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Financial – fiscal measures issued through Emergency Ordinance no. 69 / 2020

Article written by Florin Gherghel, Tax Manager Ensight Finance

Fiscal amnesty

Emergency Ordinance no. 69 / 2020 was published in Official Gazette 393 as of 14 May 2020 regarding some financial – fiscal measures

One of the adopted measures is regarding the cancellation of the interest / penalties related to taxes overdue as of 31 March 2020 (due by companies, associations or individuals), as follows:

  • Interest, penalties related to overdue taxes as of March 31, 2020 are canceled if the following conditions are fulfilled cumulatively:
  1. all taxes overdue as of March 31, 2020, handled by the central fiscal body, shall be paid (e.g. by direct payment, compensation of taxes) until the submission date of the request for cancellation of interest / penalties;
  2. all taxes due between April 1, 2020 and the submission date of the cancelation request are paid until the date when the cancellation request is submitted;
  3. all tax returns are submitted until the submission of the cancellation request;
  4. the cancelation request is submitted after the conditions a) – c) above are fulfilled, but no later than 15 December 2020.
  • Interest, penalties related to additional taxes declared through rectifying tax returns, taxes having due date before March 31, 2020, are canceled if the following conditions are fulfilled cumulatively:
  1. the rectifying tax return is submitted starting with April 1, 2020 until the submission date of cancelation request (or within 10 days starting from May 14, the entry into force of the ordinance, if a tax audit starts within this timeframe);
  2. all these taxes are paid (e.g. by direct payment / compensation) until the submission date of cancelation request;
  3. conditions b) – d) from the first paragraph above are met (payment of current taxes, submission of tax returns, submission of cancellation request).
  • Interest, penalties related to taxes due before March 31, 2020 (paid with delay until this date), are canceled if the conditions b) – d) of the first paragraph above are met cumulatively (payment of current taxes, submission of tax returns, submission of cancelation request).
  • Interest, penalties related to taxes handled by the central fiscal body with due date prior to March 31, 2020 and instituted by tax decisions issued through a tax audit in force as of May 14, the entry into force of the emergency ordinance, are canceled if the following conditions are cumulatively met:
  1. all additional taxes instituted by the tax decision are paid (e.g. by direct payment / compensation) until the payment term provided in the tax decision;
  2. the cancellation request is submitted within 90 days from the communication of the tax decision.
  • The entities can notify the intention to benefit from cancellation of interest / penalties no later than December 15, 2020, the latest day when the cancelation request must be submitted and certain procedural aspects must be fulfilled (e.g. postponement of payment of accessories, non-start / suspension of execution forced).
  • The entities benefiting from payment-reschedule of taxes, as well as those who obtain such measures between May 14 (the entry into force of the emergency ordinance) and December 15, 2020, may benefit from cancellation of interest / penalties in compliance with certain conditions.
  • In case of taxes overdue as of March 31, 2020 due to local authorities, similar facilities as above may be granted by the local authorities.
  • Procedures for the application of the above provisions will be issued.

 

Bonuses for individuals / local tax reductions

Emergency Ordinance no. 69 / 2020 was published in Official Gazette 393 as of 14 May 2020 regarding some financial – fiscal measures

The main amendments, in addition to the above fiscal amnesty, are:

  • The submission deadline of the unique tax return and the payment of declared amounts is postponed until June 30, 2020.
  • The following bonuses are granted to individuals if they submit the unique tax return until June 30, 2020 for the incomes realized in 2019 (the bonus is granted for income tax, social insurance contribution and social health insurance contribution due for 2019):
  1. a bonus of 5% of these amounts is granted, if the income tax, the social insurance contribution and of the social health insurance contribution due for 2019 are paid / compensated until June 30, 2020;
  2. a bonus of 5% of these amounts is granted for the submission of the unique tax return electronically (this bonus is granted only if the above condition is met).
  • The local authorities may reduce the building tax until August 14, 2020, the reduction being applicable for the duration of the state of emergency in 2020 due to coronavirus pandemic:
  1. a maximum reduction of 50% of the annual building tax applicable to non-residential buildings used for the economic activity of the owners or being available to other natural or legal persons (e.g. by renting) – if the owners or the users of the buildings were obliged during the state of emergency period, according to the law, to completely interrupt their economic activity or to possess the emergency certificate issued by the Ministry of Economy certifying the partial interruption of economic activity (a request must be submitted must be submitted by September 15, 2020, together with specific declarations on own responsibility or certificates for emergency situations);
  2. exemption from payment of monthly tax on buildings due by those using a building in the public / private ownership of the state or of the administrative-territorial units – if the users of the buildings were obliged, according to law, to ceases their economic activity completely during the state of emergency period (similarly, a request must be submitted by September 15, 2020).
  • The owners of the above non-residential buildings were in the same time in the following cases until May 14, 2020 (the end of state of emergency):
  1. they waived at least 50% of the right to cash rent, according to the contractual provisions, for the period in which the state of emergency was established;
  2. at least 50% of the total areas eligible for economic activities were not used, because the holders of the right to use the respective buildings were obliged, according to the law, to totally and / or partially interrupt their economic activity.

 

VAT exemption

Emergency Ordinance no. 70 / 2020 was published in Official Gazette 394 as of 14 May 2020 regarding measures in pandemic context

The main fiscal measure is:

  • Certain deliveries to associations and foundations made until September 1, 2020 are exempt from VAT with the deduction right: deliveries of medicines, protective equipment, other medical devices or equipment and sanitary materials used to combat COVID-19, as specified in the annex to the ordinance (the supplier justifies the VAT exemption with a declaration on own responsibility regarding the destination of the goods, made available by the beneficiary association / foundation, until the time of delivery).

 

Bonuses regarding corporate income tax / micro-enterprise tax

Law 54 / 2020 was published in Official Gazette 396 as of 15 May 2020 regarding approval of Emergency Ordinance 33/ 2020 regarding some fiscal measures

The amendment is:

The payers of corporate income tax and the payers of the micro-enterprise tax, which pay the due tax until the payments dates for second quarter (25.07.2020) and third quarter (25.10.2020), are entitled to a bonus of 10% computed on the corporate income tax due (the law should be corrected in order to mention that the bonus is calculated on the due tax and not for the due corporate income tax).

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