Amendments to the Fiscal Code

Law no. 76/2010 approving Government Emergency Ordinance no. 109/2009 amending the Fiscal Code has been published. Among the important amendments:

See: Official Gazette no. 307 dated 11 May 2010.

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Government Emergency Ordinance no. 50/2010 on credit agreements for consumers

Government Emergency Ordinance no. 50/2010 on credit agreements for consumers ("GEO no. 50/2010" or "Ordinance") has been published. GEO no. 50/2010 regulates the rights and obligations of consumers and creditors to the promotion, conclusion and performance of various credit agreements and transposes into national legislation the provisions of the European Parliament and the Council Directive 2008/48/EC dated 23 April 2008 on credit agreements for consumers and repeals Council Directive 87/102/EEC. This Ordinance applies to credit and financial leasing agreements, including credit agreements secured by mortgages or rights on immovable property as well as to credit agreements with the purpose of acquiring or retaining property rights over an existing or planned immovable property or the refurbishment, equipment, consolidation, rehabilitation, expansion or the increase of value of an immovable property, regardless of the total credit amount. The main provisions of the Ordinance relate to the following: • the obligation of the creditors, if the case, of the credit intermediaries, to communicate to the consumers prior to signing the credit agreement all the relevant information in a standard form, allowing consumers to

analyse and compare different offers in order to take an informed decision as well as the obligation

to provide explanations of the supplied information; • the creditors must assess the solvency of the consumer prior to the conclusion of the credit agreement on the basis of the requested information and consultation of the relevant database; • the access of creditors from other Member States, in order to assess consumer solvency, to databases managed by credit bureaus, for cross border credit; • the prohibition to charge an analysis fee if the credit is not granted or a fee for the cash deposit / withdrawal for the payment of the credit instalments; • variable interest is calculated according to the variation of reference indices such as EURIBOR / ROBOR / LIBOR / BNR reference interest rate and the lender may add a fixed margin to the variation; • the fees related to credit are limited to the following: the fee for credit management, early repayment fees, fees for insurance, if applicable, penalty fee for late payment and unique fee consumerdemanded services; • the early repayment fee is paid only in the case of a fixed rate interest, and it is limited to a maximum of 1% from the credit value early repaid if the time period of repayment and the agreed date for the termination of the credit is more than a year and it is 0.5% if this period is less than one year; • the early repayment fee is eliminated in the following three cases: the reimbursement was made following the execution of an insurance contract with the purpose of ensuring the risk of default, the credit facilities granted in the form of "overdraft", repayment occurring in a time when the interest rate is variable; • the obligation of the creditors to provide the consumer a written proposal for the refinancing or restructuring of the credit, if the consumer can not accept the increase of the interest; • the possibility of withdrawal of the consumer from the credit agreement within 14 calendar days from the conclusion date without any specific reasons; This ordinance applies both to new contracts and to contracts currently in progress. Creditors are required to adjust the ongoing contracts in conformity with the Ordinance within 90 days from the enforcement date of GEO no. 50/2010, by concluding addendums; the consumers’ failure to sign the addendums is considered as tacit acceptance. GEO no. 50/2010 enters into force on June 22nd, 2010. Upon entry into force of the Ordinance, Law no. 289/2004 on the legal regime for consumer credit agreements for consumers is repealed and Law 190/1999 is amended.

See: Official Gazette no. 323 /17.05.2010.

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Amendments to Company Law no. 31/1990, republished, by Government Ordinance on fighting tax evasion no. 54/2010

Government Ordinance no. 54/2010 on fighting tax evasion was published in the Romanian Official Gazette, Part I, no. 421 dated 23 June 2010 (“Ordinance 54/2010”). The amendments to Company Law no. 31/1990 brought by Ordinance 54/2010 refer to: 􀂃 articles of incorporation. The notary public authenticating a company’s articles of incorporation or the person signing the certified date to it will not proceed with the request if proof of the firm’s availability issued by the Trade Registry as well as the affidavit regarding the capacity as sole shareholder in a sole limited liability company are not made available; 􀂃 the formalities regarding the registration of a company and the change of the company’s headoffice will be carried out only based on: (i) the document attesting the usage right over the head-office as submitted to the relevant fiscal authority in whose district the head-office is located, (ii) proof that the usage right over the head-office was not in any way assigned, (iii) affidavit regarding the observance of the legal provisions for cases where the usage right over the headoffice is assigned; 􀂃 number of companies which can operate in a building may not exceed the number of rooms or separate partitions obtained through a splitting process; 􀂃 the transfer of shares approved by a meeting of shareholders has to be submitted within a 15-day term to the Trade Registry so as to be mentioned in the registry and to be published in the Official Gazette. A company’s creditors and / or any other persons harmed by such a decision may submit opposition in order to receive appropriate compensation for the damage incurred and to engage the civil liability of the assignor. A transfer of shares will be effective only upon (i) the expiry of the 30-

