OTHER CHANGES IN THE TAX LAWS

An amendment to the Law on Local Taxes and Fees effective from 2005 stipulates that donations of property between ascendant and descendent relatives and between spouses are exempt from donation tax. Thus, donations between parents, children, grandchildren, etc. and between spouses can be done without any tax be levied. According to the regulations before the change these donations are levied with a donation tax at the rate of 0.5% on the value of the donated property.

Another amendment to the law sets forth that the remaining spouse and the ascendant and descendent inheritors are exempt from tax on inheritance.
The amendments and supplements to the Law on Taxation of the Income of Physical Persons do not change the current regime of tax benefits for physical persons – donors to NGOs, which will be acting in 2005 too. Physical persons regardless of the sources of their incomes – labor contracts and equal to them, rents, income of self-employed persons will be able to deduct up to 10% from their taxable income for donations to non-commercial legal entities with charitable, social, environmental, healthcare, science research, educational, culture and sports purposes amongst which are NGOs for mutual benefit and for donation to NGOs for public benefit registered in the Central registry. A new moment in the law is the regulation of the precise mechanism for using the exemption. Art. 20, par. 7 provides for that these benefits will be used when a person submits its tax declaration, unless the payment of the sums has been made through the employer.