Fiscal amnesty adopted for principal and accessory obligations: Emergency Government Ordinance no. 107/2024

The takeaway 

The Romanian Government has adopted Emergency Government Ordinance no. 107/2024 (GEO no. 107/2024), which introduces a series of measures:

• A fiscal amnesty for interest, penalties and all accessories related to outstanding principal budgetary obligations as of 31 August 2024 if debtors pay the principal debts and submit an annulment request by 25 November 2024. This applies to individuals and legal entities, both public and private, associations and other entities without legal personality, individuals conducting independent economic activities or practicing liberal professions, administrative-territorial units and subdivisions of Bucharest Municipality and public institutions.

• Cancellation of 50% or 25% of principal budgetary obligations and related accessories as at 31 August 2024 for individual debtors.

• A 3% deduction on annual profit tax and/or the microcompany income tax for the fiscal year 2024 for compliant taxpayers.

• Support for investments at the local public authority level by facilitating access to financing through European funds or treasury loans.

• Monitoring and reducing unnecessary or deferrable public expenditure categories.

In detail

The most important measures adopted through EGO no. 107/2024 are:

1. Cancellation of accessory budgetary obligations

A) Cancellation of accessory obligations related to principal budgetary obligations outstanding as at 31 August 2024:

Beneficiaries include individuals, legal entities, associations and other entities without legal personality, authorszed individuals and those practicing liberal professions, administrative-territorial units and subdivisions of Bucharest Municipality and public institutions meeting the following conditions:

• Principal budgetary obligations outstanding as at 31 August 2024 are settled by any means by the time the annulment request is submitted, but no later than 25 November 2024.

• Budgetary obligations with due dates between 1 September 2024 and the annulment request submission date, but no later than 25 November 2024, have been settled.

• All fiscal declarations are registered with the tax authorities by the time the annulment request is submitted, but no later than 25 November 2024.

• The annulment request is submitted after fulfilling the above conditions, but no later than 25 November 2024.

B) Cancellation of accessories related to principal budgetary obligations due before 31 August 2024 and settled by that date:

Interest, penalties and all accessories related to principal budgetary obligations due before 31 August 2024 and settled by that date are cancelled if all the following conditions are met:

• Principal budgetary obligations due before 31 August 2024 have been paid by that date.

• By the time of submitting the annulment request, but no later than 25 November 2024, all principal and accessory obligations managed by the central tax authority with due dates between 1 September 2024 and the submission date of the annulment request have been settled.

• All fiscal declarations are registered with the tax authorities by the time the annulment request is submitted, but no later than 25 November 2024.

• The annulment request is submitted by 25 November 2024 at the latest.

If accessory fiscal obligations related to principal budgetary obligations due before 31 August 2024 are settled after the entry into force of EGO no. 107/2024 (6 September 2024), they are cancelled and subject to refund.

C) Cancellation of accessories related to principal budgetary obligations declared through corrective statements

Interest, penalties and all accessories related to additional budgetary obligations declared by debtors through corrective statements, correcting principal budgetary obligations due before 31 August 2024, managed by the tax authority, are cancelled if all the following conditions are met:

• The corrective statement is submitted between 1 September 2024 and the submission date of the annulment request, but no later than 25 November 2024.

• All principal budgetary obligations identified in the corrective statement are settled by any means provided by law by the date of the annulment request submission.

• Principal and accessory obligations managed by the tax authority with due dates between 1 September 2024 and the submission date of the annulment request have been settled by the date of the annulment request submission.

• All fiscal declarations are registered with the tax authority by the time the annulment request is submitted, but no later than 25 November 2024.

• The annulment request is submitted by 25 November 2024 at the latest.

D) Cancellation of accessories related to principal budgetary obligations identified in tax assessment decisions

Interest, penalties and all accessory obligations related to principal budgetary obligations managed by the central tax authority with due dates before 31 August 2024 and identified in tax assessment decisions resulting from ongoing tax inspections by the entry into force of EGO no. 107/2024 are cancelled if all the following conditions are met:

• Differences in principal budgetary obligations identified in the tax assessment decision are settled by any means provided by law by the payment deadline stipulated in Art. 156, para. (1) of the Fiscal Procedure Code.

