(P) Tax Flash: Fiscal Code ammendements

Emergency Ordinance No. 24 / 2012 amending Law 571 / 2003 regarding the Fiscal Code and reglementation of certain fiscal-financial measures - published in Official Gazette 384 / 07 June 2012 Fiscal Code Amendments Amendments to the Fiscal Code introduced by Emergency Ordinance No. 24 / 2012 enter into force starting from 1 July 2012, with certain exceptions. The main amendments to the Fiscal Code include the following: Corporate Income Tax Expenses with limited deductibility Provisions limiting deduction right for fuel expenses have been extended to other expenses related to motor road vehicles (e.g. expenses with operation, maintenance, repairs). Thus, according to the new provisions, deduction of expenses related to certain types of vehicles, which are not exclusively used for business purposes, is limited to 50%. Also, it is mentioned that, for vehicles used for certain specifically mentioned activities (e.g. used for suplying services against consideration, used as merchandise for commercial purposes, used by sales and purchase agents, etc.) the expenses related to such vehicles are fully deductible. Expenses with operation, maintenance and repairs related to vehicles used by persons having management positions within the legal entity are deductible at not more than one vehicle per person having such attributions, within the limit mentioned above. Provisions Provisions/impairment adjustments for receivables taken over from credit institutions for recovery purposes are deductible, under certain conditions, within the limit of the difference between the value of debt taken over and the amount to be paid to the transferor. Income tax Income from independent activities Deductibility of expenses related to motor road vehicles not used only for business purposes is limited to 50%. Moreover, expenses related to vehicles used for certain specifically mentioned activities (e.g. used for supplying services against consideration, used as merchandise for commercial purposes, used by sales and purchase agents, etc.) are not subject to this provision since these expenses are fully deductible for income tax computation purposes. For owned or in use motor road vehicles which do not fall under this limitation, the general rules of deductibility shall apply according to the norms. Investment income The main amendment brought by Ordinance No. 24 / 2012 is that, starting 1 January 2013, no advance income tax payments shall be made during the fiscal year in relation to transactions with titles (other than shares and transferable securities in case of closed companies). As such, starting 1 January 2013, taxpayers incurring gains/losses from such transactions will submit only the statement regarding the income obtained, by the 25th of May inclusively of the year following the one during which the income/loss incurred. Also, among others, each broker or income payer shall have the obligation to transmit to each taxpayer, in writing, information regarding the total gains/losses for the transactions performed during the year, by the last day of February of the current year for the previous year. In addition, the income tax due by the taxpayer for the taxable gain, if the case, will be computed by the relevant tax authority based on the statement regarding the income obtained. For gains/losses derived from these transactions up to 1 January 2013, the tax obligations in force at the moment they are obtained shall apply.