Law no. 6/2020 regarding the Law on the budget of state social insurance for 2020 (Official Gazette no. 3 of January 6, 2020).

This law provides and authorises for budget year 2020 the revenues by chapters and subchapters and the expenses by destinations for the state social insurance budget, the budget of unemployment insurance, the budgets of non-reimbursable external funds, the synthesis of the budgets of public institutions partially funded from own revenues, and regulations specific to budget year 2020.

Order of the minister of public finance no. 3781/23.12.2019 on the main aspects related to the drafting and submittal of annual financial statements and annual accounting reports of economic operators at the territorial units of the Ministry of Public Finance and for regulating several accounting aspects (Official Gazette no. 5 of January 07, 2020).

Clarifications:

According to art. 28 from the Accounting law, companies, national firms/companies, autonomous administrations, national research and development institutes, cooperative companies, public institutions, associations and other legal entities, with and without patrimonial purpose, are obligated to draft annual financial statements. Based on these legal provisions, annually, an order of the minister of public finance regulates the conditions for submitting the annual financial statements and the annual accounting reports drafted by the economic operators, at the territorial units of the Ministry of Public Finance. The information is presented in the annual financial statements by complying with the provisions of the applicable accounting regulations, and the accounting regulations regarding the annual individual financial statements and the annual consolidated financial statements (OMFP 1802/2014) or accounting regulations according to the International Financial Reporting Standards (OMFP 2844/2016). The document submittal deadlines are:

• • 60 days after the end of the financial year for submitting the inactivity statement by the entities that were not operational from their incorporation to the end of the reporting financial year.
• • 90 days after the end of each calendar year for submitting accounting reports by legal entities under winding-up.
• • 120 days after the end of the financial year for submitting financial statements by associations, foundations, employers’ associations, cooperative units, etc.
• • 150 days after the end of the financial year for submitting financial statements by companies, national firms/companies, autonomous administrations, national research and development institutes.

All documents are drafted by the assistance software existing on the ANAF website and are submitted on hardcopy and in electronic format at the registry of the ANAF units or at postal units, by letters with declared value, or inly in electronic format, signed with a qualified digital certificate.

GEO no. 1/2020 regarding several fiscal-budgetary measures and for amending and supplementing several legislative acts (Official Gazette no. 11 of January 09, 2020).

Clarifications:

• • amends and supplements GEO no. 114/2018 on instituting measures in the field of public investments and fiscal-budgetary measures, amending and supplementing legislative acts and prorogating deadlines, namely the tax on financial assets is abrogated.
• • amends par. 1 and par. 2 of art.342 of Law no. 227/2015 on the Fiscal Code, as further amended and supplemented:

- the excise level applicable on January 1st of each year is the level provided in annex no. 1 to the law, updated with the increase of the consumer prices in the last 12 months, calculated in September of the year before the application one, compared to period October 2014 - September 2015, officially communicated by the National Statistics Institute until October 15th.

- by exception, for cigarettes, the excise level is applied as of April 1st of each year and the one provided in annex no. 1 to the law.

Order to amending and supplementing Order of the minister of pubic finance no. 2,482/2017 on the procedure and the conditions under which tax warehouses are organised, registered addressees, registered senders and authorised importers (Official Gazette no. 23 of January 14, 2020).

The legislative act refers to all the operators with excisable products, which must have one of the following tax warehouse authorisations: tax warehouse, registered addressee, economic operator with excisable products.

This order amends the competence and commissions for granting the respective authorisations. For example, for wine production tax warehouses owned by small-sized or natural-person taxpayers, the issuance of the tax warehouse authorization is performed by specialised commissions organised on the level of the general regional division (no longer granted by the central commission).

On this occasion, the operational methods of the commissions for approving taxpayer requests are used, of course commissions which are adequate for the request of the taxpayer, and as a general rule, they convene twice a month.

