2016 begins with the decrease in the standard rate of VAT from 24pct to 20pct, with 9pct VAT for water, both drinking water as well as water for industrial and agricultural use, with a dividend tax of 5pct , down from 16pct, with a differentiated tax regime for micro-enterprises, but also with higher taxes on buildings.
The first provision is included in the new Fiscal Code, which will take effect on January 1, 2016, and the others were approved after promulgating the Tax Code, through a Government Ordinance.
In the case of taxing micro-enterprises, the changes entail increasing the ceiling for admission to the category of micro-enterprises, from 65,000 euros to 100,000 euros, and a system of differentiated tax rates depending on the number of employees, between 1pct and 3pct. Thus, the tax will be 1pct for the micro-enterprises that have over two employees, 2pct for those with one employee and 3pct for those with no staff.
Also from January 1, 2016 there will be no more tax on special buildings in agriculture.
The over excise duty on fuels, worth 7 eurocents per one liter remains in effect for one more year, although the first version of the Tax Code provided for its elimination from January 1, 2016. The normative act stipulates cancelling this tax as of January 1, 2017.
However, the new taxing formula for buildings will be introduced on January 1, 2016 and it will lead to significant tax increases, especially for small companies that are headquartered in their owners’ home. Additionally, local authorities may decide applying a tax rate of between 0.08pct and 0.2pct for the building used as a residence, and between 0.2pct and 1.3pct for those used in economic activities.
Also from 2016, those earning incomes from independent activities will be required the pension contribution, even if they are paid also salaries. Instead, for these incomes, the basic deduction rises from 20pct to 40pct. Also, freelancers will pay, in addition to the 16pct income tax, also the health insurance contribution of 5.5pct, and the pension contribution of 10.5pct.