Cristina Fuioaga, PwC Romania: “Recent legislative changes encourage investments in research and development”

“The recent legislative changes were a positive element, which encouraged companies to apply more and more fiscal facilities in ​​research and development. I am referring to the new applicable legislative framework regarding the establishment of a new register of experts and the implementation of a new procedure regarding the expertise process for the application of the fiscal facilities currently existing in the fiscal code, for research and development activities.

A brief review. I am talking here about the additional deduction of 50 percent of eligible expenses when calculating the profit tax, which translates into a saving of almost 8 percent of the value of the investments, as a reduction from the final profit tax, but also the income tax exemption of 10 percent for employees working in research and development activities,” Cristina Fuioaga, Director, PwC Romania said at Automotive R&D Power Breakfast organized by Automotive Today.

“There was a lot of talk and we brought up the elements of creativity and novelty which are, perhaps, among the main criteria that must be met when we judge whether an activity qualifies as research and development and can lend itself to the application of the facility.

Regarding the new framework, the establishment of this register of experts is a beneficial measure from our point of view because it ensures more transparency and predictability. Basically, taxpayers are encouraged to apply because they have more comfort in the context of a possible tax inspection. I have even seen taxpayers apply this relief for the 10 percent income tax exemption area for employees working in R&D, even though it is only required to apply the additional 50 percent deduction in the calculation of corporate income tax.

Because that gave them more security and, as I said, predictability in the event of a tax audit that could check if the facility was correctly applied.

When we talk about standardization, there are also disadvantages and maybe many of you considered that the procedure is a bit too bureaucratic and maybe with some additional costs, but from our point of view the advantages of its application and the security it offers in the context of a tax inspection

they far exceed these things that, let’s say, could still be improved for the future.

In the area of ​​legislation, we saw that it is desired to encourage the business environment further to apply these facilities and to carry out the investments in this area of ​​research and development,

which are essential in ensuring competitiveness and in creating innovative products.”