Order for approving the Procedure on setting the amount representing up to 3.5% of the annual tax payable for supporting non-profit entities that are incorporated and operate according to the law and religious units, and for granting private scholarships, according to the law, and the template and content of several forms (Official Gazette no. 44 of January 22, 2020).

Clarifications:

• • The Procedure on setting the amount representing up to 3.5% of the annual tax payable for supporting non-profit entities that are incorporated and operate according to the law and religious units, and for granting private scholarships, according to the law, is approved;
• • The template, content and instructions for filling in form 230 “Application regarding the destination of the amount that represents up to 3.5% of the annual payable tax” and “Annex no. ... to the Application regarding the destination of the amount representing up to 3.5% of the annual payable tax”, provided in annex no. 2.

Order for approving the template, content, manner of submitting and managing the Sole Statement regarding the revenue tax and the social contributions payable by natural persons (Official Gazette no. 47 of January 23, 2020).

Among the main modifications operated to the new form:

• • modification of the percentage from the revenue tax which taxpayers can redirect in order to support non-profit entities / religious units, for alignment with the legislative modifications; in 2018 the percentages were differentiated between 2% and 3.5%, depending on the destination;
• • eliminating the section regarding the tax on gambling revenues for period January 1 - March 22, 2018, as starting with March 23, 2018, gambling revenues are taxed only by withholding taxes, and the obligation of declaring them in the sole statement is eliminated;
• • introducing two new notions in order to facilitate the declaration of revenues from the transfer of virtual currency and those from the receivable assignment. Thus, in order to declare these revenues, two new indicators, “Earnings” and “Taxable revenues” were introduced to the new form;
• • introducing a new section regarding the revenues obtained abroad which are exempt from taxation in Romania based on an international agreement which Romania has signed;
• • eliminating the bonuses granted for submitting the statement by electronic means. We remind that the sole statement can now be submitted both in electronic format and on hardcopy.

According to Official Gazette no. 72 of 31.01.2020, the deadline for the Sole Statement on the revenue tax and the social contributions payable by natural persons is prorogated until May 25, 2020 inclusively.

Order no. 60/2020 brings modifications regarding the obligations to environment authorities. More precisely, the document refers to the modification and supplementation of the annexes at the Order of the deputy prime minister, the minister of environment, no. 591/2017 for approving the template and content of the form “Statement regarding the obligations to the environment fund” and the instructions for filling in and submitting this form (Official Gazette no. 52 of January 27, 2020).

The important modifications include the fact that it will no longer be necessary to mention in the statements data on the monthly collection targets for electrical equipment and batteries which the Organisations for Implementing the Extended Liability of Manufacturers (OIREP) fulfil. Thus, statements may be drafted more quickly and they will no longer be conditioned by monthly reports regarding the quantities of equipment and batteries capitalised on behalf of the manufacturer/importer by the aforementioned organisations.

Ordinance for amending and supplementing Law 207/2015 on the Fiscal Procedure Code (Official Gazette no. 68 of January 31, 2020).

The following aspects are supplemented:

• • Under article 236, paragraphs (20) and (21) are introduced, providing the remote communication between banking institutions and the central fiscal body in case of garnishments and making payments to the special account opened with the Operational Treasury;
• • (EU) Directive 2018/822 (“DAC 6”) is transposed into the national legislation regarding the cooperation in the fiscal field, as follows:

- definitions are introduced for: cross-border arrangement; cross-border arrangement that is subject to reporting; distinctive sign; intermediary; relevant taxpayer; commercialised arrangement; personalised arrangement.

