Fin Min announces new tax on amounts transferred abroad by multinational companies. Income tax down to 10pc


Get real time updates directly on you device, subscribe now.

The Government will tax the amounts that multinational companies transfer abroad “in an attempt to reduce its tax base,” Finance Minister Ionuţ Mişa has announced.

“The European directive on combating the outsourcing of profits of multinational companies – EU Directive 1164/2016 is introduced. The multinationals that have so far avoided paying taxes in Romania will no longer be able to do so. A limited interest deduction will be granted and tax will be enforced on the amounts transferred abroad by the multinationals, in the attempt to reduce the tax base. Hence, transfers by groups of companies to the branches in fiscal paradises will be prevented and no tax benefits will be offered through abusive agreements between companies,” the minister said.

He added that it is also aimed the confiscation of the means of transport as means to combat tax evasion. “It’s about all means of transport – car, truck, ship, plane, train – used by tax evaders in addition to the confiscation of goods involved in the evasion,” the Finance Minister said.

Income tax down to 10% from 16%

The Finance Minister informed that on Thursday a draft government ordinance was debated at first lecture, to amend the tax code, by which as of 2018 the income tax will decrease from 16% to 10%, whereas the social security contribution (CAS) will fall from 39.25% to 37.25%.

A MFP release informs that the decrease in income tax will be enforced for employees, pensioners, authorised individuals (such as lawyers, doctors, notaries), rent, interest, prizes, lease, agricultural activities, investments and income from other sources.”

The draft ordinance also includes the cut of social security contributions from 39.25% to 37.25%. “Of the overall 22.75% contributions paid by the company, 20 percentage points will be transferred to the employee. Out of the gross wage, 35% will be contributions paid by the employer for the employee,” the minister said.

- Advertisement -

Leave A Reply

Your email address will not be published.

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More