Fiscal regime from the profit tax

point of view
Student:iirig Alina-Maria
Group: 649

Content of
project
Definition
Non-taxable incomes
Types of activities
Rules and steps for NGOs tax
computation
Accounting issues regarding NGOs

Definition

Non-governmental
organizations (NGOs) are:
legal persons (legal status)
that
are
created
by
individuals or legal entities
pursuing certain activities for
the public interest or in the
interest of local authorities
or, where applicable, their
private prerogatives.

Non taxable incomes

a) contributions and tuition fees of members;
b) contributions in cash or in kind by members and
supporters;
c) registration fees established by legislation;
d) income from visas, taxes and penalties sport or
participation in sports competitions and demonstrations;
e) donations and sponsorship money or goods received;
f) Dividend and interest earned on cash resulting from
exempt income;
g) income for which tax is due on shows;
h) the resources obtained from public funds or grants;
i) income from occasional activities such as fundraising events with participation fee, festivals,
raffles, conferences, used in social or professional purposes, according to their status;
j) exceptional income arising from disposal of tangible assets owned by nonprofit organizations
other than those that are or have been used in economic activity;
k) income from advertising and publicity, made public benefit nonprofit organizations, according
to the laws of organization and functioning of culture, scientific research, education, sports,
health, and the chambers of commerce and industry, trade unions and organizations employers.
l) amounts received as a result of failure to comply with that initiated the donation / sponsorship,
law, provided that those amounts be used by nonprofit organizations in the current year or in
future years to achieve their goals and objectives, according to the act incorporation or statutes,
if applicable;
m) income from compensation from insurance companies for damage to own tangible assets
other than those that are used in economic activity;
n) amounts received from the income tax owed by individuals, according to Title III.

Rules and steps for NGOs tax

computation
Identify nontaxable income;
Identify the non taxable part from
economic activities income;
Compute the total nontaxable
income as sum of the incomes
mentioned above;
Determin the taxable income as a
diffrence between total income and
total nontaxable income;
Compute the taxable profit
considering the following:
Establish the expenses incurred in
order to achieve taxable income.
Determin the amount of deductible
expenses.
Determin taxable profit as
difference between taxable income
and deductible expenses related to
taxable income.
Compute the profit tax by applying
16% to taxable profit.

Accounting issues
Double entry bookkeeping, using a specific account plan;
In the case of NGOs which undertakes both non-profit and economic
activities will be used in establishing the analytical accounts of the 2
types of activities.;
NGOs will prepare quarterly balance;
NGOs may be liable for VAT, VAT deduction will be made on a pro-rata;
NGO can have employees with individual employment contract or civil
agreement based collaboration;
NGOs will submit the following statements:
Statement 100 quarterly ( income tax relating to economic activity);
Statement 100 quarterly (declaration of salary tax for NGOs which in
the previous had maximum 3 employees);
Statement 100 - monthly for payroll tax declaration for NGOs if in the
previous year had more than 3 employees;
D101 - annually by 25th of March of the following year;
D112 - monthly or quarterly, for declaration of social contributions;
VAT returns for NGOs if are registered in VAT purposes (D300, D390,
D394, D392A) or D392B-if NGOs is not registered in VAT purposes;
Annual Financial Statements - until April 30 next year.

Practical example
A nonprofit organization
registered in the course of a
financial year:
a. non-taxable income (membership
fees and donations): 700,000 lei;
b. income from economic activities
70,000 lei;
c. Total expenses recorded during the
financial exercised is 65,000 lei, of
which 45,000 lei for economic
activities.
Compute the profit tax.

Revenues from economic activities

=70.000
Min (15.000 eur * 4,2 ron/eur, 10% *
700.000)=min(63.000, 70.000)= 63.000
ron
Taxable income from economic activities
= 70.000 63.000 = 7.000 ron
The percentage of taxable income in
total (ec. activities) =
7.000/70.000=10%
The amount of expenses from ec.
activities related to taxable income=
10% * 45.000 ron= 4.500 ron
Taxable profit = 7.000 4.500 = 2.500
ron
Profit tax = 16% * 2.500= 400 ron

Thanks for your attention!