Tax-free reinvested profit gets green light from Gov’t

The exempt status will be valid for investments made as of July 1 and will be retained by December 31, 2015.

The Government approved during yesterday’s session the ordinance by which the tax exempt status for the reinvested profit will be valid as of July and will remain so, according to the draft law, until the end of December 2015, reports a press release. According to the draft law, the profit reinvested in producing or purchasing technical equipment, machines, appliances – employed with the purpose of getting taxable revenue, is exempt from taxing.
The companies benefiting from this have to keep in their patrimony the technological equipment for a period at least equal to half of their normal period of usage. The technological equipment transferred during the reorganization processes do not fall under this status, in the case that the beneficiary company takes over the reserve for the tax exempt profit, assuming all rights and obligations of the ceding company, as well as technological equipment sold during liquidation/bankruptcy.
“The tax payers who benefit from this law cannot opt out for accelerated amortization for those pieces of equipment,” reads the document. For July 1 – December 31, 2014, the law will be applied for investments made as of July 1, 2014, and the tax exempt status for the reinvested profit will remain by December 31, 2015, as a RON 137.5 million deficit was calculated for the state budget for this year.
‘We have all the approvals that we need. (…) This is an older request of the business environment and I am glad that we could do it,’ said Prime Minister Victor Ponta.
He asked the Ministers who received a note from the Ministry of Finance to begin the drafting of the normative acts necessary for the elimination of the 70 taxes.
The Romanian Businessmen Association called on the Government to support during their negotiations with the IMF the tax exempt status for the reinvested profit, a higher financing of programmes generating jobs and the cut of the wages taxes for economic development.

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