Tax and business developments regarding coronavirus epidemic – two emergency ordinances published in Official Gazette on Saturday 21st of March
Article written by Florin Gherghel, Tax Manager Ensight Finance
Emergency Government Ordinance no. 29 / 2020 was published in Official Gazette no. 230 as of 21.03.2020 regarding some economic and tax measures in relation with the current pandemic.
The main adopted measures are:
- Granting of state guarantees for SMEs up to 80% for investment loans capped at 10 million RON, as well as the subsidization of related interests for a specified period (at least until March 31, 2021)
- Granting of state guarantees for SMEs up to 80% for loans in order to insure working capital up to the average of the expenses related to working capital during the last 2 fiscal years, capped at 5 million RON, as well as the subsidization of related interests for a specified period (at least until March 31, 2021)
- Granting of state guarantees for micro or small enterprises up to 90% of the credits / lines of credit for financing working capital, up to the average of the expenses related to working capital during the last 2 fiscal years, capped at 500,000 RON for micro and 1 million RON for small businesses, as well as subsidization of the related interests for a certain period (at least until March 31, 2021)
- Postponement of payment deadline for local taxes (buildings tax, land tax, car tax) until June 30, 2020, with the retention of the bonus established by the local councils
- Postponement until July 31, 2020 of the notification deadline towards the tax authorities regarding the intention to apply for restructuring of taxes and postponement of the restructuring request until October 30, 2020
- No interest and penalties for late payment are computed for unpaid taxes with a due date / payment date during the state of emergency (starting with 21.03.2020) and 30 days after the closure of the state of emergency
- The enforced collection of taxes is suspended / does not start during the state of emergency and 30 days after the closure of the state of emergency
- The taxpayers who apply the system of advance payments of profit tax can make quarterly advance payments for 2020 up to the amount resulting from the computation of the current 2020 quarter profit tax
- During the state of emergency, SMEs, which have discontinued their activity totally or partially and hold an emergency situation certificate, issued by the Ministry of Economy, Energy and Business Environment, benefit from deferred payment for utilities services (electricity, water, gas, telephone and internet services), as well as for rents for social or secondary offices (Ensight Note: we understand that the certificates will be available online by companies in the areas of transport, tourism, hospitality industry / HoReCa, organization of events, advertising, private education, clothing industry, footwear and leather goods, services for the population)
- The force majeure can be invoked in the contracts with the SMEs possessing emergency situation certificates only after the written proof of the renegotiation efforts of the contractual clauses, to adapt them to the situation generated by the state of emergency
- The submission of declaration regarding the beneficial owner for anti-money laundering purposes is suspended during the state of emergency, and the submission term is extended by 3 months from the date of closure of the state of emergency
Emergency Government Ordinance no. 30 /2020 was published in Official Gazette no. 231 as of 21.03.2020 regarding social protection measures in relation with the current pandemic.
The main adopted measures are:
- Granting of leave for care of children during temporary closure of the educational units, amounting to a daily amount of 75% of the salary related to a working day, but not more than the 75% of the daily average gross salary at national level. These amounts are supported from the Guarantee Fund for the payment of salaries. This facility can be granted only after all other legal options have been exhausted: work schedule delay, shift work, telework
- Extension for a period of 90 days under certain conditions for granting the insertion incentive related to the child care leave
- Granting of unemployment benefits for the period of temporary suspension of the individual employment contract at the initiative of the employer, as a result of the effects produced by coronavirus, amounting to 75% of the salary, but not more than 75% of the average gross salary at national level. The benefit is supported by the unemployment insurance budget. The unemployment benefit is to be granted to the employees of the employers who fulfill one of the following conditions:
- interrupt the activity totally or partially during the period of state of emergency and hold the certificate of emergency situations issued by the Ministry of Economy, Energy and the Business Environmen
- reduce the activity due to the effects of COVID-19 epidemic and do not have the financial capacity to pay all salaries of their employees. Employers can benefit from the payment of the aforementioned allowance for up to 75% of employees who have individual work contracts active at 21.03.2020.
In this case, the allowance is granted on the basis of a declaration on its own responsibility regarding the diminishing of cash receipts from the month previous to the submission of the declaration on its own responsibility, by a percentage of at least 25% compared to the average of cash receipts from January-February 2020, and that the lack of financial capacity to pay all employees.
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