Romanian SMEs Min Drafts Holdings Legislation

The draft, subject to public debate, establishes the legal and fiscal framework of the holding, as well as the general framework for the relations between holding, its branches and the group.

„By this law, we hope to bring back to the country the Romanian capital that went offshore. Moreover, there are currently 100 groups of companies in the country that represent potential Romanian holdings,” SMEs Ministry Constantin Nita told a news conference Wednesday.

The bill, which was presented Wednesday by the minister, also establishes several fiscal stipulations, so that the group of companies will be considered a sole economic entity with integrated activity.

Thus, the profit tax will be applied on the consolidated financial result, by summing up the individual financial results of the member companies and not on the financial results of each company.

Moreover, the transactions between the members of the same group of companies are not subject to value added tax, while the VAT to be recovered by a company in the group can be compensated with the VAT to be paid by another company in the group.