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EY : Tax on financial assets, significantly reduced, less dramatic impact on banking system

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The tax on the banks' financial assets has been significantly reduced, having a less dramatic impact on the banking system following Friday's amendment of Ordinance 114, according to Partner and Leader of Tax and Legal practice of EY Romania Alex Milcev.

As a matter of fact, according to Milcev, the most radical changes aim the tax on the financial assets of credit institutions, which was almost completely rethought following the bill amending Ordinance 114 adopted on March 29 by the Government. Thus, according to the new provisions, the tax is due on a half-yearly basis (and not on a quarterly basis, as stipulated in the current OUG), the first payment deadline being 25 August 2019. The tax rate was also reduced to 0.4 percent per year, respectively 0.2 percent per year, depending on the market share of banks, given that according to OUG 114, it could be up to 2 percent per year.

As regards the energy sector, the rate of return of the invested capital for the regulatory period 2019 - 2024 increases from 5.66 percent to 6.9 percent, with implications to be expected with regard to the increase in the distribution tariff and implicitly on the final price for the consumer.

For the household consumers, the price for the final consumer will no longer be defined by the market (demand / offer), but by the National Energy Regulatory Authority (ANRE), the supply of electricity being made under regulated conditions for the period 1 March 2019 - 28 February 2022.

According to the EY representative, in the case of privately managed pension funds, the enforceability of the provision of the minimum share capital, which needs to be set by 31 December 2019, was suspended until 31 May 2019. For the period of suspension of the provision, the minimum necessary share capital amounts to 4 million euro.

"The amendments made come in response to the warnings and requests for consultation from the business environment and the modified provisions result in a less negative impact on the affected areas," the quoted source specifies.  

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