day term if no opposition is submitted, or (ii) the date of notification of the decision rejecting the opposition. See: Romanian Official Gazette, Part I, no. 421 dated 23 June 2010.

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New VAT rate applicable from 1 July 2010

Government Emergency Ordinance no. 58/2010 amending the Fiscal Code has been published. Further to the Ordinance, from 1 July 2010 the standard rate of VAT has been increased to 24%. Please note that the current reduced VAT rates (i.e. 5% and 9%) remain the same and are applicable to supplies of certain goods and services as before. See: Official Gazette of Romania No. 431/28.06.2010.

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Measures to combat tax evasion

Government Emergency Ordinance no. 54/2010 (“the Ordinance”) was published on 23 June 2010, amending the Fiscal Code with measures intended to combat tax evasion. The Ordinance has a number of important changes in the areas of VAT, Excise and Customs as further outlined below. VAT Among the most significant changes relating to VAT: The Registry of intra-community operators • As of 1 August 2010, those engaged in intra-community operations with goods and services will have the obligation to register in “the Registry of Intra-community Operators”; • In case they are not so registered, their registration code for VAT purposes will not be considered valid (after 1 August 2010) for intracommunity operations; • Companies already performing intra-community operations that are already registered for VAT purposes will need to submit a request for registration in the Registry of Intra-community Operators by 1 August 2010. The request will be granted immediately and be effective as of the date the related decision is communicated, according to the Fiscal Procedural Code; • Going forward, companies that register for VAT purposes

in Romania will have to submit a request for registration in the Registry of Intra-community Operators at the time of VAT registration, which then has to be solved in ten calendar days. • The registration will be made based on requests and the relevant documents, as established by order of the President of National Agency for Fiscal Administration no 2101/2010, published in the Official Journal no 429/25.06.2010. Furthermore, will also include details on the administrators’ and shareholders’ criminal records (stock companies will not include the shareholders’ criminal records); • Those not registered for VAT purposes, as well as those associated with criminal activities and/or crimes regarding intracommunity operations will be prohibited from registering in the Registry of Intra-community Operators; • Performing intra-community operations without a registration in the Registry of Intra-community Operators will be sanctioned with fines of between RON 1,000 - 5,000. Reverse charge for certain products • The reverse charge is being introduced for local delivery of goods between companies registered for VAT purposes in Romania, for the following categories of goods: - cereals and industrial plants; - vegetables and fruits; - meat; - sugar; - flour, bread and bakery products; • The above measures on reverse charge apply from the tenth day following the communication of approval of the measures from the European Council, and will remain in effect until 31December 2011. The date of communication of the approval will be considered the date it is published on the official site of the Ministry of Public Finance. Excise Among the most significant changes regarding excise: Authorisation • Excise goods may be placed without excise duty payment for storage within tax warehouses, only in the following situations: - Up to eight storage warehouses for each warehouse keeper authorised for the production of energy

products (and their related parties); - in the airport area only for refuelling aircraft based on the certificates issued by the competent authority; - up to two warehouses for each warehouse keeper authorised for the production of cigarettes that have a market share greater than 5% (and their related parties); • While the current authorisations for tax warehouses remain in force until 1 September 2010, as of 25 June 2010 the transport of excise goods without excise duty payment to such destinations on the Romanian territory is forbidden, except for the cases presented above; • Tax warehouse authorisations will be valid for a period of three years for large and medium  taxpayers and for one year for other taxpayers. Relicensing may be required at least 60 days prior to meeting the above period; • Where at the entry into force of the Ordinance the authorisations held by authorised warehouse keepers exceed the period mentioned above, relicensing will be required by 31 August 2010; • Before 31 August 2010, tax warehouse keepers have to pay outstanding tax obligations older than 60 days • After 31 August 2010, tax liabilities that remain unpaid for more than 60 days will lead to the revocation of the tax warehouse authorisation; • Authorised tax warehouse keepers, including those whose license was cancelled or revoked, may assign tangible assets directly involved in the production / storage of excise goods only after paying all the tax obligations or submitting a letter of bank guarantee for the outstanding amounts;

