Individual investors made 1.5 billion euros from the sale of listed or unlisted shares last year, 450 million euros from interest payments and 250 million euros from the sale of land and buildings, according to the Finance Ministry.
The Finance Ministry has finished calculating the taxes due for the sale of shares, for banking interests and for the property transfers in 2005, having discovered that the budget estimates were exceeded by far.
Revenues from the tax on stock transfers were estimated at some 8 million euros and actually amounted to 15 million euros, while those from interest tax were estimated at 10 million euros and actually reached 15 million euros.
"This means the Romanian economy is going well. This is a large amount," commented Gabriel Sincu, a lawyer with the legal and tax consultancy firm Haarman and Hammelrath.
Revenues from the tax newly introduced as of June 1, 2005, namely the tax on the income made from the transfers of personal real estate property (the tax on the sale of buildings), amounted to 25 million euros, against a budget estimate of 14 million euros.
The value of the gains was calculated in line with the rates in operation: 1% tax on share transfers, 1% tax on interests until June 1, 2005 and 10% after that date, and 10% for real estate transactions.
Analysts estimate the bulk of the gains made from the sale of shares, namely a figure of at least 1 billion euros, come from the sale of shares that are not listed on the Bucharest Stock Exchange, that is, in private businesses developed by individuals.
"It is obvious the mergers & acquisitions market has become a real market in Romania," said Gabriel Biris, a lawyer with the law firm Salans.
Indeed, last year was the best since 1990 in terms of mergers and acquisitions, involving Connex-Vodafone, Astral-UPC, Banca Ion Tiriac-HVB, Siveco-Intel, and Omniasig-Wiener Staedtische. Even though companies are generally involved in such transactions, there were also some individuals that stood to gain a lot of money from takeovers.
For instance, businessman Marius Ivan, who sold 40% in the paint producer DŸfa to investment fund Advent International, himself collected 7 million euros from this deal.
The biggest deal on the telecom market last year (Astral-UPC, 400 million dollars), saw those that controlled the company, Horia Ciorcila and other individuals from Cluj, selling shares in their own names.
Constantin Toma, Omniasig manager, personally sold shares in Omniasig worth more than 4 million euros.
The tax on gains from the sale of unlisted shares is calculated as a difference between the sale price (as stated in the sale contract) and the par value of the shares.
Since the par value usually amounts to a few hundred RON (several million ROL), as these are businesses that started five or maybe ten years ago, the value of the transaction can be considered equal to the value of the gain.
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