The law modifying the Fiscal Code, which came into effect on June 4th 2005, has again attracted the attention of investors on the Stock Exchange, of businessmen and consultants, after Premier Calin Popescu-Tariceanu announced nothing more would be changed after January 1st, 2006. As a matter of fact, it was on the basis of this law that the budget for next year was built.

After months during which the website of the Ministry of Public Finances has hosted various Code amendment formulas for public debate, the regulations set early this summer will remain unchanged.

In a nutshell, the process of taxing the various income categories at a flat rate of 16% is taken further, only the application method differs from the intentions the Finances had made public. The 16% tax will be levied on incomes from interest rates, gains from stock transactions, dividends and incomes from real estate transactions, with each category including a series of particular cases that are treated differently.

As a result, we''re witnessing a return of the complications related to the taxation of gains from stock transactions through the different applications of the 1% and 16% tax rates, depending on the period the respective stock is held over and the moment of sale. The Finance Ministry has indefinitely postponed its intentions to set the value a stock registers during the last trading day of 2005 as a reference price, while the Ministry is maintaining the preferential treatment of investments with a duration exceeding one year.

Investors on the Stock Exchange, as well as fund investors, may be tempted to abruptly change their strategy linked to the application of the new tax, causing turmoil on the market. Brokers say they are expecting a tense week on the Stock Exchange and some are afraid that by the end of the year the Finance Ministry may