To declare or not to declare? The dilemma of the month
More and more natural persons have declared in the past two years their income from abroad, consisting of interests, dividends or stock exchange earnings. The official statistics show a seven fold increase of the amounts declared in 2014, compared to the year before. Still, many hesitate, evaluating the advantages and disadvantages of this decision.
However, income from off-shore companies or other investments made abroad will be more and more difficult to hide from fiscal authorities. The global trend is towards intensifying fiscal data exchange between countries, indicating that sooner or later, Romanian authorities will have information on income from abroad.
In the view of Contexpert, not declaring the income is a ticking time bomb. Our recommendation is to minimize all fiscal risks in due time, our specialists having the expertise in order to offer you specialized consultancy.
The deadline for declaring the income from within or outside Romania is the 25th of May.
What types of income need to be declared?
Income from Romania – Form 200
Form 200 must be filled in by all natural persons who obtained, either individually or through some form of association, money or income in the form of goods from:
- Commercial activities
- Liberal professions
- Copyright
- Giving up rights of usage for goods (rents), as an independent activity (more than 5 contracts)
- Giving up rights of usage for goods (rents)
- Agricultural activities which are not taxed on income quotas
- Currency futures exchange, based on contracts
- Transfer of securities, others than shares and stocks in the case of closed companies (of whose shares are not publicly transfered)
- Forestry
- Activities related to fishing
The persons that have income from one or more of these sources are not bound to fill in the declaration, if:
- They opted for having their incomes determined based on income quota. Still, keep in mind that if you chose income quotas, but have filled in the declaration for estimated income/income quota in November or December 2014, you also have to fill in Form 200.
- They opted for final taxation, meaning that the income payer withheld the whole taxes on income and social contributions for incomes from copyrights, civil contracts/conventions, agent contracts, accounting and technical expertise, judicial or extrajudicial.
- They had incomes from rents established in lei, but they didn’t opt for expense deduction based on payments and cash-ins or, during 2014, they didn’t have more than 5 rooms rented for touristic purpose. But keep in mind that, in this case too, if they filled in the estimated income declaration in November or December 2014, they must fill in also Form 200.
- They have income from lease.
Incomes from abroad – Form 201
Form 201 must be filled in by natural persons, either Romanian, or with their domicile in Romania and nonresident natural persons who meet at least one of the residency criteria:
- The center of vital interests of the person is in Romania.
- They have to pay income tax on income from all sources, both from Romania and abroad, starting the 1st of January of the next year they become residents in Romania.
- They are present in Romania for one or several periods which total 183 days, over any 12 consecutive months and these periods end in the calendar year.
Sources of income that needs to be declared
- Liberal professions
- Commercial activities
- Copyright
- Giving up usage rights
- Agricultural activities
- Dividends
- Interests
- Awards
- Gambling
- Transfer of immovable property from personal patrimony
- Transfer of securities (earnings)
- Currency futures exchange, based on contracts and other similar operations (earnings)
- Other investment
- Pensions
The incomes have to be declared for each country where the income is earned and for every type of income.