• The assignment or the conveyance of the shares of the tax warehouse keeper must be reported within 60 days prior to the carrying out of such operations. Guarantees • Before 31 August 2010, mandatory guarantees should  be established both for the production / processing / storage, as well as movement of excise goods without excise duty payment; • Currently authorised tax warehouses must submit a guarantee of 6% of the value of the excise duty related to last year’s supplies of excise goods, but not less than 6% of the excise duty for the products estimated to be obtained for the next year based on the production capacities; • New tax warehouses will submit a guarantee of 6% of the excise duty for the products estimated to be obtained for the next year based on the production capacities; • Any tax liabilities overdue by more than 30 days should also be covered by the guarantees; New excise duty rates • As of 1 July 2010 there will be an increase in the excise duty for: - still fermented beverages other than beer and wine, from 0 euro / hl to 100 euro / hl per product; - intermediate products, from 65 to 165 euro / hl per product; - cigarettes, from 91% to 96% on the minimum level. Duty-free Regime • Owners of duty-free shops will pay customs duties, VAT and excises duties, if the case, and can apply for refund afterwards; • Currently authorised duty-free shops may function for a maximum of five years and no new authorisations will be released after the Ordinance is enacted; • An annual tax of EUR 100,000 must be paid in advance for the following year (no later than 10 calendar days from the end of the ongoing year); Customs provisions • The following are considered smuggling offences: - taking in or out of the country, through customs control points and without placing under a customs regime excise goods exceeding RON 20,000 or other goods exceeding RON 40,000; - taking in or out of the country, twice a year, through customs control points and without placing under a customs regime excise goods with a maximum value of RON 20,000 or other goods with a maximum value of RON 40,000 - sale of goods placed under customs transit arrangement; - collection, ownership, production, transport, take over, storage and sale of smuggled goods or of goods destined to commitment of smuggling. See: Official Gazette No. 421/23.06.2010.

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Amendments brought by Ordinance no. 92/2003 on the Tax Procedure Code, by the provisions of Government Emergency Ordinance no. 54/2010 regarding certain measures to fight tax evasion

Government Emergency Ordinance no. 54/2010 regarding measures to fight tax evasion was published on 23 June 2010 in the Official Journal (the “Ordinance”). The Ordinance makes a series of amendments to Government Ordinance no. 92/2003 on the Tax Procedure Code (the ”Tax Procedure Code”), the most significant of which are outlined below. 1. Regulation of the joint liability of persons other than those primarily liable as such under the previous tax procedure legislation • The following persons, in addition to those previously mentioned as being liable for tax

payments, will be jointly liable with the main debtor: - partners in partnerships without legal personality, including family enterprise members, for the tax obligations incumbent on these, in the conditions set forth in art. 20, as well as legal representatives who have in bad-faith caused the failure to file tax returns and / or to meet the tax obligations; - garnishees, up to the amount obtained from setting up the garnishment. • The following other persons are added as those also liable, jointly with a debtor declared bankrupt, for the latter’s payment obligations: - directors who, during the exercise of their mandate, have failed to meet their legal obligation to request that the court of jurisdiction and venue open insolvency proceedings for tax obligations related to the period in question, to the extent those taxes remained unpaid at the date of declaration of insolvency status; - directors or any other persons who have in badfaith caused the failure to file tax returns and / or to meet tax obligations; - directors or other persons who have in bad faith caused the debtor to receive an undue refund from the general consolidated budget. 2. Regulation for credit institutions to provide information • An obligation is introduced for credit institutions to notify the tax bodies of the National Agency for Tax Administration (ANAF), at their request, of all the rollovers and / or balances of accounts opened by a debtor with these institutions, the identification

