New fiscal measures adopted by Romanian Government – GEO no. 181 / 2020
New fiscal measures adopted by Romanian Government
Government Emergency Ordinance (GEO) no. 181/2020 (to amend previous legislation and extend certain deadlines) was published in the Official Journal of Romania (no. 988), on 26 October 2020. The Ordinance introduces a series of new fiscal measures in the context of the continuation of the COVID-19 pandemic. The most important include the extension of the period for non-application of interest and penalties relating to outstanding debts until 25 December 2020, extension until 25 January 2021 of the deadline for VAT refunds with an audit taking place subsequently, the possibility for the tax authorities to offer payment by installments through a simplified procedure as well as exemption from payment for activity-specific tax for the period 26 October - 31 December 2020.
The purpose of the facilities is to support payment compliance and to maintain financial liquidity in the economy.
Tax Authorities may offer payment by installments
The Ordinance sets out conditions under which the tax authorities may approve the rescheduling of tax obligations as well as any associated interest and penalties for a period of up to 12 months. This applies to obligations whose maturity / term of payment was after the date when the state of emergency was declared and which were unpaid as at the date of issuance of the tax attestation certificate, administered by the tax authority. The following conditions need to be met (cumulatively):
- An application must be submitted by 15 December 2020 inclusive, under penalty of forfeiture, to which a proposal for debt rescheduling may be attached.
- The applicant must not be subject to bankruptcy proceedings or be in the process of being dissolved.
- The applicant must not have had outstanding fiscal obligations on the date of the declaration of the state of emergency (16 March) which had not been paid by the date of issuance of the fiscal attestation certificate.
- The applicant must not to be liable for payments due under legislation on insolvency and / or sole liability. (If the amount has been paid, the condition is considered fulfilled).
- The taxpayer must have had all the required tax returns filed for their taxpayer category, on the date of issuance of the tax attestation certificate.
- Debt rescheduling is not granted for:
- Tax liabilities which have previously been rescheduled and for which the rescheduling agreement is no longer valid.
- Payment obligations of less than RON 500 for individuals and less than RON 5,000 for legal entities.
- Tax obligations that have their maturity / payment deadline after the date of issuance of the tax attestation certificate or which have been suspended.
Penalties of 5% will be applied for late payment, which will be communicated by decisions on interest and penalty obligations and for the period during which installments were granted, interest of 0.01% is due for each day of delay (starting 26 December 2020).
At the same time, if the payment rescheduling agreement becomes invalid, a penalty of 5% will be due for the outstanding obligations.
The procedure for granting the rescheduling will be approved by Order of the President of ANAF within 15 days of the entry into force of this GEO.
- No specific tax is due from the date of entry into force of the GEO (26 October) until 31 December 2020.
- The calculation will be made by dividing the specific annual tax by 365 calendar days and multiplying the resulting value by the number of days remaining after the subtraction of the 90 days of the state of emergency, plus the period 26 October- 31 December 2020 inclusive, plus the period in which activity was interrupted under GEO 48 / 2020 Entities that have already filed the specific tax return for the first half of 2020 will file an amending return.
- The GEO permits local councils as well as the General Council of Bucharest to do the following up to 2 December:
- Reduce the annual building tax by up to 50% for non-residential buildings, owned by individuals or legal entities, if during the state of emergency/ alert and as a result of the effects of the Covid pandemic, they were forced to stop all economic activity or if they hold an emergency situations certificate.
- Grant exemption from payment of the monthly building tax due by tenants, assignees, or administrators of a publicly or privately owned building, under the above conditions.
- The reductions will be made on the basis of an application, an affidavit and a copy of the emergency situations certificate, if applicable, submitted by 21 December 2020.
- For large taxpayers, non-compliance with the obligation to connect electronic fiscal cash registers to the ANAF server will not constitute an administrative offense until 31December 2020.
- Taxpayers which want to restructure their budgetary obligations can also notify the relevent fiscal authority between 1 November 2020 and 31 March 2021, and the restructuring request can be submitted until 30 June 2021.
- Expenses related to medical tests for diagnosing COVID-19, performed for the purposes of carrying out an activity, in order to detect and prevent the spread of the virus, will be deductible when calculating the net income from independent activities determined when using the system involving deduction of real expenses.
- The expenses incurred by an employer / payer for medical tests to diagnose COVID-19, at the initiative of the employer for the detection and prevention of coronavirus, for employed persons, will not represent taxable income and will not be included in the monthly calculation of social insurance contributions.
- The deadline until which which no interest and penalties will be calculated for debts due from 21 March, and until which foreclosure is suspended or is not started, has been extended until 25 December 2020.
- The deadline for VAT refunds with audits taking place subsequently has been extended until 25 January 2021.
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