TITLE III - Income tax

CHAPTER I - General provisions

ART. 39 - Taxpayers

    The following persons shall owe the payment of the tax according to the present title and shall be hereinafter called taxpayers:

    a) resident natural persons;

    b) non-resident natural persons who carry on an independent activity through a permanent head office in Romania;

    c) non-resident natural persons who carry on dependent activities in Romania;

    d) non-resident natural persons who obtain the incomes provided in Article 89.

ART. 40 - Scope of application of tax

    (1) The tax provided in the present title, hereinafter called income tax, shall apply to the following incomes:

    a) in case of Romanian resident natural persons, with the domicile in Romania, to the incomes obtained from any source, both from Romania and from outside Romania;

    b) in case of resident natural persons, other than those provided in letter a), only to the incomes obtained from Romania, which are taxed at the level of each source from the categories of incomes provided in Article 41;

    c) in case of non-resident natural persons who carry on independent activity through a permanent head office in Romania, the net income attributable to the permanent head office;

    d) in case of non-resident natural persons who carry on dependent activity in Romania, the net wage income from such dependent activity;

    e) in case of non-resident natural persons who obtain the incomes provided in Article 39 d), the income determined in accordance with the rules provided in the present title, which correspond to the respective category of income.

    (2) The natural persons who satisfy the conditions of residence provided in Article 7 (1) point 23 b) or c) for a period of 3 consecutive years shall be subject to income tax for the incomes obtained from any source, both from Romania and from outside Romania, beginning with the fourth fiscal year.

ART. 41 - Categories of incomes which are subject to income tax

    The categories of incomes which are subject to the income tax, according to the provisions of the present title, shall be the following:

    a) incomes from independent activities, defined according to Article 46;

    b) incomes from wages, defined according to Article 55;

    c) incomes from the grant of the use of goods, defined according to Article 61;

    d) incomes from investments, defined according to Article 65;

    e) incomes from pensions, defined according to Article 68;

    f) incomes from agricultural activities, defined according to Article 71;

    g) incomes from prizes and from gambling, defined according to Article 75;

    h) incomes from the transfer of real estates, according to Article 77^1;

    i) incomes from other sources, defined according to Article 78.

ART. 42 - Non-taxable incomes

    Within the meaning of the income tax, the following incomes shall not be taxable:

    a) aids, allowances and other forms of support with special destination, granted from the state budget, the state social insurance budget, the budgets of special funds, the local budgets and from other public funds, as well as those of the same nature received from other persons, with the exception of allowances for temporary industrial disablement. There shall not be taxable incomes the allowances for: maternal risk, maternity, child raise and care of sick child, according to the law;

    b) amounts collected from insurance of any kind as compensations, insured amounts, as well as any other rights, with the exception of gains received from the insurance companies as a result of the insurance contracts concluded between the parties, on the occasion of depreciation drawings. The compensation in money or in kind which are received by a natural person, as a result of a material damage suffered by such person, including compensations for moral damages, shall not be taxable incomes.

    b^1) amounts received after the expropriation for reasons of public use, according to the law;

    c) amounts received as compensations for damages incurred as a result of natural disasters, as well as for cases of disability or death, according to law;

    d) pensions for invalids of war, orphans, widows/widowers of war, fixed amounts for the care of pensioners who have been categorised as 1st degree invalids, as well as pensions, other than pensions paid from funds established from mandatory contributions to a social insurance system, including those from optional pensions funds, and those financed from the state budget;

    e) the equivalent value of coupons which constitute value tickets which are granted for free to natural persons according to legal provisions in force;

    f) amounts or goods received as sponsorship or patronage of art;

    g) incomes received as the result of the transfer of the property right over immovable and movable assets from personal patrimony, other than gains from the transfer of securities, as well as other than those defined in Chapter VIII^1;

    h) rights in cash and in kind received by military recruits or short-term soldiers, students and pupils of educational units from the sector of national defence, public order and national security, and by civilians, as well as those of officers and soldiers called up or mobilised;

    i) scholarships received by the persons who follow any form of education or professional training within an institutionalised framework;

    j) amounts or goods received as inheritance or donation. For real estates, in case of inheritance and donations, the regulations in Article 77^1 (2) and (3) shall apply;

    k) incomes from agriculture or forestry, with the exceptions provided in Article 71;

    l) incomes received by members of diplomatic missions or consular offices for the activities pursued in Romania in their official capacity, under conditions of reciprocity, by virtue of the general rules of international law or the provisions of special agreements to which Romania is a party;

    m) net incomes in foreign currency received by the members of diplomatic missions, consular offices and cultural institutions of Romania located abroad, in accordance with legislation in force;

    n) incomes received by the officials of international bodies and organisations from activities pursued in Romania in their official capacity, on the condition that the position of the official is confirmed by the Ministry of Foreign Affairs;

    o) incomes received by foreign citizens for the consulting activity pursued in Romania, in accordance with the unredeemable financing agreements concluded by Romania with other states, with international bodies and non-governmental organisations;

    p) incomes received by foreign citizens for activities pursued in Romania in the capacity of press correspondents, on condition that reciprocal treatment is granted to Romanian citizens for incomes from such activities and on condition that the position of such persons is confirmed by the Ministry of Foreign Affairs;

    q) amounts representing difference of the subsidised interest for the credits received in accordance with legislation in force;

    r) subsidies received for the acquisition of goods, if the subsidies are granted in accordance with legislation in force;

    s) incomes in the form of benefits in cash and/or in kind received by handicapped persons, veterans of war, invalids and widows of war, persons injured in war outside military service, persons persecuted for political reasons by the dictatorship beginning 6 March 1945, those deported abroad or declared prisoners, heirs of hero-martyrs, injured persons, and fighters for the victory of the Revolution of December 1989, as well as persons persecuted for ethnic reasons by the regimes established in Romania between 6 September 1940 and 6 March 1945;

    t) prizes obtained by sports persons medallists in world and European championships and the Olympic games. There shall not be taxable incomes the prizes, bonuses and sports allowances granted to sports persons, coaches, technicians and to other specialists, provided in legislation on such matters, in order to achieve objectives of high performance: obtaining a place on the victory podium at European championships, world championships and Olympic games, as well as the qualification and participation in the final competitions of the world and European championships, the first group, as well as in the Olympic games, in case of sports games. There shall not be taxable the bonuses and sports allowances granted to sports persons, coaches, technicians and other specialists, provided in legislation on such matters, for training and participating in official international competitions as representative teams of Romania;

    u) prizes and other rights in the form of accommodation, meals, transport and other similar, obtained by pupils and students in domestic and international competitions, including non-resident pupils and students in competitions carried on in Romania;

    v) the state premium granted for saving and lending under a collective system in the dwelling domain, in accordance with the provisions of the Government Emergency Ordinance No 99/2006 on credit institutions and capital adequacy, approved with amendments and additions by the Law No 227/2007;

    x) other incomes which are not taxable, as provided in each category of income.

ART. 43 - Taxation quotas

    (1) The taxation quota shall be of 16% and shall be applied on the taxable income corresponding to each source from each category for determining the tax on incomes from:

    a) independent activities;

    b) wages;

    c) grant of use of buildings;

    d) investments;

    e) pensions;

    f) agricultural activities;

    g) premiums;

    h) other sources.

    (2) The taxation quotas expressly provided for the categories of incomes included under Title III shall be exempt from the provisions of paragraph (1).

ART. 44 - Taxable period

    (1) The taxable period shall be the fiscal year which corresponds to the calendar year.

    (2) As an exception from the provisions of paragraph (1), the taxable period shall be shorter than the calendar year, in cases when the taxpayer dies during the course of the year.

ART. 45 - Establishing personal deductions and fixed amounts

    (1) The personal deduction, as well as the other fixed amounts, expressed in ROL, shall be established by order of the minister of public finance.

    (2) The amounts shall be calculated by their rounding off to one hundred thousands ROL, meaning that the fractions under ROL 10 shall be increases to ROL 10.

CHAPTER II - Incomes from independent activities

ART. 46 - Definition of incomes from independent activities

    (1) The incomes from independent activities shall include commercial incomes, incomes from free professions and incomes from intellectual property rights, obtained individually and/or in the form of an association, including incomes from adjacent activities.

    (2) Commercial incomes shall be considered the incomes from acts of trade of the taxpayer, from provision of services, other than the ones provided in paragraph (3), as well as from the practice of a trade.

    (3) Incomes from free professions shall be considered the incomes obtained from the exercise of medical professions, of the professions of lawyer, notary, financial auditor, fiscal consultant, chartered accountant, authorised accountant, consultant for investments in transferable securities, architect or other regulated professions, carried out in an independent manner, under the terms of law.

    (4) The incomes from the sale in any manner of the intellectual property rights shall be derived from patents, drawings and models, samples, production marks and trademarks, technical procedures, know-how, copyrights and rights connected to copyrights and other similar rights.

ART. 47 *** Repealed

ART. 48 - General rules for the determination of net income from independent activities based on the simple entry accounting

    (1) The net income from independent activities shall be determined as the difference between the gross income and the expenses made for the purpose of deriving income, which are deductible, on the basis of the data from the simple entry accounting, with the exception of the provisions of Articles 49 and 50.

    (2) Gross income shall include:

    a) the amounts collected and the equivalent in ROL of the incomes in kind from pursuing the activity;

    b) the incomes as interests from commercial debt claims or from other debt claims used in connection with an independent activity;

    c) the gains from the transfer of assets from the business patrimony, used in an independent activity, including the equivalent value of goods remained after the irrevocable shut-down of the activity, except for the reorganisations, when the destination of assets is preserved;

    d) the incomes from the commitment not to carry on an independent activity or not to compete with another person;

    e) the incomes from the cancellation or exemption of certain payment obligations incurred in connection with an independent activity.

    (3) The following shall not be considered to be gross income:

    a) the contributions in cash or the equivalent in ROL of contributions in kind made at the beginning of an activity or in the course of pursuing such activity;

    b) the amounts received in the form of bank credits or loans from natural or legal persons;

    c) the amounts received as compensations;

    d) the amounts or goods received as sponsorship, patronage of art or donations.

