The change that the VAT law undergoes has to do with VAT exemptions. Concretely it is the law no. 125 of 2012 which defines some new supplies which are free from VAT including the import and the local supply of goods made of iron or steel, detailed in chapters 7213 and 7214; import of machineries and equipments designed for investments contracts equal or higher than ALL50 million ($477,000) as well as import of machineries by individuals who pay the local tax on small business and need these machineries for their production activity.
Other categories of machinery/equipments, which do not enjoy VAT exemption, are classified under the scheme that defers the VAT payment for a 12-month period from the moment of their importation; of course some rules need to be followed in this case as well.
As far as the law no. 122 on income tax is concerned, the law affects the self-employed individuals whose turnover is under ALL2 million. From now on, the 10% of the annual turnover generated from their business activity is classified as gross income for the sake of the annual tax declaration. Part of the change includes the losses of a taxpayer who can not carry them forward unless the direct or indirect ownership of the share capital or voting rights of the taxpayer changes by more than 50%.
Amendments to the law no. 124 of 2012 on tax procedure specify that the VAT representative will be registered with the Regional Tax Directorate and not with the National Registration Centre (NRC). Also, when a company intends to be dissolved without liquidation, it is a requirement that the tax authority is informed of the deregistration request by the NRC or the court.
The new changes make the penalties fierce when:
- Newly employed are not declared on time by the taxpayers registered for VAT and profit tax. In this case, the fine is ALL500,000.
- Non-declaration of new employees by other taxpayers is fined up to ALL250,000.
Finally, the Excise Law (no. 61 of 2012) changes now provides a lower excise tax for roasted coffee from ALL140 per kg to ALL60 per kg while unroasted coffee is free from excise tax.
All the above-mentioned amendments are already part of the Official Gazette no. 177 and entered into force on January 24 2013.