Tax News & Insight October 2020

On the website of the Ministry of Public Finance (www.mfinante.gov.ro) was published on 16th October 2020, the draft Emergency Ordinance on some fiscal-budgetary measures and for the amending and completion of some normative acts.

Thus, 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;

• Taxpayers obliged to pay specific tax do not owe tax for the period between the date of entry into force of this emergency ordinance and December 31^st 2020 inclusive. We mention that in the project is also provided the method of recalculating the specific tax.

• The local councils, respectively the General Council of the Municipality of Bucharest may adopt decisions until 2^nd December 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 event of adopting decisions to grant the tax reduction on non-residential buildings, taxpayers will have the obligation to submit, until December 21^st 2020 inclusive, to the local tax authority in whose territorial area is located the building, an application for granting the reduction and a statement on their own responsibility;

• In the case of taxpayers who 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 who 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 who benefit from the reduction of the annual building tax with a rate of up to 50%, for non-residential buildings, the annual building tax is calculated by applying the reduction rate and the discount up to 10%, as appropriate, on the annual tax due for the year 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;

• The debtor that intends to restructure the budgetary obligations has the obligation to notify the competent fiscal body about his intention between August 8^th  – October 31^st 2019 and between  February 1^st – September 30^th,2020, as well as between November 1^st, 2020 – March 31^st 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;

• Extension of 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 the state of emergency or alert, represent non-taxable income and are not included in the monthly basis for calculating social security contributions.

In the following period we will revert with more details regarding these measures, after are published in the Official Gazette.

This publication represents a briefing on proposed amendments to legislation in force, as they are released by authorities. They do not represent amendments of the Romanian legislation, but proposals made by the authorities according to their legislative policy. The amendment project of the normative act is published by public authorities only for discussion, in accordance with legislation in force. The project may suffer amendments from the time that is released to the public until its final form, as published in the Official Gazette.

BDO is not responsible for any loss as a result of actions made on information contained in this publication.