In order to stimulate the improvement of companies' equity, Emergency Ordinance 153/2020 was published, which provides for the granting of percentage reductions in the payment of income or profit tax to companies that have positive equity, as follows:

    a) 2% reduction, if the equity presented in the annual financial statements, in the year for which the tax is due, is positive;

     b) if the adjusted equity registers an increase compared to the adjusted equity registered in the previous year and the condition in letter a is met, the reductions have the following values:

 We must note that here we are talking about adjusted equity, and not accounting equity, as used in point a).

 Adjusted equity includes the following elements: subscribed and paid-in share capital, equity accounts, capital premiums, legal, statutory reserve and other reserves constituted from profit and net result carried forward, not including revaluation reserves and the result of the current year.

 These provisions entered into force on 01.01.2021 and will apply for the calculation of profit/income tax. relating to the period 2021-2025.

 The procedure by which companies benefit from the facilities is as follows:

     a) for profit tax payers, the percentage related to the tax reduction is applied to the profit tax of the year in which the mentioned conditions are met, and the amount of the reduction is deducted from it in the annual profit tax return.

     b) for micro-enterprise income tax payers, the percentage of the tax reduction is applied to the tax due for the entire fiscal year. The amount of the reduction is deducted from the tax for the fourth quarter.

  To allow the calculation and application of these facilities through which companies can benefit from significant reductions in profit or income tax, the deadline for submitting declarations regarding these taxes is June 25, inclusive, of the following year.

 Tax incentives aimed at stimulating company capitalization may become inapplicable due to failure to meet the criteria for granting them. Now is the best time to analyze the company's equity and take the necessary measures to improve it, one of these measures being the contribution in kind.

  The in-kind contribution to a company's capital can consist of movable assets (machinery, equipment, materials, goods, etc.), immovable assets (land, buildings, installations, etc.) or intangible assets (goodwill, patents, etc.).

  The contribution can be made by transferring the ownership right or by transmitting the right of use. In both cases, the goods brought as a contribution in kind will have to be revalued by an authorized appraiser, and the value by which the share capital will be increased will be that recorded in the valuation report.

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