    (4) The expenses related to incomes must satisfy the following general conditions in order to be deducted:

    a) they must be effected within the framework of activities pursued for the purpose of obtaining income, justified by documents;

    b) they must be included in the expenses of the financial exercise for the year during which they were paid;

    c) they must observe the rules regarding depreciation, provided in title II, as the case may be;

    d) expenses for insurance premiums must be effected for:

    1. tangible or intangible fixed assets from the business patrimony;

    2. assets which serve as bank guarantees for the credits used in pursuing the activity for which the taxpayer is authorised;

    3. insurance premiums for professional risk insurance;

    4. persons who obtain incomes from wages, according to the provisions of Chapter III of the present title, on the condition that the amount representing the insurance premium is taxed to the beneficiary at the time of payment by the payer.

    (5) The following expenses shall have a limited deductibility:

    a) expenses for sponsorship, patronage of art, as well as for granting private scholarships, effected according to law, within the limit of a 5% quota of the calculation base determined according to paragraph (6);

    b) protocol expenses, within the limit of a 2% quota of the calculation base determined according to paragraph (6);

    c) amount of expenses for the allowance paid for the period of delegation and temporary secondment in another locality, in the country and abroad, for business purposes, within the limit of 2.5 times the legal level provided for public institutions;

    d) social expenses, within the limit of the amount obtained by applying a quota of up to 2% on the wage fund annually obtained;

    e) losses related to perishable goods, within the limits provided in statutory instruments on this matter;

    f) expenses for luncheon vouchers granted by employers, according to the law;

    f^1) expenses representing holiday tickets granted by the employers, according to the law;

    g) contributions made on behalf of employees to optional pension funds, in accordance with legislation in force, within the limit of the equivalent in ROL of EUR 400 every year for one person;

    h) insurance premium for voluntary health insurance, within the limit of the ROL equivalent of EUR 250 every year for one person;

    i) expenses effected both for an independent activity and for the personal purposes of the taxpayer or of the associates shall be deductible only for the part of the expense which is related to the independent activity;

    j) expenses representing mandatory social contributions for employees and taxpayers, including those for the insurance against accidents at work and professional diseases, according to the law;

    k) interest related to loans from natural and legal persons, other than the institutions which are pursuing the crediting activity as a profession, used in pursuing the activity, based on the contract concluded between the parties, within the limit of the level of the reference interest of the National Bank of Romania;

    l) expenses effected by the user, which represent the rent - leasing instalment - in case of operational leasing contracts, respectively expenses of depreciation and interests for financial leasing contracts, established in compliance with the provisions on leasing operations and leasing companies;

    m) subscriptions paid to the professional associations within the limit of 2% of the calculation base determined according to paragraph (6);

    n) expenses representing the mandatory professional contributions owed, according to the law, to the professional organisations to which the taxpayers belong, within the limit of 5% of the gross income obtained.

    (6) The calculation base shall be determined as the difference between the gross income and the deductible expenses, others than expenses for sponsorship, patronage of art, granting of private scholarships, protocol expenses, subscriptions paid to the professional associations.

    (7) The following shall not be deductible expenses:

    a) amounts or goods used by the taxpayer for personal or family use;

    b) expenses which correspond to non-taxable incomes, the sources of which are on the Romanian territory or abroad;

    c) income tax owed according to the present title, including the tax on income obtained abroad;

    d) expenses on insurance premiums, other than those provided in paragraph (4) d) and (5) h);

    e) donations of any kind;

    f) fines, confiscations, interests, delay penalty charges and penalty charges payable to Romanian and foreign authorities, according to legal provisions, other than those paid according to clauses of the commercial contracts;

    g) instalments related to contracted credits;

    h) *** Repealed

    i) expenses with the acquisition or the production of goods and depreciable rights from the stock book;

    j) expenses relating to goods found missing from the inventory or which are damaged and non-chargeable, if the inventory is not covered by an insurance policy;

    k) amounts or value of goods confiscated as a result of violating legal provisions in force;

    l) income tax borne by the payer of the income on behalf of the beneficiaries of income;

    l^1) during the period between 1 May 2009 - 31 December 2010, the expenses with fuel for motorised road vehicles solely intended for passenger road transport, with a maximum authorised weight not exceeding 3 500 kg and which do not have more than 9 passenger seats, including the driver's seat, except for the situation when the vehicles are classified into one of the following categories:

    1. vehicles used solely for: intervention, repairs, safeguard and protection, courier services, transport of employees to and from the place of carrying on the activity, as well as vehicles especially adjusted to be used as television camera truck, vehicles used by the salesmen and by employment recruitment agents;

    2. vehicles used for paid passenger transport, including for taxi driver's activity;

    3. vehicles used for rental to other parties, including for carrying on the training activity within the driver's courses.

    m) other amounts provided by the legislation in force.

    (8) The taxpayers obtaining incomes from independent activities shall be obliged to organise and keep the simple entry accounting, by observing the rules in force regarding accounting records and to write down in the day book of receipts and payments, the stock book and other accounting documents provided by legislation on this matter.

    (9) All goods and rights related to the pursuing of activity shall be entered in the stock book.

ART. 49 - Determination of net income from independent activities based on income norms

    (1) The net income from an independent activity which is designated according to paragraph (2) and which is pursued by a taxpayer, individually, without employees, shall be determined based on the income norms.

    (2) The territorial general directorates of public finance shall have the following obligations:

    - to establish the nomenclature, according to the Classification of activities in the national economy - CANE, approved by the Government Decision No 656/1997, as subsequently amended, for which the net income is determined based on income norms;

    - to establish the level of income norms;

    - to publish them on a yearly basis, in the course of the 4th quarter of the year preceeding the one when such norms are going to be applied.

    (3) The Ministry of Public Finance shall draw up methodological criteria containing rules to establish these income norms by the territorial general directorates of public finance. When establishing the tax the income norm from the place where the activity is pursued shall apply.

    (4) If a taxpayer carries on a designated independent activity only for periods which are shorter than a calendar year, then the income norm related to such activity shall be adjusted to reflect the period in the calendar year when such activity was pursued.

    (5) If a taxpayer carries on two or more designated activities, then the net income from these activities shall be determined based on the highest income norms for such activities.

    (6) If a taxpayer carries on an activity provided in paragraph (1) and another activity which is not provided in paragraph (1), then the net income from the independent activities pursued by the taxpayer shall be determined based on the simple entry accounting, according to Article 48.

    (7) If a taxpayer carries on the activity of transport of persons and goods under a taxi arrangement and also carries on another independent activity, then the net income from the independent activities pursued by the taxpayer shall be determined based on the data from the simple entry accounting, according to Article 48. In such case, the net income from such activities may not be less than the net income determined based on the income norm for the activity of transport of natural persons and goods under a taxi arrangement.

    (8) The taxpayers who carry on activities for which the net income is determined based on income norms shall not be obliged to organise and keep the simple-entry accounting for such activity.

ART. 50 - Determination of net income from intellectual property rights

    (1) The net income from intellectual property rights shall be determined by subtracting the following expenses from the gross income:

    a) a deductible expense equal to 40% of the gross income;

    b) the mandatory social contributions paid.

    (2) In case of incomes derived from the creation of works of monumental art, the net income shall be determined by deducting the following expenses from the gross income:

    a) a deductible expense equal to 50% of the gross income;

    b) the mandatory social contributions paid.

    (3) In case of the exploitation by the heirs of intellectual property rights, as well as in case of remuneration which constitutes the succession right and the compensatory remuneration for the private copy, the net income shall be determined by subtracting from the gross income the amounts payable to the collective administration bodies or other payers of such incomes, according to law, without applying the forfeiting quota expenses provided in paragraphs (1) and (2).

    (4) In order to determine the net income from intellectual property rights, the taxpayers shall fill in only the part of the day book of receipts and payments which refers to receipts. This regulation shall be optional for those who consider that they may satisfy their declaration obligations based directly on the documents issued by the payer of income. These taxpayers shall have the obligation to make archives and keep the documents in proof at least for the period of the prescription term provided by the law.

ART. 51 - Option to determine net income using the data in the simple entry accounting

    (1) The taxpayers who obtain incomes from independent activities which are taxed based on income norms, as well as those who obtain incomes from intellectual property rights, may choose to determine the net income in real system, as provided in Article 48.

    (2) The option to determine net income based on the data in the simple entry accounting shall be compulsory for the taxpayer for a period of 2 consecutive fiscal years and it shall be considered as renewed for a new period unless an application of renunciation is submitted by the taxpayer.

    (3) The option application for the determination of the net income in real system shall be submitted to the competent tax body until 31 January inclusive, in case of taxpayers who also pursued the activity in the previous year, and until the 15th day, inclusive, after the beginning of the activity, in case of taxpayers who began the activity during the fiscal year.

ART. 52 - Pay-As-You-Earn of tax representing advance payments for certain incomes from independent activities

    (1) The payers of the following incomes shall be obliged to calculate, withhold and pay in the tax by Pay-As-You-Earn, representing advance payments, from the incomes paid:

    a) incomes from the intellectual property rights;

    b) incomes from the sale of goods in a consignment arrangement;

    c) incomes from the activities pursued based on the agent contracts, commission or commercial mandates;

    d) incomes from activities carried out based on civil contracts/agreements concluded according to the Civil code;

    e) incomes from the activity of accounting and technical expertise, judicial expertise and extra-judicial expertise;

    f) the income obtained by a natural person from an association with a legal person which is a taxpayer, according to Title IV, which does not generate a legal person.

    (2) The tax which must be withheld shall be determined as follows:

    a) in case of incomes provided in paragraph (1) a) - e), by applying a taxation quota of 10% to the gross income;

    b) in case of the income provided in paragraph (1) f), by applying the taxation quota for the tax on the incomes of micro-enterprises to the incomes due to the natural person which is party in the association.

