The Government has decided (Decision 759) on a number of significant amendments to the Profits Tax legislation (Ordinance 70/1994). The amendments that may have an immediate impact on taxpayers are as follows:
1. Repairs and maintenance expenditure will be deductible in full in the period it is incurred for both small and large taxpayers. Such expenditure was originally deductible up to a limit of 5% of total fixed assets (for small taxpayers) or 5% of the relevant asset pool (for large taxpayers).
2. Large taxpayers will be entitled to reduce their monthly instalment of advance tax if the tax calculated on actual profit for the month is less than the tax based on the "prior years results".
3. Interest related to loans from both domestic and foreign sources, backed by a guarantee provided the Government or a financial institution appointed by the Government (for example Eximbank) will be deductible in full in the year it is incurred. It will not be limited to the amount of interest revenue plus 20% of other revenues. The limit applies for all other loans.
The above amendments are effective 1 October 1995.
Contact information
Further information can be obtained from:
Ron Barden Price Waterhouse Romania Union International Center 11 Campineanu Street Sector 1, Bucharest Romania
Tel No.: 40-1-311-2455
Fax No.: 40-1-312-3334
Disclaimer
The above information is a short summary of recently published information and is not intended to be advice on any particular matter. Price Waterhouse expressly disclaims any liability to any person in respect of anything done in reliance of the contents of this publication.
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