Law project to tax personal wealth over 500.000 euros

Social-democrat deputy Mugurel Surupaceanu submitted with the Permanent Office of the Deputies’ Chamber a legal proposal to set up an annual dtuty of 0.5% affecting people net wealth over 500,000 euros, Romanian news agency Mediafax informs. According to the legislative initiative, the tax on wealth would be calculated considering the family’s wealth, including spouse and their underage children.

The tax aims to affect all wealth higher than 500,000 euros, considering the exchange rate from December 31 from the reference year, after deducting certain sums, according to the methodology featured in the enforcement norms.

What to tax?

The legislative initiative aims to tax real estate goods and properties, financial rights and values belonging to the individual, his/her spouse and their children (underage) in the case they administrate the individual’s goods.

The law project also sees that resident individuals should pay an annual duty for net patrimony owned in Romania and overseas, while non-residents pay for the net patrimony owned in Romania, on condition that the international convention addressing double taxation is respected.

The social category targeted by this law project will submit a declaration regarding the annual tax on their wealth by June 30 2010 at the local authority in the region where they reside. If voted, the tax will not consider furniture (unless antique), author’s rights, intellectual property rights, titles, treasury bonds, insurance contracts, rent, capitalised private pension, cars and agricultural equipments, as well as agricultural constructions.

The declaration and calculation procedures are to be set by methodological norms enforced by the Government. Other countries to tax wealth are:

• France – the state introduced the wealth solidarity tax for over 790,000 euros and with rates from 0.55% to 1.80%;

• Norway – the wealth tax is between 0.9% and 1.1%;

• Switzerland – the tax represents maximum 1% of the net actives;

• There’s a similar tax in Italy, Austria, Ireland, Denmark, Germany, the Netherlands, Luxembourg, Finland, Sweden and Spain, which decided to tax the incomes generated by patrimony elements.