The Government has decided that the minimum turnover tax (IMCA) will no longer be eliminated, as had been announced in the initial draft of the project. Instead of being replaced by the new limitation on the deductibility of expenses received from affiliates, the two fiscal mechanisms will operate simultaneously, but for different categories of companies (at least according to the latest versions of the draft law).

Limited deductibility of expenses from affiliates

In addition to IMCA, the legal act also introduces a new tax on affiliates, applicable to companies with a turnover of less than 50 million euros and which incur expenses with affiliated entities that are not established and do not have their effective place of management in Romania. The relevant expenses are those related to management services, consultancy, or intellectual property rights.

The general rule is that these expenses are deductible only up to 1% of the total accounting expenses reported for the current fiscal year. If their share exceeds this threshold, the portion exceeding it is no longer fiscally recognized. For example, if a company has total expenses of 200 million lei and pays 5 million lei to a foreign affiliated company for consultancy services, only 2 million lei (representing 1% of the total) will be recognized as deductible. The difference of 3 million will be considered non-deductible, which means it will increase the taxable profit and, implicitly, the tax due.

The determination of the euro equivalent of turnover is made at the exchange rate in force at the close of the financial year.
However, there are exceptions here as well: expenses for obtaining trademarks, industrial designs, copyrights, or other similar rights are not subject to the new provisions, provided that they are registered in Romania.

By maintaining the minimum turnover tax, the business environment faces increased fiscal pressure. On the one hand, companies must pay attention to how they manage their assets and the conditions for retaining them to avoid recalculating taxes and applying fiscal accessories. On the other hand, multinationals and groups with significant transactions with affiliated entities outside Romania must adjust their internal policies in order not to lose the deductibility of expenses.

In conclusion, the business environment is entering a stage with stricter and more complex tax rules. Entrepreneurs and financial managers must carefully analyze investments and transactions with affiliates to prevent situations in which they could be required to pay additional taxes and accessories. The new measures require more rigorous planning and greater transparency in economic relations, both domestic and international.