data of the persons holding signature rights, as well as whether the debtor has rented any safety deposit boxes. The request is to be made in relation to each individual account holder, and the information thus obtained is to be used by ANAF solely for the purposes of fulfilling their specific duties.  3. Regulation of certain aspects on cooperation of the tax authorities and collection of evidence in criminal proceedings • The provisions of art. 94 art. 4 were repealed. This means that inspectors are now entitled during a tax inspection to make technical findings as requested by the criminal prosecution bodies, for the purposes of supporting certain deeds or occurrences of cases on the agenda of these institutions. • A provision also allows for the minutes prepared by the tax authorities to constitute evidence if they document deeds that might be deemed as criminal offence, under the conditions of the Criminal Procedure Code. • Regulations are provided for collaboration between the tax authorities and the criminal prosecution bodies, if there is justified data or indications pointing to the preparation or perpetration of a criminal offense targeting the goods set forth in art. 135 art. (4) of Law no. 571/2003. 4. Introduction of certain rules relating to perishable and / or degradable goods • A new method is introduced for dealing with perishable and / or degradable goods subject to seisure, consisting of their urgent sale. • Perishable or degradable goods previously subject to seizure which are to be sold urgently are to be appraised and sold by tax bodies, at the market prices. 5. Regulation of certain issues relating to the contravention regime of operations regulated by the tax law • The performance of intra- Community operations by persons obligated to register themselves with the Intra-Community Operators Register are deemed in contravention to the law if they are not so registered, and are to be penalized with fines between RON 1,000 to RON 5,000. • No longer included in the sphere of contravention deeds are the usage of mobile pipes, elastic hoses or other similar conduits, the usage of uncalibrated containers, as well as the placement of channels or taps in front of the metres, via which unmetered quantities of alcohol or distilled spirits can be extracted. See: Official Journal of Romania, Part I, n. 421 of 23 June 2010.

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Changes regarding the input VAT deferment certificate

Order no. 1889/2010 amending the Methodological Norms for VAT, has been published. According to the Order, for importers that exceed the necessary threshold for obtaining a VAT deferment certificate the period taken into consideration for calculating the value of imports has changed, from the previous calendar year to the last 12 consecutive months. The value of the threshold for imports, namely RON 150 million, remains unchanged. See: Official Gazette of Romania No. 436/29.06.2010.

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Amendments to the Fiscal Code

Government Emergency Ordinance no. 58/2010 amending and supplementing the Fiscal Code (the “Ordinance”) was published on 28 June 2010. The provisions of the Ordinance become effective on 1 July 2010. Some of the more significant changes are outlined below. Taxation of professional income Any professional income, other than salary income, is deemed taxable. For such income, individual social security, health fund and unemployment fund contributions are due. The reference amount for the calculation of these contributions is capped at five average gross salaries in Romania. The income payer has the obligation to withhold and pay the contributions. Classification of activity as dependent or independent Activities can be reclassified as dependent activities, provided that at least one of the following criteria is met: - the beneficiary of the income is subordinated to the income payer or the latter’s management; - the income beneficiary uses the material resources of the income payer in order to carry out his / her activity; - the income beneficiary contributes only physical work or intellectual capacity but not his / her own capital; - the income payer covers the travel expenses of the income beneficiary (daily allowance); - the payer of the income covers the annual holiday and temporary work inability allowances of the income beneficiary; - any other elements which reflect the dependent nature of the activity. If an activity qualifies as a dependent activity, the income tax and mandatory social security contributions will be recalculated and due jointly by the income payer and income beneficiary. The rules for determining the tax on income derived from salaries outside the main position apply. The definition of copyright and related rights is stipulated. Foreign tax issues Tax credits may be obtained in Romania for taxes paid to a foreign state only if the Double Tax Treaty concluded between Romania and the foreign state applies, and only if documentation is available proving that the taxes were paid in the foreign state concerned. Any loss incurred by a permanent establishment of a Romanian company located in a non-EU / EFTA member state or in a country which does not have a Double Tax Treaty in place with Romania is only deductible for tax purposes from the revenues derived by that permanent establishment abroad. Personal income tax The annual net income from independent activities determined based on income norms cannot be lower than 12 times the national minimum gross wage. The presumptive quota for deductible expenses is lowered from 40% to 20% of the gross income derived from intellectual property rights, and to 25% from 50% of the gross income derived from the creation of monumental artwork. The following items will from now on become taxable benefits (part of salary): - meal tickets - gift vouchers - nursery tickets - holiday tickets - severance payments. Meal and holiday tickets are still exempted from payment of mandatory social security contributions. Interest income from deposits, regardless of the deposit type, derived starting 1 July 2010 will be subject to the 16% tax rate,  with the tax being final. Net gains and losses from transactions in securities, other than shares and transferable securities in the case of closed companies, will be reportable on a quarterly net basis, and subject to 16% tax. The taxpayer has the obligation to fill in a statement, calculate and make quarterly pre-payments by the twenty-fifth of the month following the end of each quarter. The gain derived from forward / futures operations involving foreign currency, other than those involving financial instruments traded on authorised markets, is subject to 16% tax, representing a prepayment for the annual tax due. The annual net losses resulting from trading securities, other than shares and transferable securities in the case of closed companies, declared in the annual tax return, can be carried forward for seven consecutive years. A 25% withholding tax rate will be levied on the net income from gambling, regardless of the level of the income. The income of non-residents carrying out dependent activities in Romania will be taxable according to the same laws applicable to residents, regardless of the period of their presence in Romania. New rules regarding the procedure  for granting tax credits are introduced. Tax on Romania-sourced income of non-residents. The following types of income are now taxable at 16%: - income from trading derivatives; - income from interest on sight deposits / current accounts; - income from interest on debt securities of Romanian companies that are traded on a regulated financial market; - Romania-sourced income of non-residents who provide professional or technical assistance and other similar

