Legal news

Regulation of commercial leases provides that property tax, as well as fees and charges associated with the use of the premises (or the building in which such premises are located) or with the service used by the merchant, can be levied from him. That is the case, for example, of the tax on garbage collection. However, it is still necessary that the lease agreement expressly provides for it!

Thus, if, according to the commercial lease agreement, the burden of “deductions, taxes and expenses of all kinds related to the building” is on the merchant, however, this agreement does not specifically mention the tax on garbage collection, the merchant does not have to pay it.

Public authorities encourage homeowners to renovate their homes.

ENERGY TRANSITION TAX CREDIT

Expiring on 31 December 2018, the energy transition tax credit (ETTC) is finally extended by one year, i.e. until the end of 2019. This credit allows taxpayers to receive credit benefits on income tax on the costs of improving the environmental quality of their main place of residence if it was built more than 2 years ago.

In addition to this, the list of expenses that fall under the ETTC has been increased. Thus, the benefit of the tax credit is restored for the acquisition of thermal insulation materials for double glazing, replacing single glazing. Expenses for the installation of heating equipment using renewable energies, as well as the expenses paid for the removal of an oil tank, also became subject of the ETTC.

Moreover, it should be noted that the eco-loan at zero rate, that allows to finance work on the energy renovation of housing, has been extended until December 31, 2021. There is also a simplification of this mechanism: removal of the condition of work package, alignment of the condition of age of housing on that applicable to ETTC.

CENTRES-VILLES PLAN

Although the plan expired on December 31, 2018, the tax cut at “Censi-Bouvard” was extended for three years, that is, until the end of 2021.

It should be noted that this disposition allows some renters of furnished housing for non-professional purposes to enjoy the benefits of income tax for 9 years, the rate of which is set at 11% of the cost of housing, maintained at a rate of 300.000 euros per year (regardless of the number of housing) .

RENOVATION OF CITY CENTERS

The “Pinel” disposition on property tax exemption applies to old housing located in municipalities, where the need for the restoration of housing in the city center is particularly marked. In particular, taxpayers who purchase real estate from January 1, 2019 to December 31, 2021, restored or falling under restoration, can benefit from a tax reduction. It should be noted that these restoration work should be billed by companies, the amount of such bills should represent at least 25% of the total cost of the real estate transaction. However, the contours of the disposition still remain to be defined by decree and by-law.

It should be noted that the tax reduction is calculated on the cost price of housing (within certain limits) and at a rate that depends on the duration of the rental commitment chosen by the investor (12% for 6 years, 18% for 9 years or 21% for 12 years).

Real estate property

Contact us quickly to create your company in Romania!

The SRL (limited liability company), equivalent to the SARL in France, is the form of organization of a company most used in ROMANIA.

It has limited liability before the law and its owners.

It is also one of the safest arrangements for associates.

LLC “SRL” is also the cheapest way to set up a business with a share capital of 200 RON (about 45 EUR).

The creation of this type of company can be carried out within 3 working days following the filing of the file with the commercial register in the area where the registered office of the company is located.

Legislation of LLC “SRL” in ROMANIA

The law governing the acts and steps necessary for the establishment of the LLC “SRL” is the Companies Law no. 31/1990 – with amendments (Law no. 163/2018).

Furthermore, associations within an LLC “SRL” are only responsible for the registered assets of the company.

The number of partners is limited to 50.

However, a natural or legal person can be the sole shareholder.

Steps to follow for the creation of an LLC “SRL” in ROMANIA

In order to be able to create a LLC “SRL” in ROMANIA, the following steps must be taken:

• Establish the corporate purpose of the company;
• The main and secondary activities must be established in accordance with the classification of the “CAEN” code;
• You must reserve the name of the future company (once the verification on the Trade Register site has been made);
• Specify the legal form of the company, in this case a SARL “SRL”;
• You must establish the registered office of the company registered with the “ANAF” (provide proof of address such as a deed of ownership or lease);
• Draft the articles of association and deposit the share capital (minimum 200 RON or approximately 45 EUR) with a bank;
• Submit the entire file to the commercial register for the purposes of registration of the company.

The methods of taxation of an LLC “SRL” in ROMANIA

There are two tax options:

The LLC “SRL” will have to pay a 3% tax on turnover

For example, if a product or service is sold at 100 RON (approximately 22 EUR) + VAT (for companies subject to VAT) or at 100 RON final price (for companies not subject to VAT ), a tax of 3 RON (about 0.67 cents).

The payment of taxes is quarterly in the month following a calendar quarter.

The LLC “SRL” will have to pay a tax of 16% on the profit

The LLC “SRL” will have to pay a tax of 16% on the profit, i.e. the difference between income and expenses.

For example, if we have an income of 100 RON and expenses incurred to obtain this income, amounting to 90 RON, the profit is 10 RON and a quarterly tax of 1.6 RON will have to be paid.

