Legislative Summary October 2005

Taxation Services
October 2005

In this issue:

- Fiscal Code
- Fiscal Procedure
- Banking and Capital Market
- Insurance
- Customs and Excise Duties
- Work Permits
- Social Security
- Company Law
- Miscellaneous
- Republishing

FISCAL CODE

Amendments to methodology for reimbursement of negative VAT amounts
(Order 1330/2005 published in Official Gazette 883/3 October 2005)

The Order provides details on the procedure used by the fiscal authorities to resolve VAT returns with negative VAT amounts claimed.

Clarifications on capital gains taxation
(Order 1499/2005 published in Official Gazette 919/14 October 2005)

Please refer to our Tax Alert No. 44/18 October 2005.

FISCAL PROCEDURE

Recent amendments on state aid
(Emergency Ordinance 129/2005 published in Official Gazette 887/4 October 2005)

Please refer to our Tax Alert No. 42/4 October 2005.

Application of certain provisions in Fiscal Procedure Code
(Order 519/2005 published in Official Gazette 893/6 October 2005)

The Order provides instructions for the tax authorities on Fiscal Procedure Code provisions referring to appeals (i.e., method of submission, template and content, terms of submission, method of retraction).

BANKING AND CAPITAL MARKET

Interest rate for October
(Circular 35/2005 published in Official Gazette 901/7 October 2005)

The reference interest rate for the month of October is 7.72% per annum.

Registration of group of companies with Securities Commission
(Order 51/2005 published in Official Gazette 888/4 October 2005)

Instructions on how company groups (as defined by the capital market legislation) should be registered with the National Securities Commission are summarised in this order. It will also be available on the official website of the Securities Commission (http://www.cnvmr.ro).

INSURANCE

Amendments in Insurance and Reinsurance Law
(Law 283/2005 published in Official Gazette 897/ 7 October 2005)

The Law provides the definition of franchise and clarifies the use of the amounts collected as Guarantee Fund and Street Victims Protection Fund.

Moreover, it lays down new levels of fines and penalties in case of non-compliance with provisions of the insurance legislation.

Contribution to the Street Victims Protection Fund
(Order 3123/2005 published in Official Gazette 931/19 October 2005)

Please refer to our Tax Alert No. 46/19 October 2005.

CUSTOMS AND EXCISE DUTIES

Reimbursement procedure for harmonised excise duties
(Order 1530/2005 published in Official Gazette 951/26 October 2005)

A specific reimbursement procedure for harmonised excise duties based on fiscal risk analysis has been approved.

This reimbursement procedure refers to supplies of excisable goods for which an indirect exemption is granted as per the provisions of the Fiscal Code, including, inter alia, supplies of mineral oils and alcoholic products used for specific activities and supplies of excisable goods made to particular organisations.

Authorisation for import-export certificates for agricultural products
(Law 300/2005 published in Official Gazette 955/27 October 2005)

Specific provisions were introduced on authorisation for import and export of certain agricultural products based on import/export certificates, in line with EC Regulation. The legislation provides conditions and procedures for obtaining such certificates and will enter into force in 30 days.

Conditions and procedures for guarantees related to import/export of agricultural products
(Law 299/2005 published in Official Gazette 956/27 October 2005)

Provisions for setting up a specific guarantee system have been introduced for import and export of agricultural products, in line with the EEC Regulation no. 2220/1985 and Section IV of EC Regulation 1291/2000. The quantum of the guarantees will be established through a subsequent Government Decision. The new law revokes an earlier Decision on bank guarantees for export licences for goods under the quota regime. The law enters into force in 30 days.
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Ratification of trade with processed agricultural products
(Law 303/2005 published in Official Gazette 965/31 October 2005)

The Law ratifies an earlier Decision providing, inter alia, customs duty rates, related tariff quotas and export duty drawbacks applicable to the trade of specific processed agricultural products between Romania and the EU during 2005-2007.

WORK PERMITS

Amendments to legislation on expatriate secondment in Romania
(Emergency Ordinance 130/2005 published in Official Gazette 892/5 October 2005)

Please refer to our Tax Alert No. 43/5 October 2005.

SOCIAL SECURITY

Approval on social security treaty between Romania and Germany
(Decision 1214/2005 published in Official Gazette 942/21 October 2005)

The Government approved the Arrangement on the Agreement between Romania and Federal Republic of Germany in the field of social security. The Agreement between the two countries was signed in Bucharest in April 2005.

Ratification of social security convention between Romania and Luxembourg
(Law 298/2005 published in Official Gazette 963/31 October 2005)

The social security convention was ratified by the Parliament.

Among other things, the convention provides that an individual employed in any one territory seconded by his employer for activities in the other territory will continue to be subject to the legislation of the first territory for a period not exceeding 12 months. This period may be further extended for a maximum 12 months, with the approval of the relevant authority from the second territory.

COMPANY LAW

Minimum share capital for joint stock companies and joint stock partnerships raised
(Law 302/2005 published in Official Gazette 953/27 October 2005)

Please refer to our Tax Alert No. 47/28 October 2005.

MISCELLANEOUS

Amendments to the law on prevention of money laundering
(Emergency Ordinance 135/2005 published in Official Gazette 897/7 October 2005)

Clarifications were provided on exemption from reporting obligations for auditors, accountants, lawyers and the notary public.

Law 656/2002 on the prevention of money laundering will be republished.

Reporting procedure on data related to packaging and packaging waste
(Order 927/2005 published in Official Gazette 929/18 October 2005)

The Order provides details for reporting obligations for importers and producers of packaged products.

Importers and producers of packaged products introducing on the internal market less than 1,000 kg of packaging per year shall report to the local environment protection authorities on the total quantity of packaging they introduced in the domestic market.

The Order repeals a previous regulation on the procedure for reporting data related to packaging and packaging waste.

REPUBLISHED LEGISLATION

Regime of foreign investments in Romania
(Government Ordinance 66/1997 republished in Official Gazette 928/18 October 2005)