services, within the contracts financed by a loan, credit or other financial agreement between international financial bodies and the Romanian state or Romanian legal persons, including public authorities, guaranteed by the Romanian state; - income from interest on savings, derived in Romania by individuals resident in other EU member states; - income from interest on time deposits / saving instruments, derived from Romania by individuals resident in states other than those of the European Union. Income from gambling derived by non-residents will be subject to the

same 25% tax rate as applied to residents. The methodological norms on the implementation of this Ordinance will be prepared within 30 days of the publication of the Ordinance. See: Official Gazette no. 431/28.06.2010.

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Amendments to Competition Law no. 21/1996 under Emergency Governmental Ordinance no. 75/2010

Competition law no. 21/1996 (“Competition Law”) has been materially amended, both in terms of substance and procedure, by Emergency Governmental Ordinance no. 75/2010 (“EGO 75/2010”), which was recently published in the Official Gazette. The amendments will take effect within 30 days of publication, i.e. on 4 August 2010, and will govern the procedure applicable to ongoing investigations by the Competition Council. The major changes to Competition Law include: Amendments relating to practices and thresholds 􀂃 The practices covered by art. 5 and 6 of Competition Law will no longer qualify for block exemption under the Romanian Regulations, but under the EC Regulations. 􀂃 EGO 75/2010 confirms the Competition Council’s possibility to avail itself of art. 101 and 102 of the Treaty on the Functioning of the European Union. 􀂃 EGO 75/2010 institutes the presumption that one or more undertakings is / are not in a dominant position if its / their market share / aggregate market shares on the relevant market in the period under review does / do not exceed 40%. 􀂃 The market share thresholds below which art. 5(1) of Competition Law does not apply have been raised: (i) from 5% to 10% for agreements between competitors or potential competitors (aggregate market share of the parties) and (ii) from 10% to a market share of 15% for each of the parties to agreements between non-competitors. If it cannot be easily determined whether the parties to an agreement are competitors or potential competitors, the applicable threshold is 10%. 􀂃 If competition on a relevant market is restricted by the cumulative effect of agreements to sell goods or services in place with different suppliers or distributors, a 5% threshold will be taken into account for both competitors and non-competitors. 􀂃 Bid-rigging no longer constitutes an infringement per se. Amendments relating to economic concentrations 􀂃 Apparently, stricter standards may apply for the clearance of economic concentrations: a concentration which would significantly impede effective competition in the common market or in a

