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New Deductibility Limitations

by Vlad Cuc

The The Government Urgent Ordinance no. 34/2009 has established new regulations in regards to deductibility of in the accounting of Romanian companies. Therefore expenses related to the functioning, maintenance and repair – excluding those related to fuel – of automobiles used by the persons in management and administration positions with the respective legal entity shall be deducted in a limited manner to 1 automobile per each person bearing such attributions.

Also, the Ordinance stipulates that expenses (incurred from May 1st 2009 to December 31st 2010) related to the purchase of fuel for vehicles exclusively destined for road transportation of persons with a maximum weight of 3.500 kg and with no more than 9 passenger seats (including the driver’s seat) shall not be deducted with a series of exceptions.

Limitations to VAT deductibility
Government Urgent Ordinance no. 34/2009 also stipulates that VAT for the purchase of vehicles exclusively destined for road transportation of persons with a maximum weight of 3.500 kg and with no more than 9 passenger seats (including the driver’s seat) shall not be deducted with exceptions that include and are not limited to: interventions, repair, security and vehicles used for paid transportation of persons, taxis etc.

Acquisition (purchase) of vehicles means the purchase of a vehicle from Romania as well as the import and inter-community acquisition of a vehicle.
Provisions referring to special VAT deductibility shall not be applied for advance payments from before May 1st 2009 for total or partial value of road vehicles if their delivery is done after May 1st 2009. The provisions regarding vehicle acquisition shall apply until December 31st 2010 (including this date).