    (3) The tax which must be withheld shall be transferred to the state budget until the 25th inclusive of the month following the month when the income was paid, with the exception of the tax related to the incomes provided in paragraph (1) f), for which the transfer time limit shall be regulated according to Title IV.

    (4) The taxpayers who derive incomes for which advanced payments are calculated according to paragraph (2) a) may opt for the taxation of incomes according to Article 78.

ART. 53 - Advance payments of the tax on incomes from independent activities

    A taxpayer who carries on an independent activity shall have the obligation to make advance payments on account of the annual tax payable to the state budget, according to Article 82, with the exception of the incomes provided in Article 52, for which the advance payment is made by Pay-As-You-Earn or for which the tax is final according to the provisions of Article 78.

ART. 54 - Taxation of net income from independent activities

    The net income from independent activities shall be taxed according to the provisions of Chapter X of the present title.

CHAPTER III - Incomes from wages

ART. 55 - Definition of incomes from wages

    (1) Incomes from wages shall be all incomes in cash and/or in kind obtained by a natural person who carries on an activity based on an individual labour contract or a special statute provided by the law, irrespective of the period to which it refers, the denomination of the incomes or the manner in which they are granted, including allowances for temporary industrial disablement.

    (2) The taxation rules for the own incomes from wages shall also apply to the following types of incomes, considered as being assimilated to wages:

    a) allowances from the activities pursued as a result of a position of a public official, according to the law;

    b) allowances from activities pursued as a result of an elected position within the framework of non-profit making legal persons;

    c) rights to monthly military pay, allowances, premiums, bonuses, benefits and other rights of the military personnel, granted according to the law;

    d) gross monthly allowance, as well as the amount from the net profit, due to the administrators of the national firms/companies, of the trading companies where the state or a local public administration authority is a majority shareholder, as well as of the autonomous regies;

    d^1) the remuneration obtained by the managers based on an agency contract according to the law on trading companies;

    d^2) the remuneration received by the president of the owners' association or by other persons, based on the agency contract, according to the law concerning the establishment, organisation and operation of the owners' association;

    e) amounts received by the founding members of trading companies established by public subscription;

    f) amounts received by the representatives of the general assembly of shareholders, of the board of directors, the members of directorship and of the supervisory board, as well as of the commission of auditors;

    g) amounts received by the representatives of the tripartite bodies, according to the law;

    h) monthly allowances of the sole shareholder, at the level of the value recorded in the social insurance declaration;

    i) amounts granted by the non-profit organisations and other entities which are not payers of the profit tax, over the limit of 2.5 times the legal level established for the allowance received for the period of delegation or temporary secondments in another locality, in the country or abroad, for business purposes, for employees of the public institutions;

    j) allowances of administrators, as well as the amount from the net profit due to the administrators of the trading companies according to the constitutive act or established by the general assembly of shareholders;

    j^1) amounts representing wages or wage differences established based on a final and irrevocable court decision, as well as their update by the inflation index;

    j^2) monthly allowances paid according to the law by the employers during an non-competitive period, established according to the individual labour contract;

    k) any other amounts or benefits in the nature of wage or assimilated to wages.

    (3) Benefits, with the exception of those provided in paragraph (4), received in connection with an activity mentioned in paragraphs (1) and (2) shall include the following, but they shall not be limited to:

    a) the use of any good, including a vehicle of any type, from the business patrimony, for personal purposes, with the exception of transport along the two-way distance from the domicile to the work place;

    b) accommodation, food, clothes, personnel for household works, as well as other goods or services provided for free or at a price which is less than the market price;

    c) unredeemable loans;

    d) the cancellation of a debt claim of the employer over the employee;

    e) telephone subscriptions and the cost of telephone calls, including telephone cards, for personal purposes;

    f) travel permits by any transport means, used for personal purpose;

    g) insurance premiums paid by the payer for its own employees or another receiver of incomes from wages, at the moment of the payment of such premium, other than mandatory ones.

    (4) The following amounts shall not be included in wage incomes and shall not be taxable within the meaning of the income tax:

    a) aids for funerals, aids for losses in one's own household as a result of natural disasters, aids for serious and incurable diseases, aids for child birth, incomes consisting of gifts for the minor children of employees, gifts granted to female employees, the equivalent value of transport to and from the place of work of the employee, costs of supplies for treatment and rest, including transport for the own employees and their family members, granted by employers for their own employees or for other persons, as provided by the labour contract.

    The gifts granted by employers for the benefit of minor children of the employees, on the occasion of Easter, 1st June, Christmas and similar holidays of other religious cults, as well as the gifts granted to the female employees on the occasion of 8 March, shall not be taxable to the extent to which the value of the gift granted with respect to each person, for any of the above occasions, does not exceed ROL 150.

    The incomes of the nature of those provided above, obtained by natural persons, shall not be included in the wage incomes and shall not be taxable incomes if these incomes are received on the basis of certain special laws and are financed from the budget;

    a^1) day nursery tickets granted according to the law;

    a^2) holiday tickets granted according to the law;

    b) luncheon vouchers and rights to food granted by employers to employees, in accordance with the legislation in force;

    c) the equivalent value of the use of a business dwelling or a dwelling within the premises of the unit, according to the job distribution, appointment according to law, or the specific character of the activity by the framework of the statutory instrument specific to the scope of activity, compensation of the rent for personnel from the sector of national defence, public order and national safety, as well as the compensation of the difference of rent, borne by natural persons, according to the special laws;

    d) accommodation and the equivalent value of the rent for dwellings made available to public officials, consular and diplomatic employees working abroad, in accordance with the legislation in force;

    e) the equivalent value of technical equipment, individual protection and work equipment, protective food, medicines and hygienic-sanitary materials, and other rights of labour protection, as well as mandatory uniforms and equipment rights, which are granted according to the legislation in force;

    f) the equivalent value of the travel expenses for the transport between the locality where employees have their domicile and the locality where it is located the place of work of such employees, at the level of one monthly subscription, for situations where the dwelling or the equivalent value of the rent is not provided, according to law;

    g) amounts received by the employees to cover expenses of transport and accommodation of the allowance received for the period of delegation or temporary secondment in another locality, in the country or abroad, for business purposes. The amounts granted by legal persons without a patrimonial purpose and by other entities which are not payers of the profit tax over the limit of 2.5 times the allowance granted to employees of public institutions shall be excepted from these provisions;

    h) amounts received, according to the legal provisions, to cover the expenses effected for moving for business purposes;

    i) installation allowances which are granted only once, at the employment in a unit located in other locality than the locality of residence, during the first year of activity after graduation, within the limit of one basic wage at the employment, as well as installation and removal allowances granted, as provided by special laws, to personnel of public institutions and to those which establish domicile in localities within a disadvantaged zone, laid down according to the law, where they have their place of work;

    j) amounts representing compensatory payments, calculated on the basis of average net wages on the unit, received by persons whose individual labour contracts had been cancelled as the result of the collective lay-off, according to the law, as well as amounts representing compensatory payments, calculated on the basis of the average net wages on the economy, received by civil personnel from the sector of national defence, public order and national safety at the termination of the labour or job relationship, as a result of the reduction and restructuring needs, granted according to the law;

    k) amounts representing compensatory payments, calculated on the basis of net monthly military pay, granted to military personnel placed in reserve or for which the contract is terminated as the result of reduction and restructuring needs, as well as aids provided based on net monthly military pay, granted to such persons at their placing in reserve or direct withdrawal with the right to pensions or to persons who do not fulfil the conditions for pensions, as well as aids or compensatory payments received by policemen which are under similar situations, whose amount shall be determined in relation to the net monthly wage, granted as provided in legislation on such matters;

    k^1) incomes from wages obtained by the natural persons with severe or serious handicap, considered for their main position;

    l) incomes from wages as a result of the activity of creating computer programs; the framing in the activity of creating computer programs shall be made by joint order of the minister of labour, social solidarity and family, the minister of communication and information technology and the minister of public finance;

    m) amounts or benefits received by natural persons from dependent activities pursued in a foreign state, regardless of the fiscal treatment in such state. Exceptions shall be the wage incomes paid by or on behalf of an employer which is a resident of Romania or which has the permanent head office in Romania, which shall be subject to taxation regardless of the period of pursuing activities abroad;

    n) expenses effected by an employer for the vocational training and improvement of employees in connection with the activity pursued by such person for the employer;

    o) the cost of telephone subscriptions and telephone calls, including telephone cards, effected in order to satisfy the job attributions;

    p) benefits in the form of the right to stock options plan, at the moment of granting and at the moment of exercising such rights;

    r) the favourable difference between the preference interest established by negotiation and the interest practised on the market, for credits and deposits.

    (5) The benefits received in cash and in kind and charged to such employee shall not be taxable.

ART. 56 - Personal deduction

    (1) The natural persons provided in Article 40 (1) a) and (2) shall be entitled to the deduction from the monthly net income from wages of an amount as personal deduction, granted for each month of the taxable period only for the incomes from wages at the place of work of the main position.

    (2) The personal deduction shall be granted for the natural persons with a gross monthly income of up to ROL 1 000, inclusive, as follows:

    - for taxpayers who do not have dependants - ROL 250;

    - for taxpayers who have one dependant - ROL 350;

    - for taxpayers who have two dependants - ROL 450;

    - for taxpayers who have three dependants - ROL 550;

    - for taxpayers who have four or several dependants - ROL 650.

    For the taxpayers who earn monthly gross incomes from wages between ROL 1 000,01 and ROL 3 000 inclusive, the personal deductions shall be reduced as opposed to the ones above and they shall be established by order of the minister of public finance.

    For the taxpayers earning monthly gross incomes from wages over ROL 3 000 the personal deduction shall not be granted.

    (3) The dependant may be the wife/husband, children or other family members, relatives of the taxpayer or of the wife/husband up to the second rank inclusive, the incomes of which do not exceed ROL 250, irrespective of the fact that they are taxable or non-taxable.