• The annulment request is submitted within 90 days of the notification of the tax assessment decision, under penalty of forfeiture.

The cancellation of accessory obligations under the conditions previously mentioned also applies to:

• Differences in principal budgetary obligations related to fiscal periods up to and including 31 August 2024 identified by the competent fiscal body through tax assessment decisions issued and communicated by the entry into force of EGO no. 107/2024, following a tax inspection.

• Principal budgetary obligations related to fiscal periods up to and including 31 August 2024, established by tax decisions issued ex officio by the fiscal body or through tax returns submitted late by the taxpayer between 1 September 2024 and the submission date of the annulment request.

• Other payment obligations identified in enforceable titles existing in the records of the tax authority as at 31 August 2024 and principal budgetary obligations established by bodies other than the tax bodies covering the period between 1 September and the submission date of the annulment request.

Taxpayers subject to a forthcoming tax inspection can submit corrective fiscal declarations within the first ten days as of the entry into force of EGO no. 107/2024, as these will be considered by the fiscal body, derogating from the provisions of the Fiscal Procedure Code.
Within ten days as of the entry into force of EGO no. 107/2024, fiscal bodies must notify debtors about any ongoing documentary checks.

If conditions specified by the law are met by the prescribed deadlines, taxpayers can communicate their intention to benefit from the amnesty for accessory obligations to the tax authority, followed by a request for annulment. This request can be registered only after fulfilling all legal conditions, but no later than 25 November 2024.

Fiscal/budgetary obligations that are subject to criminal proceedings, obligations established by final criminal judgments and amounts representing damages are not eligible for amnesty. Taxpayers must declare on their own responsibility in the annulment request that they are not in any of these situations.

2. Cancellation of 50% or 25% of principal budgetary obligations and related accessories for individuals

Individuals (including authorised individuals or those in liberal professions) with outstanding principal budgetary obligations as at 31 August 2024 can benefit as follows:

• For individuals with principal budgetary obligations less than RON 5,000: If 50% of the outstanding obligations as at 31 August 2024 have been settled by the annulment request submission date, but no later than 25 November 2024, 50% of the principal fiscal obligations and all related accessories are cancelled.

• For individuals with principal budgetary obligations over RON 5,000: If 75% of the outstanding obligations as at 31 August 2024 have been settled by the annulment request submission date, but no later than 25 November 2024, 25% of the principal fiscal obligations and all related accessories are cancelled.

If individuals have submitted notifications to apply for the amnesty, the central tax authority will issue a decision to postpone 50% or 25% of the outstanding principal budgetary obligations as at 31 August 2024.

If individuals settle the amounts representing 50% or 25% of the outstanding principal budgetary obligations as at 31 August 2024, along with interest, penalties and all accessories that can be cancelled, these amounts will be refunded.

3. Discounts of 3% on annual profit tax/microcompany income tax for compliant taxpayers

A 3% discount on annual profit tax and microcompany income tax for fiscal year 2024 or modified fiscal year beginning in 2024 applies to compliant taxpayers:

• The taxpayer has filed all required fiscal declarations.

• Annual profit tax/microcompany income tax for the fiscal year 2024 / modified fiscal year beginning in 2024 are fully settled by the legal deadlines.

• No outstanding fiscal/budgetary obligations exist by the legal deadline for filing declarations stating annual profit tax for fiscal year 2024, modified fiscal year beginning in 2024 or microcompany income tax for the fourth quarter of fiscal year 2024.

The discount is granted ex officio by the National Agency for Fiscal Administration through a decision if the conditions stipulated by the normative act are met.
The discount applies even if at the end of fiscal year 2024 or modified fiscal year beginning in 2024, taxpayers owe profit tax at the minimum level of turnover tax as per Art. 181 of Law no. 227/2015, with subsequent amendments and completions.

The amounts subject to the discount are not refunded but will be used to offset taxpayers’ fiscal obligations.

Source: [Emergency Government Ordinance no. 107/2024 on fiscal-budgetary measures in managing budgetary claims and the budget deficit for Romania’s consolidated general budget for 2024, and for amending and completing certain normative acts, published in Official Gazette no. 905, dated 6 September 2024]