Fiscal facilities granted during the state of emergency, through G.E.O. no. 33 / 2020
Fiscal facilities granted during the state of emergency
Through this new ordinance, the Government has granted bonuses for on time payment of the corporate income tax or the tax on the income of micro enterprises due for the first quarter of 2020.
The purpose of the facility is to support economic activity during the state of emergency, but also to increase the degree of collection of budgetary debts. In addition, the requirement to pay VAT on certain imports needed to combat the COVID-19 pandemic is postponed, and importers will apply the reverse charge system.
Bonuses granted for on time payment of profit tax or tax on the income of microenterprises due for the first quarter of 2020
In the Official Journal of Romania no. 260/2020 of 30 March 2020, Government Emergency Ordinance no. 33/2020 on some fiscal measures and the modification of some normative acts (the “Ordinance”) was published. The ordinance enters into force on the date of publication in the Official Journal of Romania, i.e. from 30 March 2020.
The Ordinance grants a discount to taxpayers who pay their profit tax / quarterly advance payment for the first quarter of 2020 (due on 25 April 2020) on time.
The discount is applied by the paying entities and has a different amount, depending on the category in which the taxpayer falls, as follows:
- Large taxpayers will benefit from a 5% discount;
- Small and medium-sized taxpayers, as well as taxpayers which do not fall into any of these categories (for example, foundations, NGOs, private schools, etc.), will receive a 10% discount.
The above corporate tax reductions also apply to:
- taxpayers which pay specific tax and carry out other activities for which tax is due on profit (these reductions apply only to the profit tax due by these taxpayers)
- taxpayers which have opted for a different financial year from the calendar year, provided they pay the amounts due by deadlines set between 25 April and 25 June 2020.
Taxpayers which pay profit tax will be required to include separately in the annual declaration of profit tax the bonus calculated under the ordinance.
Taxpayers which pay microenterprise tax will benefit from a 10% discount for the payment of the tax due for the first quarter of 2020, with the payment deadline of 25 April 2020. They will deduct from the tax due the allowance calculated according to the Ordinance.
Facilities regarding VAT
During the period of the state of emergency and for another 30 days after its termination, the requirement to pay VAT at the time of import for medicines, protective equipment, other medical devices or medical equipment and sanitary equipment needed to combat the COVID-19 pandemic has been deferred. (Details on the products for which this treatment applies are mentioned in the Annex to the Ordinance). Importers should account for the related VAT under the reverse charge mechanism. Deduction of VAT is subject to general rules provided in legislation.
In addition to the tax provisions, the Ordinance (Article 3) also gives an important clarification on eligibility for the Certificate for Emergency Situations (“CSU”). Thus companies are eligible for the certificate if either their revenues or their receipts have fallen by a minimum of 25% in March 2020 compared to the average of January and February 2020 or if their activity has been partially or totally interrupted as a result of the decisions issued by the relevant public authorities during the decreed state of emergency.
Thus, companies may report, based on their own choice, on their revenues or their receipts, by means of an affidavit, when determining the decrease in income caused by the state of emergency
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