According to Law no. 17/2014 on the regulation of the sale of agricultural land located outside a built-up area (Ro. extravilan), an 80% tax applies to the sale of such land if it is sold before the expiry of 8 years from its purchase.
In this context, the Ministry of Agriculture and Rural Development has issued and published Order 883/2023 in Official Gazette no. 93/02.02.2023 for approving the procedure for the calculation, collection, declaration and payment of the tax.
To supplement the above, the tax authorities have issued and published Order 216/2023 in Official Gazette no. 165/27.02.2023 for approving the procedure and related tax declarations for determining the tax on income gained from the sale of agricultural land located outside the built-up area and the sale of control packages (more than 50% of the shares/voting rights) of legal entities that own one or more plots of agricultural land located outside the built-up area.
The 80% tax is applicable to the difference between the value of the agricultural land at the date of sale and the date of purchase; these values are calculated for the relevant periods on the basis of the value established by an expertise drawn up by the Chamber of Public Notaries or, as the case may be, the minimum value established by a market study carried out by the Chambers of Public Notaries.
The tax is calculated and collected by the public notary before the authentication of the notarial deed of sale of the agricultural land and it is declared by the public notary by the 25th of the month following the month of sale.
The tax is also applicable in the case of the sale of the control package (more than 50% of the shares/voting rights) of legal entities that own – by purchase or by contribution in kind to the share capital – one or more agricultural lands located outside the built-up area and that represent more than 25% of the assets of the entity.
In this case, the seller must declare the tax to the competent tax authorities within 10 days from the date of transfer of the control package and pay the tax within 60 days from the date of issuance of the tax decision by the tax authorities.
If the transfer of ownership of the land is carried out based on a court decision, the court issuing the final court decision will communicate the decision and related documentation to the relevant tax authorities; thereafter the latter will issue a tax decision in the name of the seller.
The 80% tax is paid on top of the taxes due according to the Romanian Fiscal Code for the said transactions. At the same time, this tax is assessed as a non-deductible expense when calculating the profit tax in cases where the seller is liable to pay tax on its profits.
No tax is levied on the sale of agricultural land acquired by inheritance, partition or other legal acts of acquisition, except for sale agreements.
By Carmen Mazilu, Tax Advisor, Noerr