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Romania

Leaua & Asociatii

Str.Zborului nr. 10 A,
Sector 3,
cod 030595
Bucuresti

Main Contact: Crenguta Leaua
T: +4031 405 43 04 /+ 4021 312 55 13
F: +4021 312 55 12
E: [email protected]
W: www.leaua.ro

Do tax authorities assess taxes, duties, or other impositions in connection with any of the following events and, if so, at what rates and under what circumstances?

Sales Tax

Sales of Aircraft and lease rentals

The operation of aviation companies are subject to tax on profit (16%), but it is allowed tax deductible accruals created for expenses with the maintenance and repairing of the aircraft and related components in accordance with the programs for maintaining the aircraft approved accordingly by the Romanian Civil Aeronautical Authority. Therefore there is no special tax but the income obtained from aircraft sale/ lease is taken into consideration when assessing the overall profit subject to 16% tax on profit.

Generally, the sale/ leasing are subject to VAT (20%) applied as follows:

  1. For domestic operations,
  2. An operation placed in Romania, in accordance with Romanian Fiscal Code or other fiscal treaties shall be considered taxable if it is an intra-community acquisition of new transportation means, including aircrafts, made against payment, by any person.
  3. For importation of aircrafts.
  4. There are exempted from VAT the following operations related to the aircrafts used by aviation companies who are mainly performing international transportation of persons and/or goods against payment:
    1. delivery, modification, repairing, maintenance, leasing, rental of aircrafts, as well as delivery, leasing, rental, repairing and maintenance of equipments incorporated or used on the aircraft;
    2. delivery of fuels and supplies for using on the aircrafts;
    3. services provided for direct needs of aircrafts and/ or their load.

Use

Generally – No.

Finance (mortgage tax, promissory note tax, conditional sale tax, tax on loan payments, tax on interest)

Mortgage tax – No

Promissory note – No

Conditional Sales tax – No

Taxes of loan payments and taxes on interest:

The interest is taken into consideration when assessing the tax on profit. No VAT applicable on financial operations. For companies resident outside Romania withholding taxes may apply.

Lease (Tax on payments other than income)

Generally, the lease rentals are taken into consideration when calculating tax on profits.

Regarding VAT there are certain exemptions provided by the Romanian Fiscal Code, listed above. If a certain transaction is or not subject to such exemption depends on the actual circumstances.

Withholding taxes

Subject to circumstances, withholding tax will apply to non-resident lessors either on interest portion of rental payments or on rental payments, depending on type of lease (financial or operational), in accordance with double taxation treaties or Romanian Fiscal Code when the lessor is not resident in a country which signed a double taxation treaty with Romania.

Import taxes

Not for Civil Aircraft.

Export taxes

Not applicable.

Registration taxes

Administrative taxes paid to Romanian Civil Aeronautical Authority when registering/ de-registering an aircraft.

Luxury taxes

Yes, for fuels. There are exempted for excises:

  1. products used as fuels for aviation purposes, except for those which are used for touristic aviation or private flights.
  2. fuels for engine used in the field of production, development, testing and maintenance of aircrafts and ships.

FOR FURTHER INFORMATION: Please contact us and we would be pleased to assist.

DISCLAIMER: The above information should not be relied upon by the reader for legal advice as it is intended merely to serve as preliminary guide to the laws and regulations governing the taxation of aviation and aircraft in Romania, merely as an example. Aircraft owners or companies operating aircrafts in Romania must take into consideration all circumstances of the operation they intend to perform in order to identify the fiscal regime applicable to that specific situation and seek for specific fiscal advice. The information intends to provide summary-level information about certain tax issues affecting general aviation and aircraft finance. Since these materials are general in nature, readers are encouraged to obtain legal and tax advice from their own professional legal and tax counsel based on specific facts and circumstances regarding their acquisition and/or use of aviation and aircraft.