by Florin Gherghel, Tax Manager Ensight Finance
Emergency Ordinance no. 181 / 2020 was published in Official Gazette no. 988 as of 26 October 2020 regarding some fiscal measures and prolongation of some deadlines. We mention below the main aspects.
a) Non-computation of interest and penalties / non-enforcement of unpaid taxes
Interest and penalties for late payment will not be computed for taxes due starting with March 21, 2020 and not paid until December 25, 2020 (the previous term was October 25).
The above due and unpaid taxes will not be considered outstanding taxes and their enforcement will be suspended / will not start until December 25, 2020 (with certain exceptions, such as in criminal cases).
No interest and penalties will be computed for late payment of the installments from reschedulement of taxes until December 25, 2020, the validity of these reschedulements is maintained also until December 25, 2020.
The prescription terms of the tax authorities to compute additional taxes and to request forced execution are suspended until December 25, 2020.
b) Extension of VAT refund without control
The VAT can be refunded until January 25, 2021 with the subsequent performance of the tax inspection (with certain exceptions, such as the submission of the first VAT refund request after registration for VAT purposes, the reimbursable VAT is older than 1 year). The subsequent fiscal inspection is decided based on a risk analysis made by the fiscal authorities.
c) Payment reschedulement of taxes
A payment reschedulment of taxes is possible to be approved for a maximum period of 12 months for the main and ancillary fiscal obligations whose maturity / payment term has expired after the date of declaration of the state of emergency (March 16, 2020) and are not paid until the issuing date of the tax attestation certificate.
The payment reschedulment is not granted for fiscal obligations in the total amount of less than 500 RON in case of individuals and 5,000 lei RON in case of legal entities.
In order to benefit from the payment reschedulment, the debtor must cumulatively meet the following conditions:
- to submit an application to the tax authorities until December 15, 2020 inclusive;
- not to be in bankruptcy / dissolution procedure;
- not to register outstanding fiscal obligations on the date of declaring the state of emergency and not paid until the date of issuing the fiscal attestation certificate;
- not to be liable according to the legislation regarding insolvency and / or joint liability;
- to have submitted all tax returns, according to the fiscal evidence, at the date of issuing the fiscal attestation certificate.
After receiving the request, the fiscal body issues, ex officio, the fiscal attestation certificate and communicates it to the debtor.
There are several conditions for maintaining the validity of the payment reschedulment, amongst which we mention: (i) declaring and paying the fiscal obligations with payment terms starting with the date of communication of the rescheduling decision, including until the 25th of the next month following the due date provided by law; (ii) payment of the differences of taxes resulting from rectifying declarations within maximum 30 days from the date of filing the declaration; (iii) compliance with the amount and payment terms in the rescheduling schedule, including if the rescheduling rate is paid by the next payment deadline in the rescheduling schedule.
During the period for which payment reschedulements were granted, starting with December 26, 2020, interest is due and calculated (0.01% for each day of delay) for the tax obligations scheduled for payment, namely for each rate in the payment schedule for payment starting with the date of issuing the decision of payment rescheduling and until the payment term in the schedule or until the date of payment of the installment.
The delay penalty of 0.01% will also be due for each day of delay.
Additionally, a penalty of 5% will be due for the payment rescheduling rate paid late until the next payment term in the rescheduling schedule, as well as for the differences of unpaid fiscal obligations after solving the VAT returns with reimbursement option.
The penalty of 5% is computed at: (i) the amount remaining unpaid from the rescheduling rate, representing main fiscal obligations and / or ancillary fiscal obligations rescheduled for payment; (ii) the differences of fiscal obligations remaining unpaid after the settlement of the returns with the negative amount of VAT with the option of reimbursement.
d) Reduction of the specific tax for HoReCa
HoReCa entities liable to specific tax due for HoReCA activities in 2020, do not owe specific tax for the period between October 26, 2020 (the date of entry into force of these provisions) and December 31, 2020 inclusive.
Thus, the specific tax established for 2020 will be recalculated accordingly.
e) Reduction of local taxes
Local authorities may adopt reductions of building tax for 2020 until December 2, 2020, the main measure being the reduction of the annual building tax by 50% for non-residential buildings, if, during the period for which the state of emergency / alert was established, the owners or users of the buildings were obliged, according to the law, to totally interrupt their economic activity or hold the certificate for emergency situations issued by the Ministry of Economy certifying the partial interruption of the economic activity.
In case such measures are adopted, the owners of the buildings are obliged to submit to the local fiscal authority a request for granting the reduction until December 21, 2020 inclusive, together with a declaration on their own responsibility, which must contain specific information.
f) Prolongation of restructuring of unpaid taxes
The possibility of restructuring of taxes (GO 6/2019) is extended and the obligation to notify the fiscal authorities regarding the restructuring intention can be submitted between November 1, 2020 and March 31, 2021. The restructuring request can be submitted until June 30, 2021.
g) Non-taxation for the employee of the COVID tests supported by the employer
No salary tax and social contributions are computed for the value of medical tests for diagnosing COVID-19 infection, supported by the employer, on his own initiative, for his employees, during the state of emergency or alert.