substantial part of it, in particular as a result of the creation or strengthening of a dominant position is to be prohibited. Amendments relating to authorisation fee, procedural matters and sanctions 􀂃 The authorisation fee has been reduced from 0.1% to 0.04% of the aggregate turnovers generated in Romania by the undertakings concerned and is now capped at EUR 100,000. 􀂃 EUG 75/2010 confirms a principle acknowledged at EU level: communications between the investigated undertaking and its legal counsel for the purpose of exercising its right of defence may not be taken away or used as evidence during the Competition Council’s procedures, if relating to the scope of the investigation. Documents prepared by the investigated undertaking exclusively with the aim of exercising its right of defence may not be collected or used as evidence even if not sent to the legal counsel and even if not prepared with the aim of being physically sent to a lawyer. 􀂃 Throughout investigations into alleged anti-competitive practices, the investigated undertakings may submit to the Competition Council their proposed commitments designed to reverse the situation which resulted in the opening of the investigation. The Competition Council may, by decision, make those commitments binding on the relevant undertakings. 􀂃 In cases of urgency due to the risk of serious and irreparable damage to competition, the Competition Council, on the basis of a prima facie finding of expressly banned anticompetitive deeds which need to be terminated without delay may order interim measures. 􀂃 In respect of Competition Council decisions challenged in court, the court may order, upon request, the suspension of the challenged decision, subject to the applicant posting security accounting for 30% of the fine imposed under the challenged decision. D&B is of the opinion that this provision on the posting of security may be challenged as an infringement of the Constitution. 􀂃 If the central or local public authorities or institutions fail to comply, within the time-limit prescribed, with the measures instructed by the Competition Council to restore the competitive environment, the Competition Council may institute administrative proceedings before the Bucharest Court of Appeal, seeking the annulment of the act restricting, preventing or distorting competition and moving for the relevant authority to issue an administrative act or to carry out a certain administrative operation. 􀂃 The Competition Council may file for administrative litigation within six months of the passing of the period in which the central or local public authority should have complied with the measures required to restore a normal competitive environment. See: Romanian Official Gazette, Part I, no. 459 dated 6 July 2010.

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Increase on building tax and vehicle tax

Government Emergency Ordinance no. 59/2010 amending the Fiscal Code has been published. Further to the Ordinance, from 1 July 2010 the property tax due by individuals who possess more than one building will increase as follows:  by 65% for the first building owned besides the one of

Domicile  by 150% for the second building owned besides the one of domicile  by 300% for the third and additional building besides the one of domicile Individuals who own buildings obtained through inheritance are not subject to these provisions. In addition, the tax on vehicles owned by individuals or by legal persons will also increase from 1 July 2010. For the year 2010, the deadline for paying the additional building taxes is 31 December 2010. However, if individuals fully pay these tax liabilities before 30 September 2010, they will receive a bonus as agreed by the local councils. See: Official Gazette of Romania No. 442/30.06.2010.

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Amendments to Government Decision no. 1680/2008 on implementing a state aid scheme on ensuring sustainable economic growth

Government Decision no. 588/23.06.2010 amending Government Decision no. 1680/2008 on implementing a state aid scheme on ensuring sustainable economic growth (“GD 588/2010”) was published in Official Gazette no. 512/22.07.2010. The amendments brought to GD 588/2010 concern the main criteria upon which state aid is granted under Government Decision no. 1680/2008 and mainly refer to: • new eligibility thresholds in respect of the initial investment: (i) the value of the initial investment ranges between EURO 10 and 20 million, and creates at least 100 new jobs; (ii) the value of the initial investment ranges between EURO 20 and 30 million, and creates at least 200 new jobs; (iii) the value of the initial investment exceeds EURO 30 million and creates at least 300 new jobs; • specific requirement for the initial investment to be located within the same perimeter; • specific situations where the financing agreement terminates: (i) the undertaking does not start the investment project within the time limit mentioned in the investment plan; (ii) the undertaking does not finalise the investment project within the time limit mentioned in the investment plan. See: Romanian Official Gazette, Part I, no. 512/22.07.2010.

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Changes regarding the threshold for the issuance of input VAT deferment certificates

Order no. 1996/2010 amending the Methodological Norms for VAT has been published. The Order reduces the minimum threshold for importers wishing to obtain a VAT deferment certificate. It is now necessary to import a minimum of RON 100 million worth of goods in the last 12 months to qualify (formerly the threshold was RON 150 million). See: Official Gazette of Romania No. 517/26.07.2010.

