Tax Flash no. 40

The Government Emergency Ordinance no. 181/2020 regarding some fiscal-budgetary measures, for amending and completing some normative acts, as well as for extending certain deadlines

In the Official Gazette no. 988 from October 26^th 2020, was published the Emergency Ordinance no. 181/2020 that entered into force on the same day.

The most important amendments provided are the following:

• The conditions for granting the schedule for payment for budgetary fiscal obligations whose due date/term of payment was meet after the date of declaring the state of emergency and are unpaid on the date of issuing of the tax certificate;

• The payment instalment shall be granted for all tax obligations entered in the tax certificate, for a period not longer than 12 months.

• In order to benefit from the schedule for payment, the main conditions that the debtor must meet are:
  • to submit an application to the tax authority, until December 15^th 2020 inclusive, under the sanction of losing the right. Upon request, the debtor may attach the staggered schedule containing the proposed amount of the staggered rates;
  • not being in bankruptcy proceedings;
  • not being in dissolved;
  • not registering outstanding fiscal obligations on the date of declaring the state of emergency that are not paid on the date of issuing the tax certificate;
  • his liability has not been established according to the legislation on insolvency and/or joint liability.
• It is mentioned that the procedure for granting the schedule for payment by the central tax authority will be approved by order of the President of the National Agency for Tax Administration within 15 days of the date of entry into force of this Emergency Ordinance.
• Taxpayers obliged to pay specific tax do not owe the specific tax for the period between the date of entry into force of this emergency ordinance and December 31^st,2020 inclusive. We mention that the ordinance also provides the method of recalculating the specific tax.
• In the case of taxpayers paying the tax on buildings, the local councils, respectively the General Council of the Municipality of Bucharest may adopt decisions until December 2^nd, 2020 regarding the following:
  • reducing the annual tax on buildings with a rate of up to 50%, for non-residential buildings, whether during the period for which the state of emergency and/or alert was declared, the owners or users of the buildings were obliged to completely interrupt their economic activity or have the certificate for emergency situations certifying the partial interruption of the economic activity;
  • exemption from the payment of the monthly tax on buildings due by concessionaires, tenants, holders of the right to administer or use a building which is public or private property of the state or of the administrative-territorial units, as the case may be, whether during the period for which it was declared the state of emergency and/or alert as a result of the effects of the SARS-CoV-2 coronavirus epidemic, the users of the buildings were forced to completely interrupt their economic activity;
• In the case of adopting decisions to grant the tax discount on non-residential buildings, taxpayers will have the obligation to submit, until December  21^st 2020 inclusive, to the competent local tax authority  an application and a statement on their own responsibility;
• In the case of taxpayers that have paid the annual building tax due for the year 2020, until September 30^th,2020, they can request the refund of the tax, within the limitation period of the right to claim the refund;
• In the case of taxpayers that have paid the monthly building tax due for the period in which the state of emergency and/or alert was declared, they may request the refund of the tax, within the limitation period of the right to claim the refund;
• In the case of taxpayers benefiting from a discount of the annual tax on buildings by up to 50%, for non-residential buildings, the annual tax on buildings shall be calculated by applying the discount rate on the annual tax due for 2020.
• The contraventions applied to economic operators in case of not complying with the obligation to ensure the remote connection of electronic fiscal cash registers, in order to transmit fiscal data to the National Agency for Fiscal Administration, are suspended until December 31^st,2020;
• Amending certain articles of the Government Emergency Ordinance no. 6/2019 as follows: the debtor that intends to restructure the budgetary obligations has the obligation to notify the competent fiscal authority about his intention between August 8th  – October 31st 2019 and between  February 1st – September 30th 2020, as well as between November 1st, 2020 – March 31st 2021, under sanction of losing the right to benefit from the restructuring procedure and should address to an independent expert in order to prepare a restructuring plan and the prudent private creditor test. Also, is extended the deadline for requesting the restructuring of budgetary obligations, therefore the request can be submitted until June 30^th ,2021, under the sanction of losing the right;
• Is considered a deductible expense, the value of medical tests for the diagnosis of COVID-19 infection performed for the taxpayer, with the scope of detecting and preventing the spread of the SARS-CoV-2 coronavirus, to ensure the continuity of the activity, individually or in a form of association, during the state of emergency or alert;
• At the same time, the value of the expenses incurred by the employer/payer with performing medical tests to diagnose COVID-19 infection, on his initiative, for individuals that receive income from salaries and assimilated to salaries, in order to detect and prevent the spread of SARS-CoV-2 coronavirus, to ensure the continuity of the activity in conditions of safety and health at work, during the state of emergency or alert, represent non-taxable income and are not included in the monthly basis for calculating social security contributions.
• Is extended until December 25^th,2020 inclusive, the term from which the tax authority calculates interest and penalties for late payment and can start the foreclosure procedure for the fiscal obligations due starting March 21^st,2020.
• Is extended until January 25^th,2020 inclusive, the term until are applied the derogating measures for solving the VAT returns with negative amounts by subsequent inspection and is suspended the calculation of ancillaries and the validity is maintained in case of late payment of the instalments included in the schedule for payment.