Deductible interest rate down from 7 to 6%

The deductible level of the annual interest rate for the 2006 fiscal year for loans in foreign currency contracted from entities other than banks or non-bank financial companies will drop from 7 to 6%, according to a decision approved by the Government in its meeting yesterday. The decision complements the methodological norms to apply Law 571/2003 on the Fiscal Code. This level of the interest rate applies when establishing the taxable profit that companies are to pay in 2006. The level of the interest rate was established by taking into the consideration the evolution of the interest rates for credits in euros and dollars in 2005, which were released by the National Bank of Romania. According to the Fiscal Code, the level of the interest rates for loans in foreign currency are updated by government decision.

Last year, the deductible level of the annual interest rate for loans in foreign currency stood at 7%. This level does not apply to credits obtained from Romanian or foreign banks, branches of foreign banks, credit unions, leasing companies for leasing operations, companies offering mortgage credit and legal entities, which grant credits under the law. ZF