The Minister of Finance, Eugen Teodorovici, announced on May 15 that the lump-sum tax will be introduced starting January 1, 2016. He specified that the introduction of the lump-sum tax will be approved by Parliament and also announced that the mandatory taxation of tips will be eliminated.
“We will likely introduce a lump-sum tax starting January 1 next year. (…) There is a project in Parliament currently at the Chamber of Deputies, and we will try to introduce the provisions of this lump-sum tax into the Fiscal Code after tourism employer associations review the text once more,” Teodorovici stated.
In the draft Fiscal Code, posted last summer on the Ministry of Finance website, there was a new chapter regarding the tax on specific activities. The targeted sectors were: maintenance and repair of motor vehicles, hotels and other similar accommodation facilities, holiday and short-stay accommodation facilities, trailer parks, campsites and camps, other accommodation services, restaurants, event catering activities, other food services, bars, and other beverage serving activities.
Companies that have over 70% of their income from these activities will pay the specific tax.
Other conditions are: a net annual turnover of up to 50 million EUR, equivalent in lei, total assets of at most 43 million EUR, and an average annual number of employees of less than 250.
The calculation method differs depending on the type of activity. For example, for companies whose object of activity is the maintenance and repair of motor vehicles, the formula is:
Annual lump-sum tax/unit = 12*(s*A +z *A +t* A+m*A+v*A), where:
12 – number of months
s – coefficient for car wash activities
z – coefficient for painting activities
t – coefficient for bodywork activities
m – coefficient for mechanics and PTI (ITP) activities
v – coefficient for tire service (vulcanization) activities
A – the surface area where each activity is carried out (m2)
unit = location where activities are carried out
The provisions in the draft Fiscal Code are taken from the government project from last autumn.
On May 15, the minister held consultations regarding the taxation of tips with representatives of the HoReCa industry, including the home delivery market segment, as well as representatives of employer and trade union organizations in the taxi service provider industry.
Source: Mediafax
Frequently Asked Questions
When will the lump-sum tax be introduced in Romania?
The Minister of Finance announced that the lump-sum tax is scheduled for introduction starting January 1, 2016.
Which industries are targeted by the lump-sum tax?
The tax targets specific sectors including hotels, restaurants, bars, and motor vehicle maintenance and repair services.
What is the status of the mandatory tip tax?
The Minister of Finance announced that the mandatory taxation of tips will be eliminated.