Modifications from one day to the next of the Fiscal Code have generated confusion in the business sector, leaving local companies and foreign investors unsure as to how to adjust to the new rules. Many provisions are ambiguous and difficult to decipher even by tax experts, making it necessary to urgently adopt enforcement guidelines that would shed light on the unclarities. The latest modifications extend the scope of application of the 16% flat tax, raise the VAT to 24%, with new taxes and contributions levied on sole traders' revenues and on royalties. Instead of simplifying things, the modifications of the Fiscal Code bring about additional administrative obligations. In addition, the 2011 tax system is shrouded in doubt.
The modifications brought to the Fiscal Code are ambiguous both because they use terms not defined in the Fiscal Code or in any other law for that matter, as well as because of a lack of correlation with a series of other special regulations on social contributions, which makes them difficult to apply, say fiscal consultants.
An example to this effect is the use of the concept of "incomes of a professional nature", for which no definition is provided. This can potentially result in a wider scope of application for the various social contributions, in dissonance with primary legislation which regulates those respective social security systems and at odds with special laws instituting other systems of contributions for certain professional categories, explained Alexandru Reff, coordinating partner of Tax& Legal Deloitte.
"Some of those targeted by the law would as a result be bound to contribute more than once, sometimes without benefiting from any social service that goes with that contribution. Such is the case of lawyers, for instance, who already contribute to a system of their own, and of independent professionals in gener
