Government and institution measures in response to COVID-19.
Government and institution measures in response to COVID-19.
An ordinance (no. 33 / 2020) provides incentives—a discount—for on-time payments of corporate income tax or the tax on the income of micro-enterprises that are due on 25 April 2020 for the first quarter of 2020 as a response to the coronavirus (COVID-19) epidemic.
In addition, a requirement to pay value added tax (VAT) on certain imports of goods that are needed to combat the COVID-19 pandemic is postponed, and importers will apply the reverse-charge system.
Tax measures – Direct and Indirect
(e.g. payment deferrals, rate reductions…)
Click here to see a comprehensive summary of jurisdictional tax measures and government reliefs in response to COVID-19.
Economic stimulus measures
(e.g. loans, moratorium on debt repayments…)
- Raising the ceiling for credit guarantees for SMEs affected by the coronavirus crisis by LEI 5 billion, which depending on the financing needs of SMEs, can be increased even further to LEI 30 billion. Interest is 100% subsidized. The guarantee will cover 90% of loan amounts of up to LEI 1 million and 50% for credits of over LEI 1 million.
- Same for Start-ups
(e.g. state compensation schemes, training…)
- Covering 75% of the salary of employees sent into technical unemployment by companies affected by the coronavirus crisis if their activity is interrupted, totally or partially or is reduced as a result of the effects of the COVID-19 pandemic for the duration of the state of emergency, based on a solemn declaration of the employer.
- GEO 92/202 gives support to employers who, between 1 June 2020 and 31 December 2020, hire, on full time, permanent contracts, people aged over 50, whose employment has ceased for reasons not attributable to them, during the period of the state of emergency. Support is also offered for the hiring on full time, permanant contracts up to 31 December 2020 of young people aged between 16 and 29, who are registered as unemployed in the records of the county employment agencies. For each person employed in the categories mentioned above, the employer will receive 50% of the employee's salary, for 12 months, but not more than 2,500 RON (500 EUR) per month.
- During the period of reduction of the working hours, employees affected by this measure will receive an indemnity of 75% of the difference between the gross basic salary provided for in the individual employment contract and the gross basic salary corresponding to the hours actually worked as a result of the reduction of the working hours. This indemnity comes in addition to the salary rights calculated for the actual time worked.
- Professionals, as regulated by the Civil Code (Law no. 287/2009), as well as persons who have concluded individual labor agreements, can benefit from a monthly allowance of 41.5% of the average gross salary as established for 2020, based on an application.
- Persons who carry out unskilled activities on an occasional basis (day laborers) will be granted an amount from the state budget representing 35% of the remuneration due for a working day for a period of 3 months.
- Employers who have employees with individual employment contracts for a fixed period of no more than 3 months benefit from the payment by the state of 41.5% of the salary of these employees, but not more than 41.5% of the average gross salary for 2020.
- Employers are granted one-off financial support of 2,500 RON (EUR 500 ) for each teleworker, to support the purchase of technological goods and services needed to carry out their activity. These amounts are granted to employers for each employee who teleworked during the state of emergency for at least 15 working days.
Social protection measures
- The criteria for sending employees into technical unemployment and minimum income ensured for freelancers working in industries where activity is reduced or interrupted due to the pandemic.
- The conditions for granting free paid days to parents, in order to supervise their children during the temporary closure of educational establishments.
- The online submission of the documentation needed in order to gain access to social benefits.
- The measures for ensuring continuity in the granting of return to work incentives and child care allowance, as well as for facilitating access to medical leave and medical leave indemnities for quarantined persons.
- The employees which have at least one active employment agreement will not beneficiate of the allowance for technical unemployment. if one employee has more employment contracts and all these are suspended, they will beneficiate of the allowance for the most favorable salary.
- Allowances for technical unemployment and days off granted to parents are not exempt from income tax and contributions, regardless of who they are granted to, if they are paid for from the state budget.
