Taxes for the company building’s drop! Especially if they have residences.
The companies will be advantaged by the new buildings tax system, which will be applied from 2016 onwards. Local councils has started to prepare the decision reports regarding the tax for the next year and a part of them were approved.
According to the draft decisions consulted by Contexpert, the big cities tend to choose the maximum tax rate, as set by the new Fiscal Code for the company building’s. Even if the new Fiscal Code established for the residential buildings a tax of 0.08% and 0.2%, compared to 1.5% in present, the decrease is significant.
In the town headquarter, for example, the companies will have a tax rate of 1.3%, instead of 1.5% for non-residential buildings, with economic purpose and of 0.2% instead of 1.5% for the residential buildings.
On the other hand, for the individuals, the local councils tend to be more indulgent and impose a lower rate for the non-residencial buildings compared to the residencial ones.
Where does the change comes?
The new Fiscal Code, which will be applied from 1 January 2016 onwards, provides tax rates depending on the destination, rather than the owner, so will be:
- between 0.08 % – 0,02% for residential buildings
- between 0,02- 1,3% for non-residential buildings
What is surprising is that the local councils continue to establish the tax rate in different ways for the two category, according with the tax low limits, althought the law maker intentions was to not discriminate nobody according with the owner title.
We offer you some examples of rates that will be applied from 2016 onwards, according to the tax low of the local councils:
Individuals
- Residential buildings 0,01%
- Non-residential buildings 0,2 %
Legal entities
- Residential buildings 0,2%
- Non-residential buildings 0.2%
Galaţi
Individuals entities
- Residential buildings 0,2 %
- Non-residential buildings 0,2%
Legal entities
- Residential buildings 0,2%
- Non-residential buldings 1,3%
Braşov
Individuals entities
- Residential buildings 0.2%
- Non-residential buildins 1.3%
Legal entities
- Residential buildings 0,2%
- Non-residential buildings 1,3%
Iaşi
Individuals entities
- Residential Buildings 0,1%
- Non-residential buildings 1,3%
Legal entities
- Residential bildings
- Non-residential buildings 1,3%
Sibiu
Individuals entities
- Residential buildings 0,1%
- Non-residential buildings 0,1%
Legal entities
- Residential buildings 0,2%
- Non-residential buildings 1,3%
Timişoara
Individuals entities
- Residential buildings 0,1%
- Non-residential buildings 1,3%
Legal entities
- Residential buildings 0,2%
- Non-residential buldings 1%
Which is the impact?
Overall, beginning from the changes of the New Fiscal Code, the impact will be positive for the companies, and negative for the individuals which have non-residential buildings.
- All the companies which own residential buildings will fell positively the decrease of the tax rate.
- All the companies that own non-residential buildings in town’s area, where local councils have opted for the maximum rate of 1.5% will experience a reduction by lowering the maximum limit at 1.3%
- Individuals entities which own residential buildings will be affected by the New Fiscal Code only if the local councils will decide a top level above the present level, (have the possibility, according to the new code, to double the rate applicable ago). However, from our observations, draft decisions in these cases maintain current quotations.
- The individuals who has non-residential buildings, will be, certainly, negative affected. The rate will be at least two times higher than now, from 0.1% to 0.2%. As you noted, some councils choose even the rates of 1% or 1.3%. We recommend you to be careful when classify the building into residencial and non-residential. If the building is used in many purposes, than it is considered mixed. In this case, if there is no economical activity at the fiscal headquarter or you do not deduct the expenses for the headquarter, it will be considered a residencial building. According to this classification, you will apply the residencial tax rate. Therefore, the expenses remain the same.
Terms
Until 7th of november, according to the law, all the local councils should approve the decisions regarding the tax rate of the building for the next year.
Individuals entities who own non-residential buildings must submit, until 29 february a statement at the local tax direction they belong.
What provides the New Fiscal Code? In detail.
The company’s buildings
Currently, the tax rate is between 0.25% and 1.50%. Most local councils have opted for maximum or near maximum rates (Bucharest 1.5%, Brasov 1.5%, Cluj 1%, Timisoara 0.9%, Craiova 1.5%, Iaşi: 0 95% Sibiu: 1.5%).
From 2016 onwards, the tax rate will be:
- For residential buildings between 0,08 -0,02%
- For nonresidential buildings between 0.2 – 1,3%
The taxable value for the buildings will be the value beginning with 31 December of the preceding year that for which the tax will be due and can be:
- the last taxable value recorded in the fiscal body
- For the buildings constructed in the last fiscal year, will be the final value of the construction.
- the value of the buildings resulted from the act of transferring ownership of the buildings acquired during the prior fiscal year.
- The amount booked in the financial statements and notified to the concessionaire building owner, tenant, owner of the administration or use as apropiate.
- To remember! The taxable value must be updated every three years based on an evaluation report. Otherwise, the tax rate will be 5%. Currently, if the evaluation has not occurred in the last 3 years, the rate is between 10% and 20%, and if it has not occurred in the last 5 years, the rate wil be between 30% and 40%. Therefore, in this case, it will be a significant relaxation.
The individuals buildings
Now, the tax is calculated by applying the tax rate of 0.1% at the taxable value of the building regardless of its destination.
From 2016 onwards, the tax rate will be:
- for the residential buildings, between 0.08% – 0.2% on the taxable value of the building
- for non-residential buildings, between 0,2 -1,3 % on the taxable value:
- resulted from an evaluation report prepared by an authorized assessor in the past 5 years preceding reference
- of the construction works, in case of the new buildings constructed in the past 5 years
- Of the buildings resulted from the act of transferring the ownership of the buildings acquired in the last 5 years.
Remember: If the tax can not be calculated at one of these three values, the rate will be 2% applied at the taxable value calculated as residential buildings
Buildings with mixed purpose
The income tax will be calculated by adding the tax for the area classified as residential buildings and the tax calculated for the area used as non-residential building.
If the two types of surfaces can’t be distinguished, the tax will be due as for the buildings:
- residential, if it is registered a fiscal domicile and no activity is going there
- Nonresidential if there is any economical activity where the fiscal domicile is, and if the utility costs are invoiced to the person who register economic activity in that place
