate, withhold, declare and pay income tax for every transaction, on income obtained from Romania as well as on income obtained from abroad by individuals. For the capital gains obtained by individuals through Romanian intermediaries, taxation rates decrease from 10% to 1% or 3%, depending on the holding period (1% for holding periods longer than 365 days, 3% for periods shorter than 365 days).
-
The annual basis for calculating the social health insurance contribution is modified for individuals who obtain incomes from passive incomes including investment incomes. The annual basis for calculating the social health insurance contribution (10% tax rate) is:
o the level of 6 months minimum gross salaries per country, in case of incomes between 6 and 12 months minimum gross salaries;
o the level of 12 months minimum gross salaries per country, in case of incomes between 12 and 24 months minimum gross salaries;
o the level of 24 months minimum gross salaries per country, in case of incomes more than 24 months minimum gross salaries.
Currently, the annual basis for calculating the social health insurance contribution is the equivalent of 12 months minimum gross salaries.
Impact on investors: Clients should take note of the above changes.