I. Government Emergency Ordinance no. 181/2020 concerning fiscal-budgetary measures, amendment of normative acts and extension of certain terms

On October 26, 2020, the Government Emergency Ordinance no. 181/2020 concerning fiscal-budgetary measures, amendment of normative acts and extension of certain terms was published in the Official Gazette, with the purpose of supporting taxpayers.

In the context of the pandemic, a new set of measures has been adopted in order to support the economic activity of taxpayers. Among these, we mention the following:

1. Introduction of a simplified payment rescheduling of outstanding tax liabilities recorded following the state of emergency period:

• The incentive is granted for a period of 12 months and covers the obligations accumulated since March, 16th;

• The incentive applies only to debtors who have not registered outstanding tax liabilities prior to the state of emergency;

• The rescheduling will be granted within maximum 5 days, without the need to establish guarantees;

• For companies that are / will be subject to a tax audit, any additional amounts established in the frame of those audits will also be included in the payment rescheduling;

• Companies enjoying this incentive will need to duly settle all taxes due after the incentive is granted.

In order to enjoy the tax incentive, taxpayers will have to meet the following criteria:

• to submit an application to the competent fiscal authorities no later than December, 15, 2020;

• taxpayers shall not undergo bankruptcy or dissolution;

• taxpayer shall not have had any outstanding fiscal obligations upon the entry into force of the state of emergency (March, 16) and unpaid upon the issuance date of the tax clearance certificate;

• taxpayers shall duly submit the tax statement according to the fiscal vector until the issuance date of the tax clearance certificate.

In addition, in order for the tax incentive not to be withdrawn, taxpayers will need to:

• To declare and pay all tax statements due after the rescheduling decision is issued; the condition is considered fulfilled if the payment is performed until the 25th day of the month following the one when the deadline occurred.

• To settle all tax liabilities established by way of tax assessment decisions until the 30th day of the month following the one when the deadline occurred

• To pay any additional tax liabilities resulting from the submission of rectifying tax statements within 30 days after the submission date

• To observe the amounts and deadline of the rescheduling plan; the condition is considered fulfilled if the instalment is paid until the following deadline of the rescheduling plan.

• To pay the amounts resulting from solving VAT reimbursement requests within 30 days after the notification is communicated.

During the rescheduling plan, the following late payment interest and penalties will arise:

• Interest in amount of 0.01% per day starting the date when the rescheduling decision is issued and the deadline of each instalment / payment date;

• Late payment penalty in amount of 0.01% per day until the date of issuing the rescheduling decision;

• Should the instalments be paid with delays, a penalty of 5% shall be charged on the outstanding amount of the rescheduled instalment, representing both main tax liabilities and / or ancillary tax liabilities, including also interest flowing over the rescheduling period, as the case may be.

2. Expenses incurred with testing of employees regarding the infection with SARS-COV 2 shall be treated as non-taxable benefits in kind for income tax and social contributions, during the period of state of emergency and alert.

3. HORECA taxpayers will be exempt for the period between the entry into force of the Ordinance and until 31.12.2020.

4. The tax restructuring mechanism introduced by Government Ordinance 6/2019 has been extended. Thus, the notification may be submitted also between 01.11.2020 and 31.03.2021, while the application form and the file until 31.06.2021.

5. The deadline for VAT refund with subsequent tax audit is extended until January 25, 2021.

6. The fine for large taxpayers failing to connect their cash registers with the ANAF electronic monitoring system is suspended until 31.12.2020.

II. Government Decision no. 864/2020 for the amendment and completion of the Methodological Norms for the application of the Fiscal Code

The Government of Romania adopted on October 16, 2020 by publishing in the Official Gazette no. 84/2020 a series of fiscal measures regarding the Rules for the application of the Fiscal Code regarding the corporate income tax, value added tax and excise duties.

We hereby present the main measures which are mostly in the area of VAT:

• For individuals who conclude two sale transactions involving real estate property during a year, out of which the first being taxable under normal circumstances, it was clarified that both will be taken into account when calculating the ceiling for registration for VAT purposes, even if the second one is exempt from VAT.

• As an alignment with the Fiscal Code, food transfers will not be considered deliveries of goods if they are made at any time in the last 10 days of validity until the date of “minimum durability”, as defined under Law no. 217/2016 on food waste.

• The legislation also clarifies aspects related to vouchers (i.e. they can be physical or electronic) and also clearly establishes the treatment of tickets which offer the holder only a discount of the purchase price, thus not representing vouchers.

• For the period when the VAT code was cancelled, the law mentions the possibility of a positive VAT adjustment (1/5 or 1/20) for capital goods upon re-registration for VAT purposes, if they are still in the patrimony and have been used for deductible transactions.

• The date of optional registration for VAT purposes after starting the activity but before exceeding the ceiling will be 1st of the month following the request (similar to the case when the ceiling is exceeded). Previously, the date when the registration decision is communicated was valid for such cases.

• The risk criteria for registration for VAT purposes were included in annex no. 5.