    (4) In case a person is the dependant of several taxpayers, the amount representing the personal deduction shall only be attributable to a single taxpayer, according to the agreement between parties.

    (5) The underaged children, up to 18 years old, of the taxpayer shall be considered dependant.

    (6) The amount representing the personal deduction shall be granted to the dependants of the taxpayer, for that taxable period of the fiscal year when they were dependants. The period shall be rounded off to full months to the advantage of the taxpayer.

    (7) The following shall not be considered dependants:

    a) the natural persons who own agricultural and forestry land with a surface of more than 10 000 sq.m. in the hilly and plain areas and of more than 20 sq.m. in the mountain areas;

    b) the natural persons who obtain incomes from the cultivation and selling of flowers, vegetables in greenhouses, in solaria specially designed for such purposes and/or in an irrigated system, from the cultivation and sale of shrubs, decorative plants and mushrooms, from the operation of a viticulture nurseries and tree nurseries, irrespective of the surface.

    (8) The personal deduction determined according to the present article shall not be granted to the personnel sent in a permanent mission abroad, according to the law.

ART. 57 - Determination of tax on incomes from wages

    (1) The beneficiaries of incomes from wages shall owe a final monthly tax, which shall be calculated and Pay-As-You-Earn by the payers of incomes.

    (2) The monthly tax provided in paragraph (1) shall be determined as follows:

    a) at the location where the main position is exercised, by applying the 16% quota to the calculation base determined as the difference between the net income from wages, calculated as deduction from the gross income the mandatory contributions related to one month, of the following:

    - the personal deduction granted for that month;

    - the trade union subscription paid during that month;

    - the contributions to the optional pension funds, so as at the level of that year the equivalent value in ROL of EUR 400 is not exceeded;

    b) for the incomes obtained in other cases, by applying the 16% quota to the calculation base determined as difference between the gross income and the mandatory contributions for each place where such incomes were obtained.

    (2^1) In case of incomes from wages and/or of differences of incomes from wages established for previous periods, according to the law, the tax shall be calculated and withheld on the date when the payment is made, in compliance with the legal regulations in force for the incomes earned outside the main position, and transferred by the 25th of the month following the date of effecting their payment.

    (3) The payer shall be obliged to determine the total value of the annual tax for the incomes from wages, for each taxpayer.

    (4) The taxpayers may decide on the destination of an amount representing up to 2% of the tax established in paragraph (3), for supporting the non-profit entities set up and functioning according to the law, the cult units, as well as for granting private scholarships, under the law.

    (5) The obligation to calculate, withhold and pay the amount provided in paragraph (4) shall devolve on the competent tax body.

    (6) The procedure for the implementation of the provisions of paragraph (4) and (5) shall be established by order of the minister of public finance.

ART. 58 - Time limits for the payment of tax

    The payers of wages and incomes assimilated to wages shall be obliged to calculate and withhold the tax related to the incomes of each month, on the date of making the payment of such incomes, as well as to transfer it to the state budget until the 25th, inclusive, of the month following the month for which such incomes are paid.

ART. 58^1 - Deduction of amounts for saving and crediting in collective system for the dwelling domain, in accordance with the provisions of the Government Emergency Ordinance No 99/2006 on credit institutions and capital adequacy, approved with amendments and additions by the Law No 227/2007

    The taxpayer may deduct from the taxable incomes from wages, earned for the main position, the expenses made with the collective savings for the dwelling domain, in accordance with the provisions of the Government Emergency Ordinance No 99/2006 on credit institutions and capital adequacy, approved with amendments and additions by the Law No 227/2007, within the limits of a maximum amount equalling ROL 300 per year. The obligation to grant this deduction shall devolve on the relevant tax body and the implementation procedure shall be set forth by order of the minister of economy and finance.

ART. 59 - Fiscal sheets

    (1) The information referring to the calculation of tax on incomes from wages shall be included in fiscal sheets.

    (2) The payer of incomes shall have the obligation to fill in the forms provided in paragraph (1), for the entire period of making the payment of wages. The payer shall have the obligation to preserve the fiscal sheets for the entire period of employment and to transmit to the competent tax body and the employee, against his/her signature, a copy for each fiscal year, until the last day of the month of February of the current year, for the expired fiscal year. The model and contents of the forms shall be approved by order of the minister of public finance.

ART. 60 - The payment of the tax for certain wage incomes

    (1) The provisions of this article shall apply to taxpayers who carry on their activity in Romania and who obtain incomes as wages from abroad, as well as to Romanian natural persons who obtain incomes from wages as a result of activities pursued at diplomatic missions and consular offices accredited in Romania.

    (2) Any taxpayer provided in paragraph (1) shall have the obligation to declare and pay tax to the state budget on a monthly basis until the 25th, inclusive, of the month following the month when the income was obtained, either directly or through a fiscal representative. The tax related to one month shall be determined according to Article 58.

    (3) The diplomatic missions and consular offices accredited in Romania, as well as the representative offices of international bodies or the representative offices of trading companies and foreign economic organisations, authorised according to the law to carry on their activity in Romania, may opt to meet the obligations with regard to the calculation, withholding and payment of tax on incomes from wages, for their employees who obtain taxable incomes from wages in Romania. The provisions of paragraph (2) shall not apply to taxpayers in case the above-mentioned option is expressed and communicated to the relevant tax body.

    (4) A legal or natural person or any other entity for which the taxpayer carries on activity according to paragraph (1) shall have the obligation to supply information to the competent tax body regarding the date when the taxpayer begins to carry on the activity and, respectively, when he terminates such activity, within 15 days after such event takes place, except when he meets the obligations with regard to the calculation, withholding and payment of tax on incomes from wages, according to paragraph (3).

CHAPTER IV - Incomes from the grant of use of goods

ART. 61 - Definition of taxable incomes from the grant of use of goods

    (1) Incomes from the grant of use of goods shall be the incomes, in cash and/or in kind, resulting from the grant of the use of the movables and immovables, obtained by the owner, the beneficial owner or other legal holder, others than the incomes from independent activities.

    (2) The natural persons which derive incomes from the grant of use of assets from the carrying on of more than 5 contracts at the end of the fiscal year, starting with the next year shall qualify these incomes in the category of incomes from independent activities and they shall subject them to the rules for establishing the net incomes for this category. An order of the president of the National Agency of Fiscal Administration shall be issued for the application of this regulation.

ART. 62 - Determination of net income from the grant of the use of goods

    (1) The gross income shall be the total amount in cash and/or in the equivalent of ROL of the incomes in kind and shall be determined based on the rent or the lease of land provided in the contract concluded between the parties for each fiscal year, regardless of the moment of the receipt of the rent or the lease for land. The gross income shall be increased by the value of expenses which shall be incurred, according to the legal provisions, by the owner, the beneficial owner or other legal holder, if such expenses are effected by the other contracting party. In case the land lease is expressed in kind, the assessment in ROL shall be made based on average prices of agricultural products, as established by decisions of the county councils and, respectively, the General Council of the Municipality of Bucharest, as a result of the proposals received from the specialised territorial directorates of the Ministry of Agriculture, Forestry, Water and Environment, decisions which must be issued before the beginning of the fiscal year. Such decisions shall be transmitted within the same time limit to the general directorates of public finance of counties and the municipality of Bucharest in order to be communicated to the subordinated fiscal units.

    (2) The net income from the grant of the use of goods shall be determined by deducting from the gross income the expenses determined by applying the 25% quota on the gross income:

    (3) As an exception to the provisions of paragraphs (1) and (2), the taxpayers may choose to determine the net income from the grant of the use of goods in real system, based on the data from the simple entry accounting.

    (4) The provisions regarding the option provided in Article 51 (2) and (3), shall apply in the case of taxpayers specified in paragraph (3).

ART. 63 - Advance payments of tax on incomes from the grant of the use of goods

    (1) The taxpayers who obtain incomes from the grant of the use of goods during one year, with the exception of incomes from the lease of land, shall owe advance payments in account of the income tax to the state budget, according to Article 82.

    (2) Exceptions shall be the taxpayers who obtain incomes from the grant of the use of goods for which rent provided in the contract concluded between parties is established in ROL, did not opt for the determination of the net income in real system and at the end of the previous year they do not meet the conditions for classifying the incomes in the category of incomes from independent activities for which the advanced payment of tax equals the payable annual tax, and the tax is final.

ART. 64 - Taxation of net income from the grant of the use of goods in the annual global income

    The net income from the grant of the use of goods shall be taxed in accordance with the provisions of Chapter X of the present title.

CHAPTER V - Incomes from investments

ART. 65 - Definition of incomes from investments

    (1) Incomes from investments shall include:

    a) dividends;

    b) taxable incomes from interests;

    c) gains from the transfer of securities defined according to the provisions of Article 7;

    d) incomes from forward operations of sale-purchase of foreign currency, based on a contract, as well as any other similar operations;

    e) incomes from the liquidation of a legal person.

    (2) *** Repealed

    (3) The incomes from the first trading of the stocks issued by the "Property" Fund, by the natural persons to whom such stock were issued, under the terms of Titles I and IV of the Law No 247/2005 on the reform in the field of property and justice, as well as adjacent measures, as subsequently amended and supplemented, shall not be regarded as taxable incomes.

    (4) The incomes realised from the holding or trading of state securities and/or of bonds issued by administrative and territorial units shall not be taxable incomes.

ART. 66 - Determination of income from investments

    (1) The gain/loss resulted from the transfer of transferable securities, others than the securities in open investment funds and the shares, shall be the positive/negative difference between the sale price and the purchase price per types of securities, diminished, as the case may be, by the related costs of the transaction. In case of transactions with shares received by natural persons for free, as part of the Mass Privatisation Program, the purchase price for the first transaction shall be assimilated to the par value of such shares. In case of transactions with shares purchased at a preferential price, within the stock option plan system, the gain shall be determined as the difference between the sale price and the preferential purchase price, diminished by the related costs of the transaction.

