In response to the context created by the COVID-19 epidemic, two key tax measures have been adopted by the Romanian Government and enacted through GEO 29/2020.
1. All tax obligations which have their due date after 21 March 2020 and which are unpaid do not qualify as overdue, and therefore they are not subject to late payment interest and penalties.
2. All tax related foreclosure procedures involving garnishments are suspended by law.
Both measures cease to produce effect 30 days from the end of the state of emergency situation, declared by the Romanian state as of 16 March 2020.
The same ordinance provides for deferral of the payment deadline of local taxes such as taxes for buildings, land, and vehicles from 31 March 2020 to 30 June 2020, while the reduction of up to 10% for full payment granted by local councils is still applicable.
Government Emergency Ordinance no. 29/2020 on economic and fiscal measures (GEO no 29/2020) was published in the Official Journal of Romania no.230 of 21 March 2020, and entered into force as of that day.
We present below all fiscal measures introduced by this ordinance. Economic measures and any other regulations concerning the Romanian business environment will be the subject of a separate KPMG newsflash.
By derogation from the Romanian Fiscal Code and Fiscal Procedure Code, GEO 29/2020 introduces the following tax measures:
Tax obligations which have their due date after 21 March 2020 and unpaid – exempted from the late payment interest and penalities which are normally imposed
The ordinance provides that for any tax obligations which have their due date after 21 March 2020 and are not paid for up to 30 days after the end of the state of emergency period, taxpayers will not be liable to pay late payment interest and penalties. It is also stated that these obligations will not qualify as overdue/outstanding and thus none of the related legal consequences will be applicable (such as restriction of access to public acquisition tenders).
On 16 March 2020, the date of introduction of the state of emergency in Romania, the Romanian tax administration (ANAF) announced publicly as a measure to be enacted the deferral of the deadline for tax obligations due on 25 March 2020 to 25 April 2020. This measure was not adopted by the Government. However, in a press release issued on 21 March 2020, the Ministry of Finance and ANAF have assured taxpayers that in any exceptional cases where solid arguments are presented, a delay in filing declarations will be treated with the clemency allowed by law.
Tax foreclosure procedures involving garnishments are suspended or will not be initiated
This provisions excludes procedures on tax receivables established by decisions in criminal proceedings.
All foreclosure proceedings involving garnishments are suspended by the effect of the law, and credit institutions as well as other parties required to enforce them will apply the suspension directly, with no other formalities being necessary from the tax administration.
The suspension measure ceases to produce effects after 30 days from the end of the state of emergency situation declared by the Romanian state.
Local taxes – deferral of payment deadline until 30 June 2020
For the year 2020, the deadline for payment of the first of the two equal installments for the tax on buildings, land and on vehicles, which would normally have been due on 31 March 2020, has been deferred to 30 June 2020. If a full payment is made on this date, the reduction of up to 10% granted by local councils to taxpayers who pay the whole amount due in one installment by the earlier deadline, is still applicable.
Other tax measures
For all quarters of 2020, taxpayers who make, either by law or by option, advanced quarterly payments of corporate income tax by reference to the corporate income tax level of the previous year (2019) are allowed, by exception, to calculate, declare and pay quarterly corporate income tax at the level of the actual profit of 2020. This measure is also applicable to taxpayers with a fiscal year different from the calendar year, in 2020.
Tax restructuring and relief measures for overdue tax obligation as at 31 December 2018 which were enacted by GO 6/2019 remain applicable if the taxpayers who want to access the measures submit notifications of intent by 31 July 2020 (the deadline before deferral was 31 March 2020) and then submit the application for restructuring measures by 30 October 2020 (the deadline before deferral was 31 July 2020).
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