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Changes to corporate and individual taxation enacted — Orbitax Tax News & Alerts

On 30 June 2008, Government Emergency Ordinance 91 was published in the Official Gazette No. 480 amending the Fiscal Code. The amendments enter into force as of 1 January 2009. The major changes are described below.

Withholding tax on dividends

The withholding tax rate on dividends distributed to non-resident companies will be reduced to 10% (currently 16%).

The amendment addresses the discrimination issues raised by the European Commission in a recent infringement procedure.

The participation condition in the text implementing the Parent-Subsidiary Directive 90/435/EEC will be reduced to 10% (currently 15%).

Loss carry-forward

The tax loss incurred as of 2009 can be carried forward for a period of 7 years (currently 5 years).

Interest income of individuals

Interest income of resident and non-resident individuals from government bonds and other debt instruments issued by the government (or government agencies) is tax exempt.