The recent fiscal policy changes for the year 2024, bringing important updates to the profit tax, highlights the followings:

Adjustments of Fiscal Loss Recovery: Starting from the fiscal year 2024, the period for recovering fiscal losses is reduced to the next 5 years, with the possibility to recover only 70% of taxable profits.

Elimination of Fiscal Credit for Cash Registers: The fiscal credit for purchasing cash registers is eliminated, signifying a shift in governmental strategies related to business equipment.

Limitations on Housing and Social Office Expenses:

• Expenses related to company housing are limited to 50%, with the elimination of the 10% fiscal increase.
• Social offices located in residential buildings have a limited fiscal depreciation deductibility of 50%. A provision is introduced regarding the personal use of the social office, considering the company’s expense in the interest of the associate.

Private Scholarships Expenses:

• Expenses associated with private scholarships are removed from the list of deductible expenses for corporate income tax.
• Expenses for private scholarships, previously excluded from fiscal credit, are now deductible, with a monthly limit of 1,500 lei and not exceeding 5% of personnel expenses, along with other included costs within this limit.

Capped Adjustments for Commercial Debt Depreciation: Adjustments for the depreciation of commercial debts are capped at 30% for those made after January 1, 2024.

Limitations on Fiscal Depreciation of Social Offices in Residences: For social offices not exclusively used for economic activities and located in residential buildings, fiscal depreciation deductibility is limited to 50%.

Calculation of Fiscal Result for Permanent Offices: The method of calculating the fiscal result for a permanent office is determined by applying the provisions of the 2010 Report on the allocation of profits to permanent offices issued by the OECD.

Deductible Interest with Intermediate Limit: Interest is deductible within an intermediate limit of 500,000 euros for interest payments to affiliated entities.

Introduction of Minimum Tax and Additional Levies:

• • A minimum tax of 1% on turnover is imposed for companies with a turnover exceeding 50 million euros.
  • Additional tax: 2% of turnover for banks and 0.5% of turnover for companies in the oil and gas sector.

These changes present challenges for businesses.

We recommend consulting with tax experts to ensure preparedness for the new fiscal regulations.