    (2) In case of transfer of the property right over the securities in the open investment funds, the gain shall be determined as the positive difference between the redemption price and the purchase/subscription price. The redemption price is the price which the investor is entitled to at the withdrawal from the fund. The purchase/subscription price is the price paid by the investor, which is a natural person, for the acquisition of the security.

    (3) In case of transfer of the property right over the shares, the gain from the alienation of shares shall be determined as the positive difference between the sale price and the par value/purchase price. Beginning with the second transaction, the par value shall be replaced by the purchase price, which shall also include the expenses regarding the commissions, duties related to the transaction and other similar expenses justified with documents.

    (4) The determination of the gain according to paragraphs (1) - (3) shall be carried out on the date of the transaction, based on the contract concluded between the parties.

    (4^1) *** Repealed

    (5) The annual net gain shall be determined as difference between the gains and losses registered during the current year, as a result of trading securities, others than shares and transferable securities, in case of closed companies. The annual net gain shall be calculated based on the tax statement, submitted according to the provisions of Article 83.

    (6) For the transactions made during the fiscal year with the securities, others than shares and transferable securities, in case of closed companies, each broker or income payer, as applicable, shall have the following obligations:

    a) to calculate the annual gain/annual losses for the transactions made during the current year for each taxpayer;

    b) to transmit to the taxpayer the information on annual gain/annual loss, as well as on the tax calculated and withheld as advance payment, in writing by the 28th of February of the year following to the year which the calculation refers.

    (7) The incomes obtained as gains from forward sale and purchase operations of currency, based on contract, as well as any other operations of such type represent the favourable exchange differences resulted from these operations, at the time of concluding the operation and recording it in the client's account. The annual net gain shall be determined as difference between the gains and losses registered during the current year from such operations. The annual net gain shall be calculated based on the tax statement, submitted according to the provisions of Article 83. For the transactions made during the fiscal year each broker or income payer, as applicable, shall have the following obligations:

    a) to calculate the annual gain/annual losses for the transactions made during the current year for each taxpayer;

    b) to transmit to the taxpayer the information on annual gain/annual loss, as well as on the tax calculated and withheld as advance payment, in writing by it until the 28th of February of the year following to the year which the calculation refers.

    (8) The taxable income obtained from the liquidation of a legal person shall be the surplus from the distributions in cash or in kind exceeding the contribution to the registered capital of the receiving natural person.

ART. 67 - Withholding of tax from incomes from investments

    (1) The incomes as dividends, including the amounts received as a result of securities/participation titles in closed investment funds, shall be taxed with a 16% quota of the sum of such incomes. The legal persons shall be obliged to calculate and to withhold tax on incomes in the form of dividends at the same time with the payment of such dividends to shareholders or associates. The time limit for the payment of the tax shall expire on the 25th day inclusive of the month following the month when the payment is made. In case of distributed dividends which were not paid to shareholders or associates by the end of the year when the annual financial statements were approved, the dividend tax shall be paid until 25 January inclusive of that year.

    (2) The incomes in the form of interests for: forward deposits established, saving instruments acquired, civil contracts concluded, shall be taxed with a 10% quota of the amount of such incomes beginning with 1st January 2007. For incomes in the form of interests, the tax shall be calculated and withheld by the payers of such incomes, at the moment of their being entered in the current account or deposit account of the holder, or at the moment of the redemption, in case of saving instruments. In case of amounts received as interests for loans granted based on civil contracts, the calculation of tax payable shall be made at the moment of the payment of interest. The transfer of tax for incomes from interests shall be made monthly, until the 25th day inclusive of the month following the recording/redemption, in case of certain saving instruments, respectively at the moment of the payment of interest, for incomes of this type based on civil contracts. For the forward deposits established, saving instruments acquired, civil contracts concluded, sight deposits/current account prior to 1 January 2007, the maturity of which is starts on 1 January 2007, the taxation quota on the setting up date shall apply for the determination of the incomes from interests.

    (2^1) By way of exception from the provisions of paragraph (2), the incomes in the form of interest for time deposits and saving instruments earned starting with 1 January 2009 inclusively shall be non-taxable incomes.

    (3) The calculation, withholding, and payment of the tax on incomes from investments, others than those provided in paragraphs (1) and (2), shall be carried out as follows:

    a) the gains determined from the transfer of the securities, other than shares and transferable securities in case of closed companies, shall be taxed with a 1% quota, the tax withheld representing an advance payment in the account of the payable annual tax. The obligation to calculate, withhold and pay the tax representing advance payment shall devolve on the brokers, the investment management companies in case of redemption of securities in the open investment funds or on other income payers, as the case may be, for each transaction. The tax calculated and Paid-As-You-Earn shall be paid to the state budget, by 25th of the month following the month when the tax was withheld. For the transactions made during the fiscal year the taxpayer shall be obliged to submit the tax statement. The annual tax shall be determined by the competent tax body as follows:

    1. by applying a 16% quota on the net annual gain of each taxpayer, determined according to the provisions of Article 66 (5), for the securities sold and redeemed, in case of securities in open investment funds, starting on 1 January 2007, in a period shorter than 365 days as of the date of acquiring;

    2. by applying a 1% quota on the net annual gain of each taxpayer, determined according to the provisions of Article 66 (5), for the securities sold and redeemed, in case of securities in open investment funds, starting on 1 January 2007, in a period shorter than 365 days as of the date of acquiring;

    b) in case of gains from the transfer of securities, in case of closed companies, and from the transfer of the shares the obligation to calculate and withhold the tax shall devolve on the acquirer. The calculation and withholding of tax by the acquirer shall be made at the time of completing the transaction, based on the contract concluded by the parties. The tax shall be calculated by applying a 16% quota, for each transaction, the tax being final. The transmission of the property right over the transferable securities and shares must be recorded in the trade register and/or in the associates'/shareholders' register, as the case may be, and such operation can not be effected without a justification of the transfer of tax to the state budget. The deadline for the transfer of tax shall be until the date when the documents for the transcription of the property right over the shares or transferable securities are submitted to the trade register or to the shareholders' record, as the case may be, irrespective of the fact that the payment is made by instalments or not.

    c) the gains from sale and purchase forward operations with currency, on a contract basis, as well as from any other operations of this sort, others than those with financial instruments traded on authorised markets and supervised by the National Commission of Securities, shall be taxed with a 1% quota to each transaction, the tax withheld being advance payment in the account of the annual payable tax. The obligation to calculate, withhold and pay the tax representing advance payment shall devolve on the brokers or on other income payers, as the case may be. The tax calculated and withheld representing advance payment shall be paid by 25th of the month following the month when the tax was withheld. For the transactions made during the fiscal year the taxpayer shall be obliged to submit the tax statement. The annual tax shall be determined by the competent tax body by applying a 16% quota on the net annual gain of each taxpayer, determined according to the provisions of Article 66 (7).

    d) the taxable income obtained from liquidation of a legal person by the shareholders/associates - natural persons - shall be taxed with a 16% quota, the tax being final. The obligation to calculate, withhold and transfer the tax shall devolve on the legal person. The tax calculated and Paid-As-You-Earn shall be paid by the date of submitting the final financial statement with the trade register office, drawn up by the liquidators.

    (4) The losses from transactions with shares and securities, in case of closed companies, shall not recognised for tax purposes, shall not be set off and shall not be carried forward.

    (5) The losses resulted from trading the securities, others than those provided in paragraph (4), registered during the year, shall be set off at the end of the fiscal year with the gains of the same nature earned as a result of trading securities, others than those provided in paragraph (4), during this year. If following such offset an annual loss should arise, it shall only be carried forward during the next year, starting with the fiscal loss of the fiscal year 2010. The annual fiscal loss registered with the tax year 2009 shall not be carried forward.

    (6) The losses recorded from the forward operations for sale-purchase of foreign currency, based on a contract, as well as from any other operations of this sort, others than those with financial instruments traded on authorised markets and supervised by the National Commission of Securities, registered during the fiscal year shall be set off at the end of the fiscal year with the gains of the same sort earned during such year. If, as a consequence of this offset an annual loss arises, it shall not be carried forward.

    (7) *** Repealed

    (8) In order to apply the provisions of the present article, the norms regarding the determination, withholding and transfer of tax on capital gain from the transfer of securities obtained by the natural persons shall be used, approved by joint order of the Ministry of Public Finance and of the president of the National Commission of Transferable Securities.

    (9) By way of exception from the provisions of paragraph (3) a), during the period 1 January 2009 - 31 December 2009 inclusively, the gains realised by the natural persons from the transfer of securities, other than the shares and securities in case of closed companies, shall be non-taxable incomes.

    (10) The gains of natural persons from the transfer of securities, other than the shares and securities in case of closed companies, realised starting with 1 January 2010, shall be subject to the rules provided in paragraph (3) a).

ART. 67^1 *** Repealed

CHAPTER VI - Incomes from pensions

ART. 68 - Definition of incomes from pensions

    Incomes from pensions shall be the amounts received as pensions from funds established from the mandatory social contributions paid to a social insurance system, including those from optional pension funds and those financed by the state budget.

ART. 69 - Determination of the monthly taxable income from pensions

    The monthly taxable income from pensions shall be determined by subtracting from the income from pension a monthly non-taxable amount of ROL 1 000 and of the mandatory contributions calculated, withheld and paid by the natural person.

ART. 70 - Withholding of tax from the incomes from pensions

    (1) Any payer of incomes from pensions shall have the obligation to calculate on a monthly basis the tax related to such income, to withhold tax and to transfer the withheld tax to the state budget, according to the provisions of the present article.

    (2) The tax shall be calculated by applying the 16% taxation quota to the monthly taxable income from pensions.

    (3) The calculated tax shall be withheld on the date of actual payment of the pension and shall be transferred to the state budget until the 25th day inclusive of the month following the month when the pension is paid.

    (4) The withheld tax shall be the final tax of the taxpayer for the incomes from pensions.

