Emergency Government Ordinance no. 48/2020 regulating certain tax incentives was published in the Official Gazette no. 319 on 16th of April 2020.

On 16th April 2020, several tax incentives intended to support taxpayers were published In the Official Gazette, measures that were previously officially announced by the National Agency for Fiscal Administration, as follows:

I. New procedure regarding VAT reimbursements

According to the new procedure, VAT reimbursement requests are to be solved with subsequent tax audit.

Nevertheless, the procedure is not applicable to:

a) VAT returns with refund option for which, until the date of entry into force of the aforementioned Emergency Government Ordinance, a tax audit inspection has already started;

b) VAT reimbursements requests submitted by large and medium taxpayers, which are to be settled with prior tax inspection if:

• • The taxpayer is registered in the tax records with criminal deeds;
• • If there are reasons to believe that the reimbursement is unlawful;
• • If the voluntary liquidation process or the insolvency procedure are initiated, except for those for whom a reorganisation plan was confirmed.

c) VAT reimbursement requests submitted by other taxpayers than those mentioned at let. b) above if:

• • The taxpayer submits the VAT reimbursement request immediately after the registration for VAT purposes;
• • The total reimbursable amount is related to more than 12 monthly reporting periods, respectively 4 quarterly reporting periods.

Note: For the reimbursed VAT amounts, the subsequent tax inspection is decided based on a risk assessment analysis.

II. Tax incentives in the area of sponsorship

Micro-enterprises performing sponsorship actions for the benefit of public institutions or for other public authority bodies may enjoy the tax credit of the 20% based on the sponsorship agreement, without the requirement for the beneficiary to be registered in the Registry of sponsorship beneficiaries.

III. Tax exemptions for certain benefits in kind

Benefits in kind granted to employees as a result of holding essential functions for the activity of a company being carried out, who are under preventive isolation at work during the state of emergency are not subject to personal income tax and social contributions.

IV. Tax treatment applicable to indemnities in sectors where tax incentives are available

Technical unemployment indemnities granted to employees according to Emergency Ordinance no. 30/2020, as well as indemnities related to free days granted to parents, as regulated by Law no. 19/2020 are not eligible for the existing tax incentives (e.g. income tax exemption, reductions / exemptions of pension fund contribution / health insurance contributions).

Note: The provisions are applicable to indemnities granted starting with April 2020.

V. Special provisions regarding gambling operators

Gambling operators regulated by Emergency Government Ordinance no. 77/2009 regarding the organization and operation of gambling may submit re-authorization requests of the activity within maximum 90 days from the date when the state of emergency ceased.

The respective operators are not liable to tax related to gambling licenses for the entire state of emergency.

VI. Exemptions from HORECA tax

HORECA taxpayers will not owe corporate income tax for the period when their activity was totally or partially interrupted during the state of emergency.

Eligibility conditions:

• • Totally or partially interruption of the activity and holding the emergency certificate issued by the Ministry of Economy, Energy and Business Environment;
• • The taxpayer is not undergoing insolvency.

VII. Postponement of the deadline for submitting the financial statements

The deadline for submitting the annual financial statements for FY 2019, respectively the annual accounting reporting at 31st of December 2019 is extended up to 31st of July 2020 inclusive.

VIII. Measures in the area of tax procedure

• • For late payment of the instalments related to the rescheduling plan until fulfilment of the 30 days after the elapse of the state of emergency state, no late payment interest and penalties are computed according to the Fiscal Procedure Code.
• • Enforcement measures are suspended or are not initiated, except for forced executions implemented further to definitive court decisions in the area of criminal law.
• • The statute of limitation period is suspended until the fulfilment of 30 days after the state of emergency ended.
• • The abovementioned provisions will cease in 30 days after the state of emergency ended.