Starting from the 1st of January 2023, it will apply the facility regarding tax exemption of reinvested profit to investments in fixed assets used in production and processing activity and in fixed assets representing refurbishment.
The profit invested in machinery, fixed assets used in production and processing, and fixed assets representing refurbishment are tax exempted.
The taxpayers that benefit from tax exemption provisions must keep the respective assets for at least half of their useful economic life, established according to the applicable accounting standards, but not more than five years.
Not complying with this condition, for the respective amounts, both tax on profit and late payment penalties are calculated according to the law since the date of using the facility.
Fixed assets, apart from the actives used in production and processing, actives representing refurbishment for which the exemption is applied are the ones mentioned in subgroup 21, respectively, class 2.2.9 of the Catalogue regarding classification and expected life span of usage of fixed assets approved by Government decision.
The business environment looks forward to published clarification through the Order of the Ministry of Finance regarding the fixed assets used in production and processing and the ones representing refurbishment (to be issued in 120 days after the date of publishing in the Official Gazette).
The companies should analyze the cash-flow forecast and decide if it is convenient to apply this tax incentive on profit tax.
Our team of professional is available for any clarifications or additional details required in your analysis. The above information represents just a summary of aspects we consider relevant in the recently published legislation. This is not exhaustive disclosure of information and it is not intended to be used as advice on any particular matter. We invite all readers to contact us for further clarification of any specific issue. Argus Audit team and its associates disclaim liability in any action taken by a third party in reliance exclusively on summarized information presented in our publications.