    (5) In case of a pension which is not paid on a monthly basis, the tax which must be withheld shall be determined by distributing the paid pension to each month which the pension relates to.

    (6) The outstanding pension rights shall be spread over the months to which they relate, in order to calculate the owed tax, to withhold and transfer it.

    (7) Incomes from successor pensions shall be individualised depending on the number of successors and the taxation shall be made in ratio with the rights due to each successor.

    (8) In case of incomes from pensions and/or of differences of incomes from pensions established for the previous periods, according to the law, the tax shall be calculated on the monthly taxable income and it shall be withheld at the date of payment, in accordance with the legal regulations in force of the date of payment and it shall be transferred by the 25th of the month following the month when they were paid.

    (9) The tax on the incomes from pensions shall be withheld and transferred entirely to the state budget.

CHAPTER VII - Incomes from agricultural activities

ART. 71 - Definition of incomes from agricultural activities

    The incomes from agricultural activities shall be the incomes from the following activities:

    a) the cultivation and sale of flowers and vegetables, in greenhouses and solaria specially designed for such purposes and/or in an irrigated system;

    b) the cultivation and sale of shrubs, decorative plants and mushrooms;

    c) the operation of a viticulture nurseries and tree nurseries and others similar.

    d) selling the farming products obtained after harvesting, in their natural state, from the farming lands that are private property or lease-holds, by specialised units for collection, industrial processing units or to other units, for using them as such, starting on 1 January 2008.

ART. 72 - Determination of annual net income from agricultural activities based on the income norms

    (1) The net income from an agricultural activity shall be determined based on income norms. The income norms shall be established by the specialised territorial directorates of the Ministry of Agriculture, Forestry and Rural Development and shall be approved by the territorial general directorates of public finance of the Ministry of Public Finance. The income norms shall be established, endorsed and published by 31 May of the year to which such income norms shall apply, at the latest.

    (2) The income norms shall be established per unit of surface area.

    (3) If an agricultural activity is pursued by a taxpayer for shorter period - the beginning, the end and other fractions of the year -, representing less than a calendar year, then the income norm related to such activity shall be adjusted so as to reflect the period of the calendar year when the activity is pursued.

    (4) If an agricultural activity of a taxpayer registers a loss due to a natural disaster, then the income norm related to such activity shall be reduced so as to reflect such loss.

    (5) The taxpayers pursuing activities for which the net income is determined based on income norms shall not be obliged to organise and keep simple entry accounting, for such activity.

ART. 73 - Option to determine the annual net income by using the data from the simple entry accounting

    (1) A taxpayer pursuing an agricultural activity, provided in Article 71, may elect to determine the net income from such activity based on the data from the simple entry accounting, as provided in Article 48.

    (2) The provisions regarding the option provided in Article 51 (2) and (3), shall also apply in case of taxpayers specified in paragraph (1).

ART. 74 - Calculation and payment of tax for incomes from agricultural activities

    (1) The tax on the net income from agricultural activities shall be calculated by applying a 16% taxation quota to the net income, determined both on the basis of income norms and in a real system, and the tax shall be final.

    (2) Any taxpayer that pursues an agricultural activity, specified in Article 71, for which the income is determined based on income norms, shall have the obligation to submit, on an annual basis, an income statement to the competent tax body, by the 25th May inclusive of the fiscal year, for the current year. In case of an activity which a taxpayer begins to pursue after the 25th of May, the income statement shall be submitted within 15 days, inclusive, after the date when the taxpayer begins to pursue his activity.

    (3) In case of a taxpayer who determines the net income from agricultural activities based on the data from the simple entry accounting, such taxpayer shall have the obligation to make advance payments related to such incomes to the state budget by the time limits provided in Article 82 (3).

    The advance payments shall be regularised by the competent tax body that shall issue an annual taxation decision.

    (4) In case of taxpayers that derive cash incomes from agriculture, according to the provisions of Article 71 d), by selling the products to specialised units for collection, industrial processing units or to other units, for using them as such, the tax shall be calculated by Pay-As-You-Earn by applying a 2% quota on the value of the supplied products, starting on 1 January 2009, the tax being final.

    (5) The procedure for applying the provisions of paragraph (4) shall be set forth by norms issued by the Ministry of Agriculture, Forests and Rural Development, with the advisory opinion of the Ministry of Public Finance.

CHAPTER VIII - Incomes from prizes and from gambling

ART. 75 - Definition of incomes from prizes and from gambling

    (1) The incomes from prizes shall include incomes from contests, others than those provided in Article 42, as well as from promoting the products/services as a result of the commercial practices, according to the law.

    (2) The incomes from gambling shall include gains obtained as a result of gambling, including jack-pot-type games defined according to the methodological norms.

ART. 76 - Determination of net income from prizes and gambling

    The net income is the difference between the incomes from prizes and gambling and the amount representing non-taxable income.

ART. 77 - Withholding of tax on incomes from prizes and from gambling

    (1) The incomes from prizes shall be taxed, by Pay-As-You-Earn, by applying a 16% quota on the net income earned from each prize.

    (2) The incomes from gambling shall be taxed, by Pay-As-You-Earn by applying a 20% quota on the net income not exceeding the amount of ROL 10 000 and a 25% quota applied on the net income exceeding the amount of ROL 10 000 inclusively. The net income shall be calculated at the level of the earnings made in one day by the same organiser or payer.

    (3) The payers of incomes shall be obliged to calculate, withhold and transfer the tax.

    (4) The incomes obtained from prizes and gambling, in cash and/or in kind, which are below the value of the non-taxable amount of ROL 600 obtained by the taxpayer:

    a) for each contest;

    b) for the gambling, obtained by the same organiser or payer in a single day, shall not be taxable.

    (5) The tax calculated and withheld at the time of payment shall be final tax.

    (6) The income tax thus calculated and withheld shall be transferred to the state budget until the 25th inclusive of the month following the month when the income was withheld.

CHAPTER VIII^1 - Incomes from the transfer of the real estates from the personal patrimony

ART. 77^1 - Definition of the income from the personal property real estate transfer

    (1) Upon the transfer of the ownership right and of its divisions, by the legal acts concluded by the living on the constructions of any sort and their related lands, the taxpayers shall pay a tax calculated as follows:

    a) for the constructions of any sort and their related lands, as well as for the lands of any sort without constructions acquired within up to 3 years inclusive:

    - 3% up to ROL 200 000 inclusive;

    - over ROL 200 000, ROL 6 000 + 2% calculated at a value exceeding ROL 200 000 inclusive;

    b) for the real estates described in letter a) acquired within more than 3 years:

    - 2% up to ROL 200 000 inclusive;

    - over ROL 200 000, ROL 4 000 + 1% calculated at a value exceeding ROL 200 000 inclusive.

    (2) The tax provided in paragraph (1) shall not be payable in the following instances:

    a) upon acquiring the ownership right over any sort of lands and constructions, by the restoration of the ownership right pursuant to special laws;

    b) upon acquiring the ownership right as donation among relatives and in-laws up to the 3rd degree inclusive, as well as among spouses.

    (3) For transmitting the ownership right and its divisions as inheritance the tax provided in paragraph (1) shall not be payable, if the inheritance is debated upon and completed within 2 years as of the death of the author of inheritance. In case of failure to complete the succession proceedings within the above-mentioned time limit, the inheritors must pay a 1% tax calculated at the value of the corpus.

    (4) The tax provided in paragraphs (1) and (3) shall be calculated at the value declared by the parties in the act whereby the ownership right or its divisions are transferred. In case the declared value is lower than the indicative value established by the expertise drawn up by the public notary chamber, the tax shall be calculated at the level of the value established by the expertise, except for the transactions concluded between relatives and in-laws up to the 2nd rank inclusively, as well as between spouses, in which case the tax shall be calculated at the value declared by the parties in the act whereby the ownership right is transferred.

    (5) The public notary chamber shall update at least once a year the expertise on the circulation value of the immovable assets that shall be communicated to the territorial directorates of the Ministry of Public Finance.

    (6) The tax provided in paragraph (1) and (3) shall be calculated and cashed by the notary public before the authentication of his act or, as applicable, the authentication for completing the succession. The tax calculated and cashed shall be transferred by the 25th of the month following the month when it was withheld. In case the transfer of the ownership right and of its divisions, for the instances provided in paragraphs (1) and (3), is ruled by a judgment or by other procedure, the tax provided in paragraphs (1) and (3) shall be calculated and collected by the competent fiscal body. The courts that deliver final and irrevocable judgments shall communicate to the fiscal body the judgment and the related documentation within 30 days as of the date when the judgment is final and irrevocable. For other procedures than the notary or judicial procedure the taxpayer shall be obliged to declare the obtained income within maximum 10 days as of the date of the transfer, at the competent tax body, in view of calculating the tax. In order to register the rights acquired based on the acts authenticated by the notaries public or on the inheritance certificates or, as the case may be, on the judgments and on the other documents in the other cases, the registrars at the land offices shall verify that the tax payment obligation provided in paragraphs (1) and (3) is met and, in case evidence of payment of such tax is not produced, they shall reject the registration application until the tax is paid.

    (7) The tax established under the terms of paragraph (1) and (3) shall be entirely transferred to, and withheld at the state budget.

    (8) The procedure for calculation, collection and payment of the tax charged under the terms of paragraphs (1) and (3), as well as the declaration obligations shall be established by methodological norms issued by joint order of the minister of public finance and of minister of justice, after the consultation of the National Union of the Notaries Public from Romania.

ART. 77^2 - Tax Correction

    In case that, after the authentication of the act or drawing up the authentication for completing the succession proceedings by the notary public, errors or omissions are found in calculating and collecting the tax provided in Article 77^1 (1) and (3), the notary public shall notify the competent tax body on this situation, by providing reasons for the causes of errors or omissions. The competent tax bodies shall issue taxation decisions for the taxpayers nominated under Article 77^1 (1) and (3), with a view to tax collection. The liability of the notary public for the failure to collect or for the miscalculation of the tax provided in Article 77^1 (1) and (3) shall be engaged only in case it can be proved that the failure to fully or partly cash can be blamed on the ill-intentioned notary public that failed to meet this obligation.

