Fiscal Package 2020 has had the commitment of the Tax & Customs Committee of AmCham, whose experts have professionally handled all requests coming from members on fiscal issues for which AmCham has lobbied over the years. AmCham has maintained its position on the Economic Affairs Committee in the Parliament on issues of common interest that bring a lasting impact on fiscal developments in the country.

Draft Law “On Income Tax”, as amended

–1– The draft law proposes adding an incentive for sport entities. The AmCham members’ proposal is that this incentive be given to all taxpayers and not only to legal entities that generate more than 100 million ALL in annual profit and formulate a new article to avoid the problems on implementation.

–2– The draft law proposes extending the period of the loss carry-over from 3 to 5 years for taxpayers who invest in business projects worth more than 1 billion ALL.

First, the extension should not be conditional on the value of the investment but should be allowed for all taxpayers.

Secondly, the following points are unclear on how the 5 years time line will be calculated, including the value of investments in process which needs to be clarified in the law or its implementing guidelines.

–3– The bill proposes a reduction of corporate tax rate from 15 percent to 5 percent for the automotive industry.

1. a) As the automotive industry encompasses a wide range of activities, such as manufacturing (complete product or parts), motor vehicle resale and other activities, we would suggest that the law explicitly defines which of the activities mentioned above it applies to — what integral parts of the automotive industry are to be included in the incentives given to the industry. If, within the law’s definition, companies operating in the automotive sector are only manufacturers, we would suggest that it be clearly specified whether manufacturers of vehicle parts would also be subject to these incentives.

The Draft Law ‘On Tax Procedures’, as amended”

1- The draft law aims to limit the taxpayers’ right to change tax returns by allowing them to take place only once within a 36-month period of submission of the original statement. Also, the individual annual payroll and statement can only be corrected within a very short period of time (one- and three-month periods).

The right of the taxpayer to correct the declarations themselves as well as over a relatively long period of time was welcomed by the taxpayers and was a great relief because it avoided bureaucratic procedures with the tax administration (where the taxpayer had to apply for correction to the administration, and, if the latter was convinced that the claim was just, proceeding with entering the changes in the system). Initially, the allowed period for corrections was intended to be five years (60 months) and then it was reduced to three years (36 months). The proposed change takes us back in time and creates useless obstacles for taxpayers. It also goes against the principle of self-assessment, timely and accurate tax liability declaration and voluntary compliance with tax legislation.

2- Shortening the deadlines for notification of tax audits and fiscal visits.

Changing these deadlines, from 30 days to 10 days and from 10 days to 5 days respectively, increases the risk of failure to timely and accurately prepare the documentation subject to the audit, and creates the inability to make possible corrections of tax liabilities prior to the audit — by allowing the business side (through a questionnaire form made available by the Regional Tax Directorate together with the notice of audit) to pay the relevant taxes and interest before the start of the audit. We’d like to recall that the payment of taxes and interest payments in this case requires the cooperation of the Regional Tax Directorate to receive the taxpayer questionnaire form, to reflect it in the system and to print and make available the relevant payment order taxpayer (so that the taxpayer can pay through the bank). It is virtually impossible for this whole process to take place within the 10-day period from the notification of the audit to the commencement of the audit.

3- Proposed penalties. Article 122 establishes sanctions for failure to register the data of entities issuing invoices under the fiscal system. As the process itself is very unclear and there are many shortcomings, the uncertainties related to its non-implementation must be resolved before the penalties for non-implementation can be determined and applied. We suggest that the implementation of these sanctions be delayed in time, leaving sufficient time for businesses and all stakeholders to accommodate working practices with legal requirements.