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Submission of Tax Declaration in Romania

After January 2007, when Romania joined the European Union, a couple of government reforms were implemented in order for the country to align to the EU conditions. Changes and reforms have brought modernization and infrastructure investments to Romania, with funding from the EU. Romania has an excellent development potential and growing business environment due to its strategic position. Nowadays, it has become much easier to predict business change in Romania, as it has become one of the fastest growing economical member in EU.

The most recent change in the Romanian legislation refers to the submission of tax declaration provided by Emergency Ordinance no.18/20181 that was published in the Official Journal of Romania on 23 March 2018. This new regulation brings simplified guidelines for declaring and paying social security contributions and income taxes. A new unique tax return intended to simplify the process for individuals was introduces in terms of declaration and payment. Individuals that are not tax residents can also benefit from this new law regulation and will be applicable for incomes from 2017 and estimated incomes for 2018.

The new unique tax return is meant to reunite seven separate tax returns in one, through which individuals must declare personal income obtain from inside or outside Romania or reconcile salary income. This tax is applicable to tax non-residents that obtain income from Romania or to tax residence who obtain income from Romania or abroad. From 2019, this tax return will only be submitted online by following a specific procedure.

The unique tax return is used to declare social security contributions and income tax (intellectual property, independent activities, capital gains, farming, gambling or rental) or to reconcile salary income taxes. The due amount will be paid based on an assessment that will transparently and independently be made by the individual taxpayer and not by the tax authorities as before. Still, for 2017, the authorities will still asses the income. The deadline for 2017 income is 15 July 2018, and starting with 2019 will be 15 March. On the other hand, the taxpayer can opt for advance payment by estimating the income and getting a bonus, for example 5% in credit of the estimated annual income tax will be granted if they pay before 15 December 2018 for year 2018. In addition, if you fill in the unique tax return form online you will also get 5% credit. Starting with 2019, the bonus will be set annually.

According to ANAF, the main categories of income that individuals must declare are:

- agricultural activities for which the net income is set in a real system;
- fish farming and / or forestry;
- gambling made by individuals as a result of participating in remote gambling and poker festivals;
- self-employment;
- the transfer of securities and any other transactions in financial instruments, including financial derivatives, as well as the transfer of financial gold;
- artistic and sporting activities as performers or athletes;
- the disposal of the use of the property, excluding the lease income.
by Cristian Darie

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