ART. 77^3 - Declarative obligations of the public notaries with regard to the transfer of real estate

    The notary public shall be obliged to submit quarterly to the territorial tax body an information declaration regarding the transfers of real estates, including the following elements for each transaction:

    a) the contracting parties;

    b) the value written in the transfer document;

    c) the tax on the income from the transfer of the real estates from the personal patrimony;

    e) the notary fees related to the transfer.

CHAPTER IX - Incomes from other sources

ART. 78 - Definition of incomes from other sources

    (1) In this category the following incomes shall be included, but they are not limited to these:

    a) insurance premiums borne by an independent natural person or by any other entity, within an activity for a natural person with which the bearer does not have a relationship which generates incomes from wages, according to Chapter III of the present title;

    b) gains received from insurance companies, as a result of the insurance contract concluded between the parties on the occasion of the depreciation drawings;

    c) incomes, in the form of the price differences for certain goods, services and other rights, received by the natural persons, which are pensioners, former employees, according to clauses of labour contracts or based on special laws;

    d) incomes received by the natural persons representing duties from activities of commercial arbitration.

    e) incomes received by the natural persons from activities mentioned in Article 52 a) - e) in case the taxpayer expressed the taxation option for these incomes according to the provisions of Article 79. The taxation option of the gross income shall be expressed in writing, at the time of conclusion of each legal relation/contract, and shall be applicable to the incomes earned as a result of pursuing the activity based on such relation/contract.

    (2) The incomes from other sources shall be any incomes identified as being taxable, that are not subject to the categories provided in Article 41 a) - h), others than the incomes which are non-taxable in accordance with the present title, as well as those mentioned in the norms drawn up for the application of this article.

ART. 79 - Calculation of tax and payment time limit

    (1) The income tax shall be calculated by Pay-As-You-Earn at the time of the payment of income by the payers of incomes, by applying a 16% quota on the gross income.

    (2) The tax calculated and withheld shall be final tax.

    (3) The tax thus withheld shall be transferred to the state budget until the 25th day, inclusive, of the month following the month when the income was withheld.

CHAPTER X - Taxable annual net income

ART. 80 - Determination of taxable net income

    (1) The taxable annual net income shall be determined for each source of the categories of incomes provided in Article 41 a), c) and f) by deducting from the annual net income the carried-over fiscal losses and shall be written down in the taxation declaration.

    (2) The incomes in the categories provided in Article 41 a), c) and f), which are earned during a part of a year or during different periods which are fractions of the same year, shall be considered taxable annual income.

    (3) The annual fiscal loss registered for each source from independent activities, from the grant of use of goods and from agricultural activities shall be carried over and supplemented by the incomes from the same source of income from the next 5 fiscal years.

    (3^1) The losses originated abroad shall be carried over and compensated with the incomes of the same nature and source, obtained from abroad, per each country, registered during the next 5 fiscal years.

    (4) Rules for the carrying over of losses shall be the following:

    a) the carrying over shall be made chronologically, based on the length in time of the loss, during the next 5 consecutive years;

    b) the right to carry over shall be personal and non-transmissible;

    c) the carried over loss which is not compensated after the end of the period provided in letter a) shall constitute a final loss of the taxpayer.

ART. 81 - Estimated income statements

    (1) The taxpayers, as well as the associations without legal personality, which begin an activity during the fiscal year shall be obliged to submit to the competent tax body a statement referring to the incomes and expenses estimated to be obtained for such fiscal year, within 15 days after the occurrence of such event. The taxpayers who obtain incomes for which the tax is Pay-As-You-Earn shall be excepted from the provisions of this paragraph.

    (2) The taxpayers who obtain incomes from the grant of the use of goods from the personal patrimony shall be obliged to submit an estimated income statement, within 15 days after the date when the contract between the parties is concluded. The estimated income statement shall be submitted to the tax body at the same time with the registration of the contract concluded between the parties.

    (3) The taxpayers who registered losses during the previous year and those who obtained incomes for periods shorter than one fiscal year, as well as those who, from objective reasons, estimate that they will earn incomes which differ by at least 20% from the incomes of the prior year shall submit an estimated income statement at the same time with the taxation statement.

    (4) The taxpayers who determine the net income based on incomes norms, as well as those whose expenses are determined in a forfeit system, and who have chosen to determine net income in real system, shall also submit an estimated income statement at the same time with the option application.

ART. 82 - Determination of advance payments of tax

    (1) The taxpayers who obtain incomes from independent activities, from the grant of the use of goods, except the incomes derived from the lease of land, as well as incomes from agricultural activities, shall be obliged to make advance payments as tax during the year, except for the incomes for which the advance payments are made by Pay-As-You-Earn.

    (2) The competent tax body shall determine the advance payments for each income source, taking as the calculation base the estimated annual income or the net income obtained during the previous year, as the case may be, by issuing a decision which shall be communicated to the taxpayers according to the law. For the taxations carried out after the expiry of the payment time limits provided in paragraph (3), the taxpayers shall be obliged to make the advance payments at the level of the amount payable for the last payment time limit of the previous year. The difference between the annual tax calculated on the net income earned during the previous year and the amount representing advance payments payable by the taxpayer at the level of the fourth quarter of the previous year shall be allocated to future time limits in the fiscal year. For the estimated income statements, submitted in December, advance payments shall no longer be determined, following that the net income related to the period remained until the end of the year be subject to taxation, based on the taxation decision. The advance payments for incomes from the grant of the use of goods, with the exception of incomes from the lease of lands, shall be determined by the tax body as follows:

    a) based on the contract concluded between the parties; or

    b) based on the incomes determined according to the data in the simple entry accounting, depending on the option. In case that, according to the contract clauses, the income from the grant of the use of goods is the ROL equivalent of an amount denominated in foreign currency, the estimated annual incomes shall be determined based on the foreign exchange rate on the foreign currency market, as communicated by the National Bank of Romania, existing in the day preceding the one when the taxation is carried out.

    (3) The advance payments shall be made in 4 equal instalments, by the 15th day inclusive of the last month of each quarter. Exception shall be the incomes from the lease of lands, for which the taxpayer pays the tax, based on the income statement. The taxpayers who determine the net income from agricultural activities, according to Articles 72 and 73, shall owe advance payments to the state budget for the tax related to such income, in two equal instalments, as follows: 50% of the tax by 1st September inclusive, and 50% of the tax by 15 November inclusive.

    (4) The time limits and the procedure for issuing the decisions for advance payments shall be established by an order of the president of the National Agency for Tax Administration.

    (5) For the determination of advance payments, the tax body shall use the estimated annual income as calculation base, in all situations where it was submitted a statement regarding the estimated income for the current year or the net income from the special statement for the previous fiscal year, as the case may be. When determining the advance payments, the 16% taxation quota, provided in Article 43 (1) shall be used.

    (6) The advance payments established based on the contracts concluded between parties where the rent is expressed in ROL, according to the provisions of Article 63 (2), as well as for the incomes for independent activities and agricultural activities, imposed based on income norms, represents final tax.

ART. 83 - Statement on the earned income

    (1) The taxpayers that earn, individually or in a form of association, incomes from freelance activities, incomes from the grant of use of goods, incomes from agricultural activities, determined in a real system shall be obliged to submit a taxation statement on the earned income with the competent tax body, for each fiscal year, by the 25th May inclusive of the year following the year when the income is earned. The taxation statement shall be filled out for each source and income category. For the incomes earned in a form of association, the income declared shall be the net income/loss distributed from the association.

    (2) The taxation statement shall also be filled out for the annual net gain/annual net loses, generated by:

    a) transactions with securities, others than shares and transferable securities, in case of closed companies;

    b) forward sale and purchase operations for foreign currency, on a contract basis, and other such operations.

    (3) The submission of taxation statement shall not be required for the following categories of incomes:

    a) net incomes determined based on income norms, except for taxpayers who submitted estimated income statements in December and for which no advance payments were established, according to the law;

    b) incomes from the grant of use of the goods provided in Article 63 (2), for which the taxation is final;

    c) incomes as wages and incomes assimilated to wages, for which the information is included either in fiscal records, which have the status of statements of taxes and duties, or in monthly statements, which are submitted by the taxpayers as provided in Article 60;

    d) incomes from investments, except for those provided in paragraph (2), as well as incomes from prizes and from gambling, for which the taxation is final;

    e) incomes from pensions;

    f) incomes from agricultural activities for which the taxation is final, according to the provisions of Article 74 (4);

    g) incomes from the transfer of real estate property;

    g) incomes from other sources.

ART. 84 - Determination and payment time limit of tax on taxable annual net income

    (1) The tax on the taxable annual net income/net gain payable shall be calculated by the competent tax body based on the statement, by applying the 16% taxation quota or the quotas provided in Article 67 (3) a), respectively, to the taxable annual net income/net gain of that fiscal year.

    (1^1) On the 25th May of each fiscal year represents both a time limit for declaration and a payment deadline of the tax on income.

    (2) The taxpayers may decide upon the destination of an amount of up to 2% of the tax payable for the taxable annual net income payable, annual net gain from the transfer of securities, annual net gain from forward operations of sale-purchase of foreign currency, based on a contract, as well as any other similar operations, for supporting the non-profit entities set up and functioning according to the law, the cult units, as well as for granting private scholarships, under the law.

    (3) The competent tax body shall have the obligation to calculate, withhold and transfer the amount of up to 2% of the tax payable for:

    a) taxable annual net income;

    b) annual net gain from the transfer of securities;

    c) annual net gain from forward operations of sale-purchase of foreign currency, based on a contract, as well as any other similar operations.

    (4) The procedure used for applying the provisions of Article (1), (2) and (3) shall be established by order of the president of the National Agency for Tax Administration, in accordance with the provisions of the Government Ordinance No 92/2003 on the Fiscal Procedure Code, republished, as subsequently amended and supplemented.

