Romanian Govt Discussed Flat Tax Exemptions

Romania’s Government made a list of the activities exempt from the flat tax, including income from agriculture, transfers of real estate, and night clubs and casinos, for which the tax ranges from 2% to 5%, after President Traian Basescu suggested the flat tax should be levied on any type of income.

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The list, drafted by the Finance Ministry and obtained by MEDIAFAX, covers a series of exemptions from the flat tax, such as bars, night clubs, discos, casinos and sporting bets. The document says people employed in such fields, including legal entities earning income through a partnership agreement, and for whom the profit tax amounts to less than 5% of revenue, are required to pay 5% of their revenue as tax.

Agriculture revenue from the sale of products harvested from privately owned or rented land and then distributed to specialized units for collection or industrial processing are taxed by 2% of the products' value.

The tax on income from the transfer of real estate starts from 2%-3%, depending on the building's value and the purchase date, while the transfer of ownership through inheritance is not taxed, as long as it is settled within two years of the owner's death. In case the inheritance procedure is not completed by this deadline, the heirs owe only 1% of the property's value.

The document also mentions a 10% tax on dividends levied on non-resident legal entities.

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