Multinationals active in Romania will no longer have a 100% tax exemption (deductibility) on the amounts received as loan reimbursements from their subsidiaries in Romania.

They would benefit from a deductibility ceiling of only 30% of these amounts, according to the draft ordinance that will change the Tax Code from January 1, 2018, reports local Ziarul Financiar.

Several companies that have made foreign investments in Romania have allocated those amounts as loans, rather than as a capital boost. The repayment of those loans from subsidiaries in Romania to parent companies are now exempt from tax. With this change, the Romanian government is trying to reduce the tax optimizations made by banks through selling non-performing loans at high discounts.

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