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Major modification of the Fiscal Code. A new derogation from the principle of fiscal predictability

As is known, the fiscal matter is governed by a series of principles, including that of the predictability of taxation, described in art. 3 letter e) of Law no. 227/2015 (Fiscal Code):

"e) the predictability of taxation ensures the stability of tax duties and mandatory contributions, for a period of time of at least one year, in which no changes can occur in the sense of increasing or introducing new taxes, duties and mandatory contributions."

Furthermore, art. 4 of the Fiscal Code lists a series of consequences of the principle of predictability:

- para. (1) establishes that the amendments and additions made to the fiscal legislation by law enter into force within a minimum of 6 months from publication in the Official Gazette of Romania, Part I;

- para. (2) establishes that the legal amendments having as object the introduction of new tax duties or mandatory contributions/increasing existing ones/eliminating or reducing existing tax facilities will enter into force starting from January 1 of each year and will remain unchanged at least during that year.

Until recently, only one exception was allowed from the rules enshrined in para. (1) and (2) of art. 4 of the Fiscal Code, respectively the hypothesis of the adoption of some fiscal changes "that arise from Romania's international commitments".

Through O.U.G. no. 74/2023, published in Official Gazette of Romania, Part I no. 850 of 20.09.2023, the Romanian government has introduced a new derogation from the principle of predictability of taxation, the new exception involving the hypothesis in which fiscal amendments/supplements are adopted "in extraordinary situations of excessive budget deficit procedure found according to the European Union treaties and the agreed subsidiary regulations at the European level".

Thus, art. 4 para. (4) of the Fiscal Code has, starting from 20.09.2023, the following form:

"(4) I make an exception from the provisions of para. (1) and (2) the changes arising from Romania's international commitments, as well as the changes and/or additions by which new taxes, fees or mandatory contributions are introduced, the existing ones are increased , existing facilities are eliminated or reduced, exclusively in extraordinary situations of excessive budget deficit procedure found according to European Union treaties and subsidiary regulations agreed at the European level."

In conclusion, we are witnessing a major change in tax legislation to the detriment of the taxpayer who, under the pretext of an excessive budget deficit, will be exposed to more severe taxation measures with immediate application, unpredictable, which raises serious constitutional issues.

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