Law no. 322/2021 published in the Romanian Official Gazette on 30 December 2021 has brought changes to the procedure for claiming tax credit for sponsorship expenses starting with 1 January 2022, as follows:
- Starting with FY22 (or FY22/23 as applicable), taxpayers may claim tax credit for their sponsorship expenses only if the amount of said tax credit, following the deduction of the amounts of the corresponding tax credit carried forward from previous years, is positive.
- The corresponding tax credit which is not used up against payable profit or against payable micro-company tax, as applicable, is to be carried forward no later than 2028 only if it relates to sponsorships performed before 1 January 2022, according to the regulations in force at the date of the sponsorship.
- If the value of the tax credit for sponsorship expenses, less the amounts carried forward from previous years, as the case may be, has not been fully used up, taxpayers may redirect the profit tax, up to the amount thus calculated, for sponsorships, within a maximum of six months from submitting their annual profit tax return.
- The rule above applies mutatis mutandis to taxpayers that are subject to the micro-company tax regime.
- Additional instructions are expected from the President of ANAF to clarify the application of the above rules. More details will follow.
By Carmen Mazilu, Associate, Noerr