Luxury products to be exempted from excises in 2010

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The Romanian government has decided to repeal excise taxes on luxury goods beginning with January 1, 2010, most probably amid fears the European Commission might have launched infringement procedure against Romania for charging ad valorem excises (i.e. proportional to value, a percentage of the price).

Thus, within two weeks, beginning with January 1 more precisely, Romanians would be able to buy luxury products without paying the need to pay the special tax. Luxury products subject to excise taxes include furs, crystal products, gold/platinum jewelry, perfumes and weapons, other than for military use. In the same category were included the yachts and other cruise ships, with or without engine, engines exceeding 25 in HP, designed for yachts and other types cruise ships.

‘Starting on January 1, once with the implementation of the new measures, the Romanian consumer of luxury products will pay by 15-18 percent less for the gold and platinum jewelry’, Mihail Pacioianu, executive chairman of the Precious Metals and Precious and Semi-precious Stones Federation in Romania – Diamond Gold said, quoted by Cotidianul.

According to the fiscal code, the excises were established as percentage of the price for a series of products considered to be of luxury, such as natural furs (except for rabbit, sheep and goat furs), in the case of which the current excise stands at 45 percent, crystal-made products (15 percent), gold and platinum jewelry (10 percent), perfumers (35 percent, except for the eau de Cologne in the case of which the excise is 25 percent), weapons and sporting guns other than for military use (100 percent). After the amendment of the fiscal code, beginning with 2010, such ad valorem excises will be abolished.

‘Yachts will be sold in Romania for prices smaller by an average 7-9 percent’, said Remus Cristy Baisan, executive manager with the yacht company Black Sea Magic.
The elimination of the excises for the luxury products will be adopted in order to avoid the European Commission launching the infringement procedure against Romania.

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