Monday, February 20, 2023, 6:30 p.m
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Any agricultural land located in the outskirts of an administrative-territorial unit (UAT) cannot be sold in the same way as other goods (apartment, house, inner-city land, etc.), but must comply with certain special conditions stipulated by the 2014 Law, which has been amended repeatedly, with the most recent amendment coming into effect in February 2023.
As I mentioned in a previous article published in 2020, Romania has an agricultural area of approx. 14 million hectares of arable land representing the 6th place among the EU Member States
The reduced prices per hectare of agricultural land compared to other Member States determined that the sale of agricultural land located outside the city is one of the areas with the fastest development, especially in the area of speculative-investment sales.
Thus, the legal conditions under which the sale of agricultural land located outside the city can take place have seen a series of important changes adopted by the Law of 2020, among others by establishing much stricter pre-emption rights, as well as imposing a tax of 80% of the difference between the sale price and the purchase price in case of resale earlier than 8 years from the date of purchase.
Since the method of calculation, collection and payment, as well as the obligation to withhold, transfer and declare the aforementioned tax were not detailed in the 2020 Law, in practice the resale of agricultural land located outside the village earlier than 8 years from the date of purchase became impossible objectively.
In 2022, new changes took place by means of an Emergency Ordinance, which clarified the Law from 2020, establishing that the methodological rules for calculation, collection and payment, as well as the obligation to withhold, transfer and declare the tax to be adopted within for a maximum of 30 days.
But it was only in February 2023 that the procedure regarding the calculation, collection and payment of the tax, as well as the declaration obligations in the case of the sale of agricultural land located outside the city, was published.
Thus, this recently adopted procedure applies to the resale of agricultural land located outside the village less than 8 years after the date of purchase. The mentioned procedure regulates 3 types of transactions, namely: (i) sale contract by which the ownership of the land itself is alienated and which will be concluded in authentic form; (ii) contract of sale by which the so-called “controlling interest” is disposed of, for example where what is sold is not the agricultural land itself, but the shares or shares in the joint-stock company (SA) or with limited liability company (SRL) that owns the agricultural land; or (iii) by means of a court order.
In the first case, the tax is calculated and withheld by the notary public before the authentication of the sales contract, declared and paid as income to the state budget by the 25th of the month following the month in which the sale was concluded.
In the second scenario, the seller (natural or legal person) has the obligation to declare the tax within 10 days from the date of transfer to the competent central fiscal body. He has the obligation to pay the tax within 60 days from the date of notification of the tax decision.
In the third scenario, the court that issued the final decision will communicate the decision in question to the fiscal body within the jurisdiction of the court within 30 days from the date of the final decision.
About the author:
Dr. Daniel MOREANU is a lawyer representing top international and Romanian companies throughout his career. He currently coordinates the activity of MOREANU Law (www.moreanulaw.com) a dynamic law firm from Bucharest with extensive expertise in the following areas: Real Estate Law and REITs, Trusts and Trusts, Corporate Law and Insolvency, Mergers and Acquisitions, Litigation, Banking and Financing Law, Labor Law, Commercial Contracts, Data Protection with Personal Character and GDPR and National and International Heritage.
Daniel MOREANU is a Doctor of Law with the highest distinction, summa cum laudae, the author of a work that analyzes the institution of the Trust and the Trust, as well as numerous specialized articles in the legal and business press.