In either case, after paying this tax to the state, you must also pay 16% dividend tax.

In order to decide which type of tax is right for your business, you need to calculate in advance the profit margins that you will be working on.

However, if you exceed a turnover of €65,000, you will automatically be included in the profit tax payment category.

The cost for the creation of a ROMANIAN LLC “SRL”

The cost for the creation can vary between 400 RON and 1000 RON or between 90 EUR and 225 EUR.

The cost of the domiciliation of a SARL

The cost of the domiciliation of a SARL varies between 150 and 300 EUR per year.

Contact us quickly to create your company in Romania!

The tranche of scale are overvalued by 1.6%

INCOME TAX SCHEDULE

The limits of the brackets of the scale of the income tax are revaluated by 1.6%. This rate corresponds to the projected price increase in 2018 excluding tobacco products. The scale applicable to income tax in 2018 is as follows:

It should be noted that the tax applied to current income (salary, property income ..) collected in 2018 will be compensated by the application of “modernization tax credit recovery”. Thus, with the goal of avoiding double taxation, in 2019 a tax credit will be applied after deduction of withholding tax.

LIMITATION OF THE EFFECTS OF FAMILY QUOTIENT

The family quotient is a system that corrects the progressivity of the income tax schedule for taxpayers entitled to more than one share, including taxpayers with one or more children.

However, the tax benefit resulting from the application of the family rate is limited for each half or quarter of the share, which is added to the two shares of taxpayers who are married or are in PACS and are jointly taxed, or to the share of single, divorced or married taxpayer taxed separately.

The general ceiling on the effects of the family quotient is raised, for the taxation of the 2018 income, from 1.527 EUR to 1.551 EUR for each half-share granted for family expenses, i.e. 775,50 EUR (against 763,50 EUR previously) by an additional quarter of a share.

In addition, specific marginal rates are applied to certain categories of taxpayers. As such, it should be noted that single, divorced or separated persons living alone and having at least one dependent child receive an entire share instead of a half-share. The tax benefit resulting from this share can not exceed 3.660 EUR for the taxation of 2018 incomes (compared to 3.602 EUR for the 2017 income).

INTEREST DISCOUNT

When the amount of the gross income tax resulting from the progressive scale is lower than a certain limit, an interest discount is applied to the amount of this tax, after application, if it is a case, of the of the family quotient.

For taxes on income in 2018, the limit of this discount has been increased to 1.196 EUR (compared to 1.177 EUR last year) for single, divorced or separated and to 1.970 EUR (against 1.939 EUR) for married persons or persons in the PACS subject to common taxation.

Remember that the amount of the discount is equal to the difference between its application limit and three quarters of the amount of the taxpayer’s gross tax contribution.

1.3. 20190215 Income tax

SOME MEASURES TO PROMOTE BUSINESS TRANSMISSION

« DUTREIL » PACT

In principle, the transfer, by donation or inheritance, of a company is generating transfer duty. The cost of this transmission may, however, be reduced if the transferred titles are subject to a “Dutreil” Pact. This plan allows to exempt, under certain conditions, transmissions up to 75% of their value.

For this, the titles in question should been the subject of a collective commitment of conservation of at least 2 years, in progress on the day of transmission, taken by the deceased or the donor, with one or more other partners. In addition, during the transmission, each beneficiary must in particular commit to keep the securities transmitted for 4 years.

In order to facilitate the transfer of business, several easements are made to the “Dutreil” Pact as of January 1, 2019. In particular, the “collective” commitment may be taken by a single person. In other words, the Pact is extended to transmissions of single-member companies. In addition, the obligations of the beneficiaries of transferred titels to provide an annual report on the fulfillment of the collective obligation were abolished. Thus, attestations certifying compliance with the conditions of application of the Plan must be produced only at the beginning and at the end of the regime and, where applicable, at the request of the tax authorities, and only by the beneficiaries of the exemption.

SELLER’S LOAN

When transferring a business, the seller may accept deferred or incremental payment of the price. We are talking about “seller’s loan” or “seller’s credit”. In this case, he may request a staggering of the payment of the income tax on the long-term capital gain realized on this transfer. Until now, only small companies (less than 10 employees, balance sheet total or turnover not exceeding 2 million EUR) could benefited this loan.

Now for the transfer made from January 1, 2019 or after this date, such step-by-step taxation, in the case of a seller’s credit, also applies to companies with less than 50 employees and whose total balance or annual turnover does not exceed 10 million euros.

BUYING A COMPANY BY EMPLOYEES

Companies created solely for the purpose of buying out all or part of an companies’ shares by its employees benefit, under certain conditions, from a tax credit.

At the moment, this tax advantage is softened enough. Thus, the condition regarding the participation of the minimum number of redeeming employees was abolished. However, in replacement, the other condition appeared according to which, on the day of the business transmission the purchaser employees must be in the company for at least 18 months.