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Electronic submission of the forms for the reimbursement of the VAT paid in other Member States

Order no. 2157 was issued by the President of the National Agency for Fiscal Administration (“ANAF”) on 6 July 2010 regulating the electronic submission of the forms for the reimbursement of the VAT paid in other Member States by taxable persons established in Romania. The forms should be submitted via the electronic portal provided by ANAF and will be signed based on a digital certificate issued by an accredited provider in accordance with the provisions of Law no. 455/2001

regarding the electronic signature. See: Official Gazette no. 478/13.07.2010.

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Amendments concerning the Environmental Fund

The Romanian Parliament has issued a new law amending required contributions to the Environmental Fund (“EF”). Some of the major changes are:  the introduction of a new tax of RON 2/litre levied on any shortfall of targeted waste recovery for industrial oils and lubricants placed on the market. The tax applies on the differences between the annual legal targets and the actual oil waste recovered;  from 1 January 2011 all producers of electric and electronic equipment will have to set up a guarantee deposit for the EF for equipment placed on the market;  the RON 1/kg tax for any shortfall of targeted waste recovery for tyres placed on the market is increased to RON 2/kg;  the 1% tax on timber sales is increased to 2%. The contribution is now due by operator or the owner of the forest;  the 2% tax on sales of dangerous substances placed on the market is now also due for substances used for medicines;  the RON 0.2/pcs ecotax which applies to shopping bags is decreased to RON 0.1/pcs. See: Law no. 167, dated 14 July 2010 published in the Official Gazette, Part I, no. 504/20 July 2010.

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New VAT return (form 300)

As a result of the recent increase in VAT rate, the VAT return template has been modified. More information on the VAT return template and content can be found by accessing the following link:

http://www.monitoruloficial.ro/R O/article--e-Monitor--339.html. See: Order no. 2245/2010 was published 3 August 2010 in Official Gazette No. 539/2010.

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OECD publishes revised guidelines on transfer pricing

On 22 July the OECD council approved the 2010 version of the Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“OECD Guidelines”). In the 2010 update chapters I – III have been revised and a new chapter IX has been added. The revision results in a series of major changes expected to have a global impact. The additional chapter IX addresses the transfer pricing aspects of business restructurings. Since Romanian transfer pricing legislation follows the OECD Guidelines, it is expected that the revised guidelines will also have a significant impact on the application of transfer pricing in Romania. Further details are provided below. Revised chapters I – III  The most important changes in Chapters I – III concern key areas related to the practical application of the OECD Guidelines: 1. Hierarchy of methods The distinction between traditional methods and profit-based methods has been removed. In principle, all the authorised OECD methods now rank equally. The basis for choosing one method over the others is now expressed as “finding the most appropriate method for a particular case”. 2. Standards of comparability The revised OECD Guidelines emphasise that comparability plays an imperative role in applying the arm’s length principle, especially when applying the transactional net margin method, the resale price method and the cost plus method. 3. TNMM and profit level indicators Following the new status of the transactional net margin method as an equally valid method, attention has been given to the selection of the profit level indicators. There is now clear guidance on the most common ones, such as the return on cost, return on sales and return on capital. 4. Profit split method Driven by the tighter approach to comparability, there might be an increased usage of the profit split method, or an increased interest from the tax authorities to use this method. Chapter IX The new Chapter IX deals with the transfer pricing aspects of business restructurings. The addition of this new chapter results from the OECD project on business restructurings, which benefited from significant input from the business community as well as non-OECD members. It addresses several major aspects of the taxation of internal business restructurings, such as: • Allocation and transfer of risk among related parties. • Whether and when internal business restructurings require arm’s length compensation and / or indemnification. • How transfer pricing rules should be applied to the parties following a restructuring. • Whether and when governments have the ability to disregard a taxpayer’s restructuring for the purposes of applying transfer pricing rules.

