The Romanian Ministry of Finance has published an urgent government ordinance (OUG) on Friday to modify and complement Title X of Law no. 227/2015 concerning the Fiscal Code. This regulation establishes the mechanism for calculating and declaring the construction tax, set at 1% of the net value of special constructions in the private sector and 0.5% for those owned by the state or local authorities.
The net value of constructions is defined as the amount reflected in the debit balance of the corresponding construction accounts minus the total recorded depreciation value. Finance Minister Tánczos Barna stated that the newly published ordinance aims to ensure tax revenues at least at the initially estimated level of 1 billion lei by 2025. This regulation considers the need for effective revenue collection alongside feedback received from economic sectors. Private companies had requested that taxation be based not on the gross value of constructions but rather on their net value. As a response to this request, the government decided to impose a 1% tax on the net value of special constructions for the private sector.
Additionally, based on proposals from public infrastructure managers and analyses conducted, a tax rate of 0.5% was determined for special constructions owned by the state or local authorities that are concessioned or provided for administration. In these cases, the tax is applied to the historical value of the constructions.
The ordinance specifies that constructions located in Romania’s territorial sea, as defined by Law no. 17/1990, are exempt from this tax. The construction tax is computed by applying a rate of 1% to the value of constructions recorded in the taxpayers’ assets as of December 31 of the previous year, subtracting the value of buildings liable for building tax under Title IX of the Fiscal Code. This provision includes the value of buildings in industrial, scientific, and technological parks which are not exempt from building tax.
For constructions under the public/private domain of the state or local administrative units, the tax is owed by the taxpayers who manage, have under concession, or use the respective constructions for free, or for rent.
Furthermore, the normative act includes measures aimed at clarifying some provisions concerning the construction tax. These modifications are intended to:
1. Provide clarifications on how to establish the taxable base for investments made by taxpayers in buildings used under management agreements, concession agreements, free use, rental, management location, and joint ventures.
2. Set rules for calculating, declaring, and paying the tax for those with modified fiscal years, those who cease to exist, or newly established taxpayers during the year.
3. Define the scope of the tax to apply only to constructions situated on Romanian territory.
Overall, the new regulation is designed to improve compliance and ensure a stable tax revenue framework for the construction sector in Romania. The government is keen on making tax collection more efficient while considering the realities faced by companies operating in this sector. This reform reflects an ongoing effort to gather public input and adjust fiscal policies accordingly to better serve both the government’s revenue objectives and the economic landscape of the country.
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