Romania To Apply Updated Calculation Method For Building, Land Taxes In ‘10

“Regardless of how the tax will be updated, either depending on the last three years’ inflation or on the market prices, the new levels will be enforced as of January 1, 2010. Hiking taxes in 2009 is out of the question, as the Fiscal Code doesn’t allow it,” Marinescu said.

He said a hike depending on inflation will boost the tax value of buildings, lands and fix assets, and also fines by 20.49%, compared to the levels set by Government Decision no. 1,514 of 2006.

Local councils may add a maximum 20% to the hike, Marinescu said.

As regards the update of the tax based on the market value, this can only be done after the grid applied by the notaries public is adjusted by taking into account the last price cuts on the market.

“A sum adjusted for buildings and lands could have been applied this year only if the reference prices had been updated last year,” Marinescu said.

The Finance Ministry recently said the properties’ tax value, based on which individuals and companies pay their property taxes on lands and buildings, will be hiked by 24.3% after being kept unchanged in the last years.

The property tax for individuals is computed through applying a tax ratio of 0.1% on the tax value of the building, according to the Fiscal Code.

As regards legal entities, the property taxes are computed by applying a tax ratio, which is set by the local council and may rank between 0.25% and 1.5%, on the property’s tax value.

Local taxes are hiked once every three years depending on the inflationary trend since the last hike, according to the fiscal code.

The new taxes have to be approved by government decision until each year’s April 30.

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