Experts think new tax code will boost Romanian business environment

Deloitte's annual Tax&Legal conference, entitled “Rewriting tax law: turning a challenge into a business opportunity” took place on October 21st at Bucharest's Marriott Grand Hotel.

The much needed dialogue on changing international laws and the necessity for Romania to keep up with these changes as well as the methods used in order to do this have long been leitmotifs for legal practitioners in the country.

And, when it comes to tax law, the interest of both tax payers and authorities is piqued. 

Juraj Barus, CFO of IBM Romania, emphasized in his presentation that the country has, for the past two years, been the leading nation in terms of growth in Central and Eastern Europe and that the Romanian Leu has been one of the most stable currencies of the region.

The ability of the state's market to promote fast return, and, its high growth potential were also stressed.

During the event, Govnet took the time to ask two of Deloitte's partners whether they believe that the new tax code might help the Romanian business environment. 

“The lowering of the VAT rate leaves more room for spending. By lowering the prices, people can buy more things and so consumption can increase” Deloitte partner Pieter Wessel told us.

“All the tax reductions represent a reduction in costs for companies. The business environment is actually worried about any changes that might be added to the current ones. This is their principal worry. But as long as the modifications are sustainable they will be beneficial to the business environment in many ways” Deloitte partner Dan Badin observed.

“One of the clarifications the new tax code will add which will prove very helpful is the principle 'in dubio contra fiscum'. This basically means that if a regulation is unclear then the law will be applied in favor of the tax payer[...]. There are certain conditions that must be met before this principle is applied and this might make the process a tad difficult, however, the fact that this rule exists is a positive development” Badin added.

With regard to the new Procedural Tax Code, Alexandru Reff, partner of Reff&Associates noted that this law is aiming to bring balance between the relevant authorities and the tax payer, yet besides the progressive principles and supplemental guarantees it adds for debtors, budgetary tax collection regimes will become harsher. He concluded that this will not be a tax code of fiscal relaxation.

A novelty in terms of legal news services was launched by Deloitte Romania during the conference. The application Tax@Hand was introduced. It brings its customers tax information, news, opinions, specialized articles and other resources developed by Deloitte tax consultants from different jurisdictions. 

The conference also included six interactive workshops, during which Deloitte consultants and Reff&Associates lawyers discussed specific issues together with representatives of other companies.

Overall the event represented a useful dialogue, part of many which must be taken into consideration every time changes to the law are made. For what better way to make sure that rules are effective than engaging in conversation with the very people they affect ?

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