- conditions are set within the mandatory automated information exchange regarding the cross-border arrangements that are subject to reporting;

- measures are provided on not reporting or delays in reporting cross-border arrangements, and the manner in which they are sanctioned;

-tests are detailed (distinctive tests) for identifying the cross-border transactions that are subject to reporting;

- it is indicated that the form whereby taxpayers will meet their reporting obligation will be subsequently published. Moreover, the fiscal authorities will also draft a guide for detailing the aspects regarding the reference signs which relevant intermediaries or taxpayers use in order to ascertain whether cross-border agreements need to be reported;

- the specific obligation to report until August 31, 2020 cross-border arrangements that are subject to reporting for the period comprised between June 25, 2018 and July 1, 2020 is introduced;

- the sanctions for not complying with the reporting obligations are comprised between 5,000 RON and 100,000 RON, as the case may be;

- the provisions of the ordinance are applied as of July 1, 2020.

Ordinance for amending and supplementing Law no. 227/2015 on the Fiscal Code, and for regulating fiscal and budgetary measures (Official Gazette no. 72 of January 31, 2020).

The legislative act regulates the following aspects:

• • the provisions of Directive 2016/1,164/EU for setting the norms against practices of avoiding fiscal obligations with direct impact on the operation of the internal market, and those of Directive 2017/952/EU of the Council of May 29, 2017 for amending Directive (EU) 2016/1,164 regarding the non-uniform treatment of hybrid elements involving third parties, as follows (“ATAD 2”):

- several definitions are introduced in chapter “Norms against practices of avoiding fiscal obligations with direct impact on the operation of the internal market”. Therefore, the non-uniform treatment of hybrid elements, the consolidated group for financial accounting purposes and the structured agreement are defined. Thus, the non-uniform treatments of hybrid elements are regulated.

- the rules applied if there is a non-uniform treatment of hybrid elements resulting in a double deduction and the rules applied insofar as there is a non-uniform treatment of hybrid elements resulting in a deduction without inclusion are stipulated.

- also, the non-uniform treatments of inversed hybrid elements and the non-uniform treatments of fiscal residency are regulated. In applying these new norms, the norms/concepts/definitions/examples drafted by the Organization for Economic Cooperation and Development, comprised in its report on neutralizing the effects of the systems based on the non-uniform treatment of hybrid elements, are used.

• • Directive (EU) 2018/1,910 for amending Directive 2006/112/EC regarding the harmonization and simplification of certain norms from the value added tax system for taxing commercial exchanges between member states and Directive (EU) 2019/475 for amending Directives 2006/112/EC and 2008/118/EC regarding the inclusion of the Italian commune Campione d'Italia and the Italian waters of the Lugano lake in the customs territory of the Union and in the field for the territorial application of Directive 2008/118/EC, as follows:

- the inclusion of Italian commune Campione d'Italia and the Italian waters of the Lugano lake in the customs territory of the Union and in the field for the territorial application of Directive 2008/118/EC of the Council in relation to excises, and are excluded from the territory of the European Union for VAT purposes,

- the rules regarding the inventory at the disposal of the client, the rules regarding chain transactions and exemption conditions for intra-community deliveries of goods are amended and supplemented

• • the submittal of statements related to forms 392A, 392B and 393 is suspended until December 31, 2022.

On January 31, 2020, 00:00, the United Kingdom of Great Britain and Northern Ireland leaves the Customs Union and the sole market of the European Union. The BREXIT agreement was approved by the Parliament of the European Union, the Council of the European Union and the British Parliament.

The withdrawal agreement provides a transitional period until December 31, 2020 in which the current legislation of the European Union continues to be applied. No customs formalities will be performed in the transition period, and the exchanges of commodities between the United Kingdom and the European union will be deemed as intra-community deliveries and purchases. The EU Directives and Regulations regarding VAT, the Directives regarding direct taxation and the Regulations regarding social security and cooperation remain applicable.

Regarding VAT, the deliveries of goods between the United Kingdom and EU will be deemed as exports and imports after the end of the transitional period. A potential impact will be for British companies that are directly registered for VAT purposes in Romania. Thus, they will have to appoint in the following period a fiscal representative in Romania. Otherwise, they risk to have their VAT number cancelled.