- Start-ups: Same Public funding covering applies
- The employers shall initiate the prior consultation of the representative trade union or of the employees’ representatives, as the case may be, with respect to reduction of the working schedule from 5 to 4 days/week – their consent is not mandatory, but they have to be consulted;
- Registration with REVISAL of employees’ working program and salary amendment under the legal terms (i.e. one working day prior to the amendment), under the penalty of administrative sanctions that may be applied by the competent labor authorities.
- GEO no. 132/2020 supports employers whose activity has been temporarily reduced as a result of the establishment of the states of emergency and alert, allowing them the possibility to reduce the working time of employees by a maximum of 50% of that set out in the individual employment contract.
- Exemption from Customs duties for certain products constituted as medical emergency stocks by the Emergency Department within the Ministry of Internal Affairs.
- Deferment for import VAT only for the goods intended to prevent and combat the spread of coronavirus COVID-1
- Fiscal obligations due from 21.03.2020 and not paid until 25 October 2020 will not be considered outstanding fiscal obligations. Consequently, the deadline for the payment of such “deferred” obligations is postponed to 25 October 2020.
Recovery Plan Overview
- Recovery plan : Romania Relance
- Announcement : July 1st , 2020
- Main orientations : grants for companies, competitiveness, social protection measures
Grants for companies
- 3.18 billion euros will be allocated for restarting companies, working capital and investments, for increasing the competitiveness of SMEs, digitalization of companies, development/ growth of agriculture and food industry, relocation of companies in Romania
- 0.5bn€ for investments and economic reconversion of SMEs and 0.45bn€ for increasing competitiveness of SMEs
- 0.2bn€ for financing rural entrepreneurship and 0.12 for financing the construction of 8 regional warehouses for agricultural products
- 0.3bn€ for financing investments projects, including greenfield projects
- 0.15bn€ grants for students start-ups in competitive and innovative fields
- Horeca (Hotels, restaurants, catering), tourism, agriculture, transportation, constructions, IT, pharma, automotive, energy.
Instruments for liquidity
- 5.8 billion euros will be allocated for guaranteeing loans for working capital, for ensuring the liquidity of companies, guaranteeing the leasing of equipment and machinery
- 3bn€ for 80-90% state-guaranteed loans and 100% subsidized interest on investment loans
- 0.2bn€ for stimulating the risk exposure of insurers and facilitating companies' access to securing commercial credit and 0.6bn€ for guaranteeing factoring financing (0.3 bn€ for factoring and 0.3bn€ for discounting)
- Cross-industry with a focus on financial support of companies and SMEs.
Employment and social protection measures
- prolongation of the technical unemployment indemnity with an impact of 0.17bn€ / month
- 41,5% of paid salaries for a period of three months once the activity restrictions are lifted and workers return to works – impact 0.7bn€
- an indemnity of 75% of the difference between the gross basic salary provided for in the individual employment contract and the gross basic salary corresponding to the hours actually worked as a result of the reduction of the working hours
- 50% of the employee’s gross salary but no more than 500 € for employers who hire young people, people over the age of 50 and Romanians returning from abroad
- employers are granted one-off financial support of 500 € for each teleworker, to support the purchase of technological goods and services needed to carry out their activity
Other measures and sources
- GEO 29/2020 – tax relief measures enacted in response to the COVID-19 outbreak
- GEO 30/2020 – Social protection measures during the state of emergency due to COVID-19
- GEO 48/ 2020 Additional fiscal measures and procedural and reporting clarifications during the state of emergency.
- Fiscal facilities granted during the state of emergency, through G.E.O. no. 33 / 2020
- Law 54/2020 for approval of GEO 29/2020
- GEO 99/2020 - New fiscal measures and extensions of deadlines for the facilities already granted
Tax: René Schob – email@example.com
Restructuring: Speranta Munteanu – firstname.lastname@example.org
Legal: Laura Toncescu – email@example.com