Romanian Govt OKs Applying Reverse Taxation On Cereal For Two Years

The Romanian Government on Tuesday approved a draft emergency ordinance whereby the country will apply reverse taxation on cereal and plants with industrial use for about two years staring June 1, 2011, after it received approval from the European Union.

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Prime Minister Emil Boc said the measure represents one of the most efficient ways to counter tax evasion.

According to the Finance minister, budget revenues from the tax will amount to 240 million lei (about EUR58 million) in 2011 and RON410 million in 2012.

Last year, Romania requested derogation from EU regulations to apply reverse taxation on intra-community trade with cereals, fruit, vegetables, meat, sugar and bread. The European Commission rejected the request.

In December 2010, the country told the EC it revised the list of products for which it wants to apply reverse taxation. Romania's new request concerned only cereal and plants for industrial use (corn, wheat, barley, rye, two-row barley, soy, rapeseed, sunflower and sugar beet).

In January 2011, the European Commission's Directorate-General for Taxation and the Customs Union endorsed Romania's new request, which was approved by the Council of the European Union in May.

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