BUCHAREST -- Romania is set to award new tax breaks to carmaker Dacia, owned by France's Renault, to make up for the cancellation of profit tax exemptions to align with European Union state aid rules, officials said on Tuesday.
Romania's parliament approved the exemptions from customs and value added tax for Dacia's imports and local acquisitions, to compensate for the scrapping of profit tax exemptions that would have run for nine months from the start of 2007, daily newspaper Bursa said.
Parliamentary officials confirmed that the legislation was approved last week.
The paper said the new incentives will be given if Renault, which bought the Romanian carmaker in a 1999 deal, makes a minimum new investment of 300 million euros ($391.2 million) in Dacia by 2007. Romania, which aims to join the European Union in that year, has yet to close three areas of negotiation, including the thorny competition chapter, to conclude EU entry talks.
Renault overhauled the Dacia plant to provide the backbone of its planned exports to emerging markets.