The practice of gambling in 2021
Changes in taxation and tax procedure in 2021
Article from the series „Gambling practice”, by Anchidim Zagrean, vice-president ROMBET
The beginning of 2021 brings a series of changes, regarding the fiscal practice or fiscal procedure, in the activity of gambling organizers, by the entry into force of the provisions contained in Law 295 published in OJ 1266 of December 21, 2020 and in Law 296 published in OJ 1269 of December 21, 2020.
I. Law 296 of 2020 amends and completes the Fiscal Code, among which are highlighted:
1. Changes to definitions and tax residence
I. 1. Place of effective management – the place where, unless proven otherwise, the foreign legal entity performs operations that correspond to economic, real and substantial purposes and where at least one of the following conditions is met:
a) The economic-strategic decisions necessary for the management of the activity of the foreign legal entity as a whole are taken in Romania by the executive directors or the members of the board of directors; or
b) At least 50% of the executive directors or members of the board of directors of the foreign legal entity are resident in Romania;
I. 2. The provisions regarding the profit tax are also applicable to the foreign legal entity, resident in Romania, according to the place of effective management. The residence in Romania, of the foreign legal entity, is established by the competent central fiscal body and notifying the foreign legal entity if it retains the residence of the foreign state or if it becomes a foreign legal entity resident in Romania;
I.3. Establishment of the fiscal group, in the field of profit tax, in order to consolidate the group.
2. Changes to corporate income tax
a) The expenses incurred by the employer, related to the telework activity, are deductible expenses for determining the fiscal result;
b) The rules on fiscal consolidation, at the level of fiscal group, will give the possibility to the companies from the same fiscal group to compensate the profits with the losses, following to pay tax only on the difference resulted after compensation, by applying the tax rate.
3. Changes to the income tax of micro-enterprises
a) From the taxable base, for the calculation of the income tax of the micro-enterprises, the dividends received from a Romanian legal entity are deducted;
b) In order to be included in the conditions regarding the income ceiling (1,000,000 euros), the same elements that constitute the taxable base will be taken into account.
4. Changes to income tax
a) The following are not taxable, for the purposes of establishing income tax:
• benefits in the form of the personal use of vehicles which are not used solely for the purpose of economic activity, owned or used by legal persons applying the micro-enterprise tax regime or activity-specific tax;
• the amounts granted to employees who carry out telework activities, in order to support the expenses with the utilities at the place where the employees carry out their activity such as: electricity, heating, water, data subscription, purchase of office furniture and equipment – within the limits established by the employer, the employment contract or the internal regulation – as well as within the limit of a monthly ceiling of 400 lei corresponding to the number of days in the month in which the natural person carries out telework activity. The amounts will be granted without the need to present supporting documents;
• cover the costs of epidemiological testing and / or vaccination of employees to prevent the spread of diseases that endanger the health of employees and the public.
b) Gift vouchers granted by a company to other categories of beneficiaries are treated as income from other sources, for which only a 10% income tax is due;
c) Taxpayers with withholding tax are required to file a tax return calculation and withholding tax for each beneficiary of income with the competent tax authority by the last day of February, including the current year for the expired year, except for payers of income from salaries and assimilated to salaries, payers of income from intellectual property rights, payers of income under sports contracts, income from rent or from associations with legal persons, who have the obligation to submit the declaration on the obligations to pay social contributions, income tax and nominal records of insured persons.
5. Changes to social contributions
a) The following are not included in the basis for calculating social contributions:
• benefits in the form of personal use of vehicles which are not used solely for the purpose of economic activity, owned or used by legal persons applying the micro-enterprise tax regime or activity-specific tax;
• the amounts granted to employees who carry out telework activities to support the expenses with utilities at the place where the employees carry out their activity such as: electricity, heating, water, data subscription, purchase of furniture and office equipment – within the limits established by the employer. work or internal regulations – within a monthly ceiling of 400 lei corresponding to the number of days in the month in which the individual carries out telework activity. The amounts will be granted without the need to present supporting documents;
• covering the costs of epidemiological testing and / or vaccination of employees to prevent the spread of diseases that endanger the health of employees and the public;
b) The single declaration regarding the income tax and social contributions will be submitted until May 25 inclusive.
6. Changes to the value added tax
a) Taxable persons registered for VAT purposes, who have their registered office of economic activity in Romania and whose turnover in the previous calendar year did not exceed the ceiling of 4,500,000 lei, are eligible for the application of the VAT collection system;
b) The adjustment of the VAT tax base is also made if the total or partial value of the goods delivered or services provided has not been collected from the natural persons beneficiaries, within 12 months from the payment term established by the parties or, failing that, from the date of issue of the invoice, unless the supplier or provider and the beneficiary are related parties.
Extension of the deadline of January 1, 2021, provided in Law 296, for entry into force, by establishing a new deadline – 01.01.2022 – established by GEO 226 of 2020 for:
1. Full deductibility, of adjustments for the depreciation of receivables, when calculating the fiscal result, if the receivables cumulatively meet the conditions provided by the Fiscal Code;
2. The reduced rate of 5%, for the calculation of VAT, shall apply to the supply of dwellings which have a usable area of not more than 120 m2, excluding household annexes, and whose value, including the land on which they are built, does not exceed 140,000 euro.
