The fiscal policy regarding corporate income tax payers has changed substantially since this year, with important changes being introduced to the recovery of fiscal losses or the deductibility of some expenses. Also, large companies paying profit tax will be able to owe new types of taxes, calculated according to the turnover achieved, and in certain sectors of activity, additional payment taxes have been temporarily introduced, which must be paid in addition to the profit tax already paid to the state.

Among other things, the year 2024 brings, for all companies paying profit tax, a new, much more restrictive approach to tax losses. As of this financial year, they can only be recovered to the extent of 70% in the next five consecutive years. The annual tax losses related to the years preceding the financial year 2024, remaining to be recovered on December 31, 2023, will be recovered from the taxable profits made starting from the year 2024, but only within the limit of 70% of the respective taxable profits, for the period remaining to be recovered from the seven consecutive years following the year of recording those losses.

The legislative changes also concern the adjustments for the depreciation of receivables, from this year they will be deducted only within a percentage of 30% of the value of the adjustments, if the receivables cumulatively meet the conditions provided by the Fiscal Code.

There are also news from 2024 in terms of expenses, in the scope of those with limited deductibility, new types of expenses being introduced, such as the amounts paid by the taxpayer for the placement of employees’ children in the early education units managed by the taxpayers, which will be deductible in the limit of 1,500 lei/month for each child.

The category of expenses with limited deductibility also includes, from 2024, those related to the operation, maintenance and repairs of a registered office purchased by the taxpayer in residential buildings or in individual residential buildings, in residential complexes, which is not used exclusively for the purpose of economic activity, these being deductible only in proportion to 50% of their value. It is also worth mentioning that, if the registered office is used for personal purposes by the shareholders/associates, the respective expenses are not deductible when calculating the tax result.

Also, in the sphere of expenses, you should also know that private scholarships granted by companies are no longer deducted from the profit tax, but expenses of this kind are included in the category of social expenses. Practically, the deduction will be very limited: companies will be able to grant private scholarships up to a maximum of 1,500 lei / person, these will be added to the rest of the social expenses incurred, and the resulting amount will be able to be deducted within the limit of 5% of the salary expenses.

Another novelty that corporate tax payers must take into account relates to the costs of acquiring fiscal electronic cash registers: from 2024, they will no longer be deducted from corporate tax, but they will be able to be the subject of the fiscal facility representing the exemption from tax on reinvested profit.

Minimum taxes and additional taxes

Apart from the regulated tax treatment changes, the authorities have also established a new tax framework for large corporate tax payers. More precisely, from 2024, companies with a turnover of more than 50 million euros are obliged to pay a turnover tax (IMCA) of 1%, if in the calculation year they determine a profit tax lower than the IMCA. The new tax will be due even in situations where companies are in a tax loss position or are making a profit but are in tax loss recovery periods.

Also, from this year there are also a series of specific taxes on certain fields of activity. Thus, banks will pay a tax on turnover, in addition to that on profit: the rate is 2% in the period 2024-2025 and 1%, starting from 2026.

And for companies active in the oil and natural gas sectors with a turnover of over 50 million euros, a temporary tax (ICAS) has been regulated, at a rate of 0.5%, which will be due in the period 2024-2025, following that after this date he will be replaced by IMCA. The Ministry of Finance established at the end of last year the list of companies in the Oil & Gas sector that will have to pay this additional tax of 0.5%: it will be mandatory for all companies with CAEN codes 0610, 0620, 1920, 3522, 3523, 4671, 4730 or 4950, whether primary or secondary.

As an additional note, all new taxes will also affect the profitability of companies that are part of local and/or multinational groups, causing business restructuring as well as potential risk situations for transfer pricing.

Article published in Business-Mark.ro