2020. november 6.

Additional fiscal measures in Romania in response to ongoing pandemic

Among other things, deadline for VAT refunds to be extended

On 26 October 2020 the Romanian Government published Government Emergency Ordinance no. 181/2020 in Official Gazette no. 988. The ordinance, which entered into force on the day of its publication, introduces some additional fiscal measures in Romania in response to the ongoing COVID-19 pandemic, and also extends some deadlines. After the fiscal amnesty for some interest and penalties and other measures introduced in May, the next step of the Romanian Government is to support businesses during the recovery period. Below we highlight the main aspects of these additional fiscal measures in Romania. 

No interest and penalties / non-enforcement of unpaid taxes

One of the main reliefs of the recent additional fiscal measures in Romania is the non-computation of interest and penalties for late payment. More precisely, interest and penalties on taxes due from 21 March 2020 and not paid until 25 December 2020 will not be computed (the previous deadline was 25 October 2020).

The above due and unpaid taxes will not be considered outstanding and their enforcement will be suspended / will not start until 25 December 2020 (with certain exceptions, such as in criminal cases).

No interest and penalties will be computed for the late payment of instalments from the rescheduling of taxes until 25 December 2020, the validity of this rescheduling is also maintained until 25 December 2020.

The prescription terms of the Romanian tax authorities to compute additional taxes and prescribe enforcement are suspended until 25 December 2020.

Extension of VAT refunds without a VAT audit

Another important element of the additional fiscal measures in Romania is that VAT can be refunded until 25 January 2021, with VAT inspections carried out afterwards (with certain exceptions, such as the submission of the first VAT refund request after registering for VAT purposes, or the reimbursable VAT is older than one year). Subsequent fiscal inspections are ordered based on a risk analysis by the fiscal authorities.

Payment rescheduling of taxes

A payment rescheduling of taxes may be approved for a maximum period of 12 months for the main and ancillary fiscal obligations whose maturity / payment term expired after the declaration date for the state of emergency (16 March 2020) and they are not paid before the issue date of the fiscal attestation certificate.

Payment rescheduling is not permitted for fiscal obligations totalling less than RON 500 (roughly EUR 100) for individuals and RON 5,000 (roughly EUR 1,000) for legal entities. To benefit from the payment rescheduling, the debtor must cumulatively meet the following conditions:

  • submit an application to the tax authorities by 15 December 2020;
  • not be subject to bankruptcy / dissolution proceedings;
  • not have outstanding fiscal obligations on the date the state of emergency was declared, which are not paid before the issue date of the fiscal attestation certificate;
  • not be liable according to the legislation regarding insolvency and / or joint liability;
  • has submitted all tax returns, according to fiscal evidence, by the issue date of the fiscal attestation certificate.

After receiving the request, the fiscal body issues the fiscal attestation certificate ex officio, and communicates it to the debtor. Apart from this, there are several conditions for maintaining the validity of the payment rescheduling.

During the payment rescheduling period, from 26 December 2020 interest is due and calculated (0.01% for each day of delay) for the tax obligations scheduled for payment, namely, for each rate of the payment schedule, computed between the issue date of the payment rescheduling decision, and payment date of the instalment. The delay penalty of 0.01% will also be due for each day of delay.

Additionally, a penalty of 5% will be due for any late payment rescheduling rate until the next payment term in the rescheduling schedule, as well as for the differences of any unpaid fiscal obligations after settling VAT returns with a reimbursement option. The penalty of 5% is calculated based on:

  • the amount remaining unpaid from the rescheduling rate, representing the main fiscal obligations and / or ancillary fiscal obligations rescheduled for payment;
  • the differences of fiscal obligations remaining unpaid after the settlement of the returns with the negative amount of VAT with a reimbursement option.
Reduction of specific tax for HoReCa

According to the additional fiscal measures in Romania, HoReCa entities (hotels, restaurants, cafés) liable for the specific tax due for HoReCA activities in 2020, do not owe specific tax for the period between 26 October 2020 (the date these provisions enter into force) and 31 December 2020.

Thus, the specific tax established for 2020 will be recalculated accordingly.

Reduction of local taxes

Local authorities may reduce building tax for 2020 until 2 December 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, by law, to completely suspend their economic activity, or they hold a certificate for emergency situations issued by the Romanian Ministry of Economy certifying the partial interruption of the economic activity.

If 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 21 December 2020, together with a declaration on their own responsibility, which must contain specific information.

Extended restructuring of unpaid taxes

The additional fiscal measures in Romania also extend the possibility to restructure taxes (GO 6/2019). The obligation to notify the fiscal authorities of this restructuring intention can be submitted between 1 November 2020 and 31 March 2021. The restructuring request can be submitted until 30 June 2021.

No tax on employees for COVID-19 tests supported by the employer

No salary tax and social contributions are computed for the value of medical tests to diagnose COVID-19 infection, as supported by employers on their own initiative, for their employees, during the state of emergency or alert.

If you would like to know more about the additional fiscal measures in Romania in force from 26 October 2020, please visit the homepage of Ensight, the exclusive representative of WTS Global in Romania.

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