Tax & Legal Flash no. 21
25 May 2020
Law no. 62/2020 provides the following:
- Lessees that are economic operators, practitioners of liberal professions or private legal entities, whose activity has been interrupted or whose incomes / revenues have decreased by at least 15% in March 2020 compared to the average of the last calendar year, during the state of emergency may postpone on request, without the payment of interest and penalties, the payment of rent for the use of real estate registered as headquarters, office or housing.
- The payment of rents to the lessor will be made by the competent territorial fiscal body, in the lessor’s bank account at the request of the lessee.
- In order to benefit from the postponement of the rent payment, the lessees must make available to the competent territorial fiscal body any kind of justifying document attesting the impossibility of paying the rent within the period specified in the annex.
- The maximum value of the monthly rent that can be reimbursed by the Romanian state is 10,000 LEI for economic operators, for each location and 2,000 LEI for individuals for a single location.
- By derogation from the provisions of law 227/2015 on the Fiscal Code, in 2020 the income generated from the use of real estate obtained on the basis of lease / sublease or usufruct contracts is not considered taxable income. The taxpayers who will benefit from this provision are those who will reduce the value of the rent by at least 30% compared to the value of the rent related to February 2020. The period applicable to this tax exemption is the period for which the rent was negotiated, but no longer than December 31st, 2020.
- By derogation from the provisions of art. 170 of Law 227/2015, the rent that has been reduced by at least 30% compared to the equivalent period related to February 2020 will not enter the annual calculation ceiling of the social health insurance contribution.
- The above-mentioned provision - regarding tax exemption - will also benefit individuals who in 2019 made income from a number of more than 5 lease agreements and, starting with 2020, qualified this income in the category of income from independent activities.
- In the case of taxpayers paying profit tax and those who owe the income tax for micro-enterprises, the income from lease / sublease or usufruct agreements are taxable only in proportion of 80% of their value. The beneficiaries of these measures are those who reduce during 2020 the value of the rent by at least 20% compared to the value of rent for February 2020. The period that will benefit from this provision is the one for which the decrease rent has been negotiated, but no longer than December 31st, 2020.
- Economic operators, practitioners of liberal professions or private legal entities will be obliged to pay the monthly rents, the payment of which has been postponed by annex act between lessee and lessor, to the competent territorial fiscal body that paid these rents to the lessor, in equal tranches, after the period for which the payment was postponed, until December 31st, 2020.
- In case of non-fulfillment of the staggered payment obligation, the competent territorial fiscal body will proceed to the forced execution of the unrecovered receivables.
- The benefits provided shall be applied accordingly for the entire period of the state of emergency, as well as for the month following that in which the state of emergency ceased.