Extension of deadlines, granting of fiscal facilities for the payment of annual income tax, fiscal amnesty on interest and penalties and other ancillary payments for certain taxpayers – these are the main elements of the package adopted by the Romanian Government to alleviate the effects of the coronavirus pandemic on the Romanian economy and to prevent the accumulation of debts to the Romanian state budget.
Government Emergency Ordinance no. 69/2020, which includes the new financial measures, was published in the Official Gazette of Romania no. 393 as of 14 May 2020. One of the adopted measures is the cancellation of interest and penalties related to taxes overdue as of 31 March 2020 (due by companies, associations or individuals). We outline the details below.
Interest and penalties related to overdue taxes as of 31 March
Interest or penalties related to overdue taxes as of 31 March 2020 are cancelled if the following conditions are fulfilled cumulatively:
a) all taxes overdue as of 31 March 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 or penalties;
b) all taxes due between 1 April 2020 and the submission date of the cancellation request are paid until the date the cancellation request is submitted;
c) all tax returns are submitted until the submission of the cancellation request;
d) the cancellation request is submitted after the conditions a)-c) above are fulfilled, but no later than 15 December 2020.
Interest and penalties related to additional taxes
Interest and penalties related to additional taxes declared through rectifying tax returns and taxes with a due date before 31 March 2020 are cancelled if the following conditions are fulfilled cumulatively:
a) the rectifying tax return is submitted starting from 1 April 2020 until the submission date of the cancellation request;
b) all these taxes are paid (e.g. by direct payment / compensation) until the submission date of the cancellation request;
c) conditions b)-d) from the first paragraph above are met (payment of current taxes, submission of tax returns, submission of cancellation request).
Other interest and penalties
Interest or penalties related to taxes due before 31 March 2020 (paid with a delay until this date), are cancelled if the conditions b)-d) of the first paragraph above are met cumulatively (payment of current taxes, submission of tax returns, submission of cancellation request).
Interest or penalties related to taxes handled by the central fiscal body with a due date prior to 31 March 2020 and instituted by tax decisions issued through a tax audit in force as of 14 May 2020 (the entry into force of the emergency ordinance) are cancelled if the following conditions are cumulatively met:
a) all additional taxes instituted by the tax decision are paid (e.g. by direct payment / compensation) by the deadline provided in the tax decision;
b) the cancellation request is submitted within 90 days of the communication of the tax decision.
Good to know
Entities can notify their intention to benefit from the cancellation of interest and penalties no later than 15 December 2020, the latest day when the cancellation request must be submitted, and certain procedural aspects must be fulfilled (e.g. postponement of payment of interest / penalties, suspension of enforced collection of taxes).
Entities benefiting from the rescheduled payment of taxes as well as those obtaining such measures between 14 May and 15 December 2020 may benefit from the cancellation of interest and penalties in compliance with certain conditions.
For taxes due to local authorities overdue as of 31 March 2020, similar facilities as above may be granted by the local authorities.
Procedures for applying the above provisions will be issued.
If you would like to know more about the new fiscal measures or other tax issues in Romania, please visit the homepage of Ensight, the exclusive representative of WTS Global in Romania.
