Corporate Income Tax

Starting with the date of 01.01.2024, the minimum turnover tax is introduced.

Applicability
Taxpayers who incurred a turnover higher than Euro 50,000,000 the previous year and whose corporate income tax is lower than the minimum turnover tax will be obliged to pay profit tax at the level of the minimum turnover tax.

Computation formula
The minimum turnover tax is computed by applying the following formula:
IMCA = 1% x (VT – Vs – I – A), where:

VT — total revenues, cumulated from the beginning of the fiscal year/amended fiscal year to the end of the quarter/calculation year, as applicable.
Vs — revenues that are subtracted from total revenues, cumulated from the beginning of the fiscal year/amended fiscal year to the end of the quarter/calculation year representing:

1. the non-taxable income provided for in Art. 23 and 24 of the Fiscal Code.
2. revenues related to product inventory costs.
3. revenues related to the costs of services in – progress.
4. revenues from the production of tangible and intangible assets, which are not included in indicator I.
5. revenues from subsidies.
6. the income obtained from compensations, from insurance/reinsurance companies, for damages caused to goods of the nature of stocks or own tangible assets.
7. revenues representing excise duties that were simultaneously reflected in the expense accounts.

I — the value of fixed assets under construction caused by the acquisition/production of assets, recorded in the accounting records starting from January 1, 2024, respectively starting from the first day of the modified fiscal year that starts in 2024.
A — accounting depreciation at the level of historical cost related to assets purchased/produced starting from January 1, 2024/the first day of the modified fiscal year that begins in 2024. This indicator does not include the accounting depreciation of assets included in the value of indicator I.

For the taxpayers who opted/are opting for the annual system with advance payments – the minimum quarterly turnover tax is compared with the advance payment related to 1st, the 2nd, and 3rd quarters (cumulatively), and the final computation is done at the deadline for submitting the annual declaration (D101).
For the taxpayers who pay profit tax in the annual system, without making advance payments, the minimum tax is determined only once, at the annual declaration and payment deadline.

The law also includes special provisions for the tax group, establishing that each member calculates the IMCA and communicates it to the responsible entity’s legal person. The next step is to compare the aggregated minimum tax of the members with the profit tax due at the group level. If the tax result of the group is lost, the group tax is due at the level of the aggregate value of the IMCA.

Exceptions
⮚  The taxpayer who carries out sponsorships and/or patronage will deduct the related amounts from the minimum tax due at the level of the minimum value of the following: the value calculated by applying the percentage of 0.75% of the turnover, the value representing 20% of the profit tax and respectively the value of the sponsorship.
⮚  This tax does not apply to credit institutions, Romanian legal entities, and branches in Romania of credit institutions — foreign legal entities, as well as to legal entities carrying out activities in the oil and natural gas sectors, which will be subject to other additional taxes, as presented below.