Emergency Ordinance no.153/2020 for the establishment of fiscal measures to stimulate the maintaining / increase of equity, as well as for the completion of normative acts
In the Official Gazette no. 817 of September 4, 2020, it was published the Emergency Ordinance no. 153/2020 which provides incentive measures in order to increase equity, as well as the amendment of some normative acts.
According to this Ordinance, the measures will be implemented in the period 2021-2025 and will consist in the introduction of tax reductions for corporate income tax taxpayers, micro-enterprises taxpayers, as well as for taxpayers paying specific tax for certain activities, in case of fulfilling certain conditions related to equity, as follows:
- 2%, in case the accounting equity is positive for the year for which the tax is due and, for the taxpayers who have the obligation to establish the share capital, it is at the level of at least half of the subscribed share capital;
- between 5% and 10%, depending on the annual increase of the adjusted equity of the year for which the tax is due compared to the adjusted equity registered in the previous year and with the condition of fulfilling the provision from the above point;
- 3%, for the period 2022-2025, if there is an increase above the minimum level mentioned by law (between 5% - 20% depending on the year) of the adjusted equity of the year for which the tax is due compared to the adjusted equity registered in 2020 and if it simultaneously fulfills the condition set out in the first point above.
The above tax reductions can be applied cumulatively, if the conditions are met.
The provisions do not apply to taxpayers for whom the accounting regulations are issued by the National Romanian Bank, the Financial Supervisory Authority.
There are certain rules for determining the adjusted equity of the previous year, in case that in the year for which the tax is due reorganization operations are carried out, which take effect in that year.
In order to determine the tax reductions, the following aspects must be taken into account:
- for corporate income taxpayers, the reduction is applied to the annual profit tax of the year in which the conditions are met, and the amount of the reduction will be subtracted from it. The reduction will be applied to the tax determined after subtracting the tax credit, tax exemptions for reinvested profit, etc.
- For the micro-enterprises, the tax reduction is applied to the tax due for the entire fiscal year, and the value of the reduction is subtracted from the tax due for the fourth quarter. The amount that exceeds can be considered by adjusting the tax due for previous quarters, trough a rectifying statement;
- in the case of micro-enterprises that become corporate income taxpayers in the year for which the reduction applies, the reduction is applied to the micro-enterprises income tax cumulated with the corporate income tax, and is subtracted from the corporate income tax. If the reduction is higher than the corporate income tax, the difference is subtracted from the micro-enterprises income tax by submitting a rectification;
- for the taxpayers of specific tax for certain activities, the tax reduction is applied to the tax due for the entire fiscal year, and the amount of the reduction is subtracted from the tax due for the second half of that year. If the reduction is higher than the tax for the second half of the year, the difference is deducted from the tax for the first half of the year by submitting a rectifying statement;
- The taxpayers of specific tax for certain activities that also owe corporate income tax apply the reduction for both specific tax and corporate income tax.
The deadlines for submitting the tax statements and for paying the annual corporate income tax / micro-enterprise income tax for the fourth quarter / specific tax for the second half of the year are also modified, the new deadlines being June 25th of the following year, respectively 25th of the sixth month after the end of the modified fiscal year for corporate taxpayers who have opted for a modified fiscal year.
Clarifications are also brought to the Government Emergency Ordinance no. 33/2020 regarding fiscal measures and the amendment of some normative acts, respectively:
- for 2020, if the reduction for the payment by the due date of the quarterly profit tax / quarterly advance payments exceeds the value of the annual corporate income tax, the amount related to the reduction to be taken into account is set at the level of the annual corporate income tax value. The value of the annual corporate income tax is the profit tax after the subtracting of the fiscal credit, tax exemptions for reinvested profit, etc;
- in the case of taxpayers with modified fiscal year, the difference of corporate income tax due determined when finalizing the annual corporate income tax is considered corporate income tax for the last quarter, for which the reduction can be applied for the payment until the due date (5% / 10%) , according to the provisions of Ordinance no. 33/2020. The provisions also apply to the tax difference paid until the due date between December 26th, 2020 - February 25th, 2021. Taxpayers who filed their corporate income tax return Form 101 without the application of reduction can benefit of it by submitting a rectifying statement 101 (until now the Statement 101 has not been updated).
- the reduction is also granted for the corporate income tax due quarterly / the quarterly advance payment which is offset with the corporate income tax paid extra for previous periods.