Non-deductible expenses with acquisitions from non-cooperating tax jurisdictions.
As of January 1st, 2021, acquisitions from suppliers from non-cooperating tax jurisdictions will be considered as non-deductible expenses (included in Annex I and / or Annex II of the EU List of non-cooperating jurisdictions for tax purposes, published in the Official Journal of the European Union).
According to the new legislative changes, the non-cooperating jurisdictions include the following countries: Turkey, Morocco, Australia, Thailand.
Maximum caution is recommended for corporate tax-payers regarding the acquisitions from suppliers from non-cooperating tax jurisdictions, as these are reclassified as non-deductible expenses when calculating the corporate income tax as of January 1, 2021.
Profit tax-payers need to consider all the fiscal regulations with incidence upon the calculation of the profit tax, the resumption of income, the re-invoicing of certain expenses considered as fiscally non-deductible made on account of non-taxable income according to Art. 23 lit. d) of the Fiscal Code.
To the extent these expenses are re-invoiced to income, such income is non-taxable.
For more details regarding these legislative changes, please consult the attached presentation and/or contact us.