II. Law 295, of 2020, amends and completes the Fiscal Procedure Code, among which are highlighted:
1. Changes regarding the establishment of the situations in which the nullity of an administrative-fiscal act can be ascertained
a) If the tax authority does not present the arguments for which it does not take into account the previous opinion issued in writing or the solution previously adopted, for similar cases, by the tax authority or the court, if the taxpayer or payer previously submitted to the tax authority issuance of the administrative-fiscal act, the respective opinion or solution;
b) In the situation where the fiscal body does not comply with the considerations of the decision to settle the appeal, in case of issuing the new administrative-fiscal act;
c) By issuing the tax inspection report and the taxation decision or the decision not to modify the tax base by the tax inspection body after the termination of the tax inspection, respectively the issuance of the verification report and the taxation decision, by the tax authority, after termination of the verification of the personal fiscal situation;
d) When the tax authority issues a tax inspection report or verification of the personal tax situation and a tax decision or a decision to modify the tax bases or a decision not to modify the tax bases or a decision to regularize the situation or a decision to terminate the tax procedure, verification of the personal tax situation – in the event that findings are made in connection with the commission of acts provided by criminal law in connection with the means of proof – on establishing the tax base or customs value, which are subject to tax inspection or customs control.
2. Changes regarding the development of the fiscal inspection activity
a) If the fiscal inspection has started and the termination of the legal person or the death of the natural person occurs, as subjects of fiscal law, the fiscal inspection continues with the successors of the respective person, if they exist. In this case, the tax claim is established in the name of the successors. If there are no successors, the tax inspection ceases;
b) The tax inspection is also suspended in the event that the tax inspection body is notified or is informed, during the tax inspection, that a legal proceeding is pending against the taxpayer or payer, in connection with the means of proof regarding establishing the tax base that is the object of the fiscal inspection or in the situation where the financial-accounting documents of the taxpayer were collected by the criminal investigation body, without being able to be made available to the fiscal inspection body;
c) The head of the tax inspection body may decide to re-verify certain types of tax obligations, for a certain taxable period, at the proposal of the tax inspection body designated to carry out the inspection or at the taxpayer’s request, if the following cumulative conditions are met:
• after the end of the tax inspection, additional data appear that were unknown to the tax inspection body or, as the case may be, to the taxpayer, at the date of the tax inspection;
• additional data influence the results of the completed tax inspection;
d) The taxpayer may request re-verification in situations where he cannot correct the tax returns;
e) The result of the tax inspection shall be recorded, in writing, in a tax inspection report, which presents the findings of the tax inspection body from a factual and legal point of view and their tax consequences, unless the findings are made in in connection with the commission of certain acts provided by the criminal law, in connection with the means of proof regarding the establishment of the tax base that are the object of the fiscal inspection, and for which the criminal investigation bodies are notified.
3. Changes to the results of the anti-fraud control
a) At the end of the operative and unexpected control, a control report or control act is concluded, in accordance with the law. A copy of the control report or control act shall be communicated to the taxpayer or payer;
b) The report or the control act constitutes a means of proof, including in the situation when in its content are presented the fiscal consequences of the irregularities found;
c) The taxpayer or the payer may express his point of view regarding the findings mentioned in the minutes or the control act within 5 working days from the communication.
4. Changes of the procedure for challenging the decision to institute precautionary measures
a) By derogation from the provisions of the Law on Administrative Litigation, against the decision ordering the establishment of precautionary measures, the interested party may file an action for annulment, within 30 days from the communication, to the competent administrative litigation court, according to the amount of claims in respect of which these precautionary measures have been instituted, without the need to go through the prior procedure. The request is judged urgently and especially;
b) The procedure provided by art. 200 of the Code of Civil Procedure is not applicable, and the objection is not mandatory. The decision pronouncing the annulment of the decision is legally enforceable. It may be appealed within 15 days of the communication. The appeal is not suspensive of execution.
5. Review of the settlement decision
a) The decision issued in resolving the appeal may be re-examined, by the competent resolution body, at the request of the taxpayer or payer, for the following situations:
• the application in the present case of certain legal provisions which would have fundamentally changed the solution adopted was not taken into account;
• after the issuance of the decision by the appeal settlement structure, a decision is issued by the Central Fiscal Commission, which offers a different interpretation to the legal provisions incident to the case;
• before or after the issuance of the decision by the structure for resolving the appeal, a court decision of the High Court of Cassation and Justice of Romania is adopted either for the resolution in principle of legal issues or an appeal in the interest of the law the issue under analysis, different from that of the decision to resolve the appeal;
• before or after the issuance of the decision by the appeal settlement structure, a decision of the Court of Justice of the European Union is adopted, which is contrary to the decision to settle the administrative appeal;
b) The request for re-examination may be submitted:
• in the case of the decisions for solving the appeals that are the object of the action in administrative contentious, during the trial of the case;
• in the case of decisions to resolve appeals for which no action has been filed in administrative litigation, within one year from the date of communication of the decision to resolve, under penalty of forfeiture, even if the tax obligation has been cleared;
c) Following the re-examination of the issued decision, in resolving the appeal, the competent resolution body may confirm or withdraw it, issuing a new decision;
d) The decision issued, following the request for re-examination, may be communicated until the date of concluding the debates on the merits before the first instance. If the competent settlement body has confirmed the initial decision, the action in administrative litigation shall continue;
e) If the decision issued, following the request for re-examination, has not been communicated before the date of conclusion of the debates on the merits, before the first instance, it shall not be communicated and shall not produce any legal effect.
We return, in the following issues of the magazine, with other opinions on the activity of gambling…
