Extension of tax facilities

by Florin Gherghel, Tax Manager Ensight Finance

Emergency Ordinance 99 / 2020 regarding some fiscal measures was published in Official Gazette 551 as of 25 June 2020

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 October 25, 2020 (the previous term as June 25).

The above due and unpaid taxes will not be considered outstanding taxes and their enforcement will be suspended / will not start until October 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 October 25, 2020, the validity of these reschedulements is maintained also until October 25, 2020.

The prescription terms of the tax authorities to compute additional taxes and to request forced execution are suspended until October 25, 2020.

b. Extension of VAT refund without control

The VAT can be refunded until October 25, 2020 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. Facilities for payment of corporate income tax / micro-enterprise tax

The companies paying corporate income tax / micro-enterprise tax that pay the due quarterly tax until the due dates, July 25, 2020 inclusive (for the second quarter), respectively October 25, 2020 inclusive (for the third quarter), benefit from a 10% bonus computed on due quarterly tax.

Corporate income tax payers with a fiscal year different from the calendar year benefit also from this facility, for the payment of the due corporate income tax until the due terms, computed accordingly.

d. VAT exemption for supply of medical products

Deliveries of individual protective masks and medical ventilators for intensive therapy until October 1 2020 (necessary for the establishment of rescEU – capacity reserve of the European Union), made to the public institutions responsible for the establishment of this reserve, are exempt from VAT with the right of deduction.

The supplier justifies the VAT exemption with the declaration on responsibility regarding the destination of the goods, made available by the beneficiary institution, signed by its legal representative, at the latest at the time of delivery.

Imports and intra-community acquisitions of individual protective masks and medical ventilators for intensive therapy, carried out by the responsible public institutions (for the establishment of rescEU – European Union capacity reserve), until 1 October 2020 are exempt from VAT.

The VAT exemption for the import of goods is applied on the basis of the declaration on the own responsibility of the beneficiary institution, signed by its legal representative, which is submitted to the competent customs authorities at the time of import.

e. Reduction of HoReCA specific tax

HoReCa entities liable to specific tax due for HoReCA activities for 2020 do not owe specific tax for a period of 90 days computed from June 25 (the date of entry into force of the emergency ordinance).

Thus, the specific tax due for 2020 is recomputed accordingly, by dividing the annual specific tax by 365 calendar days and multiplying the resulting value by the difference between the number of 365 calendar days and the number of 90 calendar days.

The declaration and payment of the specific tax related to the first semester of 2020 is made until October 25, 2020 inclusive (the payment deadline was July 25).

In the case of entities that did not owe the specific tax for the period in which they interrupted their activity totally or partially, during the state of emergency (holding the certificate for emergency situations and not being insolvent), they will decrease this period in which they interrupted the activity for the computation of the specific annual tax.

DAC 6 – postponement of reporting obligations

by Florin Gherghel, Tax Manager Ensight Finance

New reporting obligations to the tax authorities should have entered into force from July 1, 2020 regarding the cross-border arrangements with potential risk of avoidance of tax obligations, according to the EU DAC 6 Directive.

The European Directive regarding the postponement of reporting deadlines was implemented in Romania through the Emergency Ordinance 107/2020, published in the Official Gazette no. 579 / 01.07.2020.

Thus, intermediaries or companies must report the reportable cross-border arrangements for the period July 1, 2020 – December 31, 2020 in 30 days starting with January 1, 2021 (the previous deadline was July 1, 2021), practically the arrangements must be reported in January 2021.

Reportable cross-border arrangements for the period from 25 June 2018 to 30 June 2020 must be reported by 28 February 2021 (the previous deadline was 31 August 2020).

We are still waiting for the tax authorities to publish the guide for the application of these provisions, as there are many question marks regarding the reportable transactions.

We remind you the significant fines for non-compliance: (i) failure to report or reporting with delay by intermediaries or relevant taxpayers is sanctioned with a fine between RON 20,000 and RON 100,000; (ii) the non-fulfillment by the intermediary of the obligation to notify another intermediary or of the relevant taxpayer, in case the intermediary is subject to the professional privilege, is sanctioned with a fine between RON 5,000 and RON 30,000.