With thanks to PriceWaterhouseCoopers Romania – Tax Department (www.pwc.ro)

Amendments to the Methodological Norms relating to VAT and excise duties

Changes to the methodological norms applicable to VAT and excise duties became effective on 30 July 2010. The most significant changes are outlined below. VAT rate change • According to the general rule, the standard rate is the rate applicable at the moment of delivery of goods / provision of services. Consequently, amounts invoiced in advance for delivery of goods / provision of services rendered after 1 July 2010 must be settled at the new 24% VAT rate. The same treatment is applied for invoices issued for delivery of goods or provision of services for which the beneficiary is obliged to apply VAT based on the reverse charge mechanism; • Notwithstanding the general rule, the 24% VAT rate is also applied to: - Intra-community acquisitions of goods that were received in June 2010, where the related invoices were issued by the supplier in July 2010; - Invoices issued following a price change for a transaction, which took place before 1 July 2010, if it cannot be determined which was the underlying transaction; - Re-charges performed after 1 July 2010; - Invoices related to services settled based on work in progress reports, if these are issued by the provider or accepted by the beneficiary after 1 July 2010, irrespective of the date on which such services were rendered. Moreover, the settlement period cannot exceed one year; - Invoices for utilities, such as gas, electricity, water and telecommunications, issued after 1 July 2010; - Lease instalments whose payment date, according to the payment schedule, is in July 2010; - On-line services based on subscription, if the invoice is issued after 1 July 2010; Registry of Intra-Community Operators (”R.I.O”) • In order to register in R.I.O: - Limited liability companies and limited partnerships based in Romania have to make available clearance certificates of their administrators and associates; - Joint-stock companies and partnerships limited by shares based in

Romania have to make available only the administrator’s clearance certificate; - Public institutions and nonresident companies have to make available only the standard registration request; - The above mentioned clearance certificates are issued by the Romanian Police; Excise duties Authorisation • The request for tax warehouse re-authorisation must be registered with the local customs authority a maximum of 60 days before the validity of the authorisation expires; Tax warehouse arrangements • Only if certain conditions are met, energy products and cigarettes may  e stored under tax warehouse arrangement by tax warehouse keepers; • Additives and bio-fuel used exclusively for mixture may be stored under a tax warehouse arrangement; • Small producers of still wine who produce on average less than 1,000 hl annually do not fall under the tax warehouse arrangement;  • The market share held during the ongoing year by tax warehouse keepers authorised for the production of cigarettes is determined by the central tax authority by 31 January, based on the market share held during the previous year; • Tax warehouse keepers authorised for the production of cigarettes, whose market share falls below 5% will lose their storage authorisation; • In the event of changes in a company’s registered address, the authorised tax warehouse keeper is obliged to present confirmation of such changes to the central tax authority and the local customs authority within 30 days; • Authorised tax warehouse keepers, registered consignors or registered consignees are required to fill in the excise duty registration number in the identification data section of invoices; Guarantees • Guarantees in the form of mortgages are no longer accepted; • Newly-established storage tax warehouse keepers have to lodge a 6% guarantee applied to the value of excise duties related to excise goods estimated to be received annually; • Companies authorised as production and storage tax warehouse keepers / registered consignees have to lodge a guarantee for each type of authorisation held; • The authorised importer is obliged to lodge a 6% guarantee applied to the value of excise duties related to goods that are going to be imported annually; • The guarantee may be executed if the tax warehouse keeper has outstanding tax liabilities exceeding the deadline by more than 30 days; • The filing deadline for guarantees is increased from 15 to 30 days; Markings • For imports of excise goods unmarked by the foreign supplier, the markings acquired by importers are applied within customs warehouses, tax warehouses, free warehouses or free zones; Other provisions • Companies may use coal and coke for some purposes which are exempt from excise duty payment based on a notification registered with the local customs authority; as an exception, companies already authorised as end-users may use such products for the aforementioned purposes upon expiration of the validity of the authorisation; • Transitory measures were introduced for excise goods whose movement under excise duty suspension arrangement began prior to 26 June 2010; • Excise goods held by storage tax warehouses under excise duty suspension arrangement on 26 June 2010 may be transported under excise duty suspension arrangement until 1 September 2010, as follows: - From a storage tax warehouse to a production tax warehouse; - Between the storage tax warehouses of the same tax warehouse keeper. See: Government Decision no. 768/2010 for the amendment and completion of the Methodological Norms of Application of the Fiscal Code, published on 30 July 2010 in Official Gazette No. 534/30.07.2010.

With thanks to PriceWaterhouseCoopers Romania – Tax Department (www.pwc.ro)