3.3. 20190215 BUSINESS TRANSMISSION

At the date of 10th July 2018

The status of financial investment adviser (FIA), established by the law of 1st August 2003 is aimed at the reinforcement of protection of investors by better regulation of issues related to its activities. Thus, all FIAs fall under a certain number of duties, conditions and prohibitions controlled by the AMF.

Conditions of implementation of the activities of the financial investment adviser  

Schematically, except the obligation to be a member of the Association of Financial Investments Advisers, every intermediate have to meet the following conditions:

• Condition of habitual residence in France;
• Condition of age and respectability;
• Condition of professional ability;
• Condition of the professional liability insurance.

А. Condition of habitual residence in France

The Statute of the FIA imposes on individuals and legal persons an obligation of habitual residence in France (art. L. 541-2 of the Monetary and Financial Code).

В. Condition of age and respectability

To carry out this activity, the financial investment adviser, whether an individual or a person having the power to manage or administer a legal person, have to fulfil the following conditions:

• Conditions of the age: to be an adult;
• Conditions of the respectability according to the article L. 541-7: not to be subject to disabilities of the article L.500-1 of the Monetary and Financial Code and/or not be subject to sanctions of AMF on the prohibition of activities on a temporary or permanent basis.

С. Condition of professional ability:

Conditions of professional ability necessary for obtaining the status of the financial investment adviser are established by the General regulation of AMF, especially by its article 325-1. In order to exercise this activity, the person has to:

• • Whether dispose the national diploma leading to three years of higher legal, economic or management studies, or a diploma or a certificate of a similar degree suitable for carrying out the operations, mentioned in the article L. 541-1 of the Monetary and Financial Code;

• Or receive the professional training of a minimum duration of 150 hours, acquired from an investment services provider, an association of financial investment advisers or a training organization, adapted:

• to implementation of operations with financial instruments (art. L. 211-1 of the Monetary and Financial Code);
• to provision of investment services (art. L. 321-1 of the Monetary and Financial Code);
• to the realisation of operations with various goods (art. L. 550-1 of the Monetary and Financial Code).

• Or to have a professional experience of at least 2 years. This experience should be acquired during the five years preceding his entry into office concerning the functions connected with the implementation of the operations described above. The professional experience should be acquired from an investment services provider, a financial investment advisor, an investment services agent or an insurance intermediary.

Concerning the diploma, the instruction of the AMF n°2013-07 from the 24th April 2013 stipulated that it should be registered in the national directory of professional certificates, in one of the nomenclatures of educational specialties mentioned below:

– 122 (Economy),

– 128 (Law and political sciences),

– 313 (Finances, banks, insurance agencies and real estate agencies),

– 314 (Accounting, management).

As well as the diplomas or certificates of the same level including foreign diplomas recognized by the ENIC-NARIC Center on the basis of a certificate of comparability.

In the context of the provisions relating to the obligation to update members’ knowledge at the expense of professional associations, the training for professional ability of the financial investment adviser covers such topics as:

– general knowledge about consultations on financial investments;

– general knowledge on the marketing methods of financial instruments;

– rules of good conduct of the financial investment adviser;

– rules of organization of the financial investment adviser.

Moreover, the financial investment adviser, whether an individual or a person having the power to manage or administer a legal person engaged in the activity of a financial investment advisers,

falls under the conditions of professional competence and business reputation, according to the article L. 541-2 of the Monetary and Financial Code.

1. D) Condition of the professional liability insurance:

According to the article L. 541-3 of the Monetary and Financial Code, in order to exercise the activity, the financial investment adviser has to acquire professional liability insurance covering the financial consequences of his activity. The threshold of this guarantee differs according to whether it is a natural person or a legal person employing at least two employees who exercise this activity.

• For a natural person and a legal person with less than two employees: 150,000 euros per insurance case and 150,000 euros per year of insurance;
• For a legal person with two and more employees: 300.000 euros per insurance case and 600,000 euros per year of insurance;

These guarantees take effect on March 1st for a period of twelve months; the contract is tacitly renewed on January 1st of each year.

According to the article D.541-9, the financial investment advisers do not fall under the amounts indicated above if they realize a consulting activity concerning exclusively the services related to investment services in accordance with the article L.321-2.

From the article L. 541-2 of the Monetary and Financial Code follows that only individuals can manage a legal person that realize an activity of the financial investment adviser. So, according the article 1 of the Decisions of 1st March 2012 about a single register, only individuals can figure at the register of ORIAS.

The Recommendation of AMF N° 2006-23 in the paragraph 2.1 b) has introduced a new rule regarding the incompatibility of the category of financial investment adviser (CIF) with the category of the Agent of Investment Services Providers (Agents Liés de Prestataires de Services d’Investissements ALPSI).

Conditions of implementation of the activities of the financial investment adviser