More talk on fiscal incentives

The Development and Prognosis Ministry within three weeks will come up with the final form of the direct investments Law, aiming at investments whose value exceeds one million dollars.

Over the next period, the Finance Ministry will discuss the fiscal incentives to be granted according to the law, Development minister Leonard Cazan announced at the end of last week.

Cazan added that the law also included several proposals and suggestions submitted by the associations of Romanian and foreign investors. The draft law was also sent to the Bucharest-based delegations of international financial institutions and the European Commission.

“The budgets for 2001, 2002 and partially 2003 will not be affected by the enforcement of this law, as these investments are due over the next two years and their outcome will be apparent in 2003 or even later,” the Development minister specified.

He explained that the law strictly aims at investments whose value exceeds one million dollars, operated after the law has been enforced.

The draft sent to the Bucharest-based representatives of foreign institutions includes comparative reports on fiscal incentives currently in effect in other Eastern and Central European countries.

The minister says that equipment imports are exempted from customs duties payment in Turkey, Slovenia and Croatia, where the imports of services are also tax exempt.

Certain investments are also exempt from profit tax payment in Hungary and the Czech Republic. Investments in corporate assets benefit from 40% lower taxes in Slovenia.

“The Law we have proposed comprises several facilities, also applied in other countries, but the granting idea has not been considered in Romania so far,” Cazan said.

Foreign investors will benefit from the possibility to transfer the entire profit resulted after having paid the due taxes, as well as the amounts derived from compensations.

The law differentiates between investments, depending on the field where they are applied. Incentives will be enforced for four years in the case of investments in agriculture, food industry, infrastructure, research, health care, education and tourism and two years for investments in other industrial branches and services.

The investments whose value ranges below one million dollars will benefit from the laws regarding the Small and Medium-sized Enterprises (SMEs).