    (5) *** Repealed

    (6) *** Repealed

CHAPTER XI - Joint property and associations without legal personality

ART. 85 - Income from goods or rights jointly held

    The net income obtained from the exploitation of goods or rights of any kind, held jointly, shall be considered as being obtained by the owners, beneficial owners or other legal holders, recorded in an official document, and shall be allocated in proportion to the shares which they hold in such property or equally, in case these are not known.

    ART. 86

    Rules regarding the associations without legal personality

    (1) The provisions of the present article shall not apply to:

    - associations without legal personality provided in Article 28;

    - investment funds which are established as associations without legal personality;

    - associations with a legal person payer of profit tax, in which case only the fiscal regulations of Title II are applicable.

    - the privately managed pension funds and the voluntary pension funds established according to the provisions of the specific legislation on these matters.

    (2) Within each association without legal personality, established according to law, the associates shall be obliged to conclude contracts of association in writing, at the beginning of the activity, which shall inclusively comprise data with regard to:

    a) the contract parties;

    b) the object of activity and the head office of the association;

    c) the contribution of each associate to goods and rights;

    d) the percentage quotas of the securities of each associate in the incomes or losses from within the association corresponding to their contributions;

    e) the designation of the associate who will be responsible for fulfilling the obligations of the association before the public authorities;

    f) the conditions for termination of the association. The contributions of the associates according to the contract of association shall not be considered incomes of the association. The contract of association shall be registered with the territorial tax body within the 15 days after the date of conclusion of such contract. In case the contracts do not include the data required according to this paragraph, the tax body shall have the right to reject the registration of contracts.

    (3) In case the members of the association are related up to the 4th degree, inclusive, the parties shall be obliged to submit evidence that they participate in the obtaining of incomes with goods or rights over which they hold the property right. The natural persons who have acquired limited capacity of exercise may also be members of the association.

    (4) The associations shall be obliged to submit to the competent tax body, by 15 March of the following year, annual income statements, according to the model established by the National Agency of Tax Administration, which shall also include the distribution of net income/loss per associates.

    (5) The annual income/loss, obtained by the association, shall be distribution to associates in proportion to the percentage share-quota corresponding to their contribution, according to the contract of association.

    (6) The fiscal treatment of the income obtained from the association, in cases other than the associations with a legal person, shall be established in the same manner as for the category of incomes within which it is framed.

    (7) The profit/income payable to a natural person, from an association with a Romanian legal person, small-sized enterprise, which does not generate a legal person, determined in compliance with the rules provided in Title IV, shall be assimilated, with a view to taxation at the level of the natural person, to the income from independent activities, from which the mandatory contributions are deducted in order to obtain the net income.

    (8) The tax withheld by a legal person in the account of a natural person, for the incomes obtained from an association with a Romanian legal person which does not generate a legal person, shall be an advance payment in the account of the annual income tax. The Romanian legal person shall have the obligation to calculate, withhold and transfer the tax, determined according to the methodology provided in the legislation on the tax on the incomes of micro-enterprises.

CHAPTER XII - International fiscal aspects

ART. 87 - Incomes of non-resident natural persons from independent activities

    (1) The non-resident natural persons pursuing independent activities through a permanent head office in Romania shall be taxed, according to the present title, on the taxable annual net income from the independent activity, which is attributable to the permanent head office.

    (2) The net income from an independent activity which is attributable to a permanent head office shall be determined according to Article 48, under the following conditions:

    a) only incomes attributable to the permanent head office are included in the taxable incomes;

    b) only expenses related to the obtaining of such incomes are included in the deductible expenses.

ART. 88 - Incomes of non-resident natural persons from dependent activities

    The non-resident natural persons pursuing dependent activities in Romania shall be taxed, according to the provisions of Chapter III of the present title, only if at least one of the following conditions is satisfied:

    a) the non-resident natural person is present in Romania for a period or for periods which exceed in total 183 days during any period of 12 consecutive months, which ends in the calendar year in question;

    b) the wage incomes are paid by or on behalf of an employer which is a resident;

    c) the wage incomes are deductible expense of a permanent head office in Romania.

ART. 89 - Other incomes of non-resident natural persons

    (1) The non-resident natural persons who obtain other incomes than those provided in Articles 87, 88, and Title V shall owe tax as provided in the rules of the present title.

    (2) Incomes subject to taxation from the categories mentioned in paragraph (1) shall be determined for each source, according to the specific rules of each category of income and the tax shall be final.

    (3) Except for the payment of the income tax by Pay-As-You-Earn, the taxpayers, which are non-resident natural persons, who earn incomes from Romania, according to the present title, shall be obliged to declare and pay the tax corresponding to each income source, either directly or through a fiscal representative, according to the Government Ordinance No 92/2003 on the fiscal procedure code, republished, with subsequent amendment and additions.

ART. 90 - Incomes obtained from abroad

    (1) The natural persons provided in Article 40 (1) a), and those who satisfy the condition provided in Article 40 (2) shall owe tax for incomes obtained from abroad.

    (2) The incomes obtained from abroad shall be subject to taxation by applying the taxation quotas to the calculation base determined according to the rules specific to each category of income, based on the nature of the income.

    (3) The taxpayers who obtain incomes from abroad according to paragraph (1) shall be obliged to declare such incomes, according to the taxation statement, by the 25th May of the year following the year when the income is obtained.

    (4) *** Repealed

    (5) *** Repealed

ART. 91 - External fiscal credit

    (1) The taxpayers, which are resident natural persons, who, for the same income and during the same taxable period, are subject to income tax both on the territory of Romania and abroad, shall have the right to deduct from the income tax payable in Romania the tax paid abroad, hereinafter called external fiscal credit, within the limits provided in the present article.

    (2) The external fiscal credit shall be granted provided that the following conditions are cumulatively satisfied:

    a) the tax paid abroad for the income obtained abroad was actually paid directly by the natural person or by his/her legal representative, or by Pay-As-You-Earn by the payer of income. The payment of the tax abroad shall be proved with a document in proof issued by:

    1. the tax authority of such foreign state;

    2. the employer, in case of incomes from wages;

    3. other payer of income, for other categories of incomes;

    b) the income for which the fiscal credit is granted is included in one of the categories of incomes provided in Article 41.

    (3) The external fiscal credit shall be granted at the level of the tax paid abroad, related to the income from the source from abroad, but it may not exceed the part of the income tax payable in Romania, related to the taxable income from abroad. In case the taxpayer in question obtains incomes from abroad from several states, then the external fiscal credit admitted to be deducted from the tax payable in Romania shall be calculated, according to the above-mentioned procedure, for each country and each category of income.

    (3^1) After the date of accession of Romania to the European Union, for the incomes from savings, defined in Article 124^5, obtained by the natural persons that are residents in those Member States with a transitional period specified in Article 124^9 the method of elimination of double taxation shall be applied.

    (4) *** Repealed

    (5) In order to calculate the external fiscal credit, the amounts denominated in foreign currency shall be converted at the annual average exchange rate of the foreign exchange market in the year of obtaining of the income, communicated by the National Bank of Romania. The incomes from abroad obtained by the resident natural persons, as well as the related tax, denominated in the monetary units of such state, but which are not listed by the National Bank of Romania, shall be converted as follows:

    a) from the monetary unit of the state of source into a foreign currency of international circulation, such as US dollars or Euros, by using the rate of exchange of the state of source;

    b) from the foreign currency of international circulation into ROL, by using the average annual exchange rate of such currency, as communicated by the National Bank of Romania, from the year of obtaining of such incomes.

ART. 92 *** Repealed

CHAPTER XIII - Declarative obligations of payers of incomes by Pay-As-You-Earn

ART. 93 - Declarative obligations of payers of incomes by Pay-As-You-Earn

    (1) The payers of incomes, under a scheme of Pay-As-You-Earn of taxes, shall be obliged to calculate, withhold, transfer and declare the tax Pay-As-You-Earn by the time limit of its transfer inclusive, with the exceptions provided in the present title.

    (2) The payers of incomes, under a scheme of Pay-As-You-Earn of taxes, shall be obliged to submit a statement regarding the calculation and withholding of tax for each receiver of income to the competent tax body, by 30 June of the current year for the expired year.

    (3) The following shall be exempt from the time limit provided in paragraph (2) and shall be obliged to submit the statement, by the last day of February inclusive of the current year, for the expired year:

    a) payers of incomes from freelance activities provided in Article 52;

    b) payers of incomes from wages, related to the incomes from wages paid to the taxpayers, which do not have the obligation to submit the statement provided in paragraph (2) and for which the declarative obligations are provided in Article 59;

    c) payers of incomes from the transfer of securities and from forward operations of sale-purchase of foreign currency, based on a contract, as well as any other similar operations, for which the tax on income is Paid-As-You-Earn.

CHAPTER XIV - Transitory and final provisions

ART. 94 - Transitory provisions

    (1) The exemptions from the payment of the income tax provided in the statutory instruments regarding certain protective measures as a result of collective lay-offs, for the personnel laid off, shall remain valid until the date when they expire.

    (2) The losses registered during the period of exemption by the taxpayers shall not be compensated with the incomes obtained from the other categories of incomes in such years and shall not be carried over, representing final losses of the taxpayers.

    (3) The provisions regarding the fulfilment of the condition provided in Article 40 (2), shall apply beginning with 1st January 2004.

    ART. 95

    Finalisation of taxation for the fiscal year

    (1) For the finalisation of the tax related to the income obtained in the fiscal year 2006, there shall be drawn up the necessary forms which are going to be approved by order of the ministry of public finance.

    (2) For the finalisation of the tax related to the income obtained in a fiscal year, there shall be drawn up the necessary forms which are going to be approved by order of the president of the National Agency of Tax Administration.

ART. 96 *** Repealed

ART. 97 *** Repealed

ART. 98 *** Repealed

ART. 99 *** Repealed

ART. 100 *** Repealed

ART. 101 *** Repealed

ART. 102 *** Repealed