GEO 1 dated 9 January 2020

In brief 

Government Ordinance 1/2020, issued under emergency procedure (GEO 1), has been published in January. The Ordinance is intended to correct several fiscal and budgetary measures adopted in various items of legislation.

In detail

I. Tax on assets

The section of GEO 114/2018 (GEO 114) that used to regulate the tax on assets was repealed on the date GEO 1 entered into force. The tax on assets is no longer due as of 2020, with the tax on assets due for 2019 to be reported and paid by 25 August 2020 inclusive. 

II. Electricity, natural gas and exploitation of natural resources

Law 123/2012 on electricity and natural gas has been amended as follows:

• The period 1 March 2019 to 28 February 2022 during which the electricity supply to household consumers was performed under terms regulated by the National Regulatory Authority for Energy (ANRE), in accordance with GEO 114, is now limited to 31 December 2020;

• ANRE is now required to publish the rates charged by last-resort suppliers to household consumers during the period up to 31 December 2020;

• Producers are required to deliver to last-resort suppliers, until 31 December 2020, the electricity necessary to cover the consumption of household consumers for which regulated rates apply, in accordance with ANRE regulations;

• Until 31 December 2020, producers, including their subsidiaries and / or affiliates of the same economic interest group carrying out both extraction activities and sales activities of natural gas extracted in Romania, have to sell natural gas quantities resulting from the current domestic production activity and / or from storage to suppliers of household consumers and of thermal power producers, at RON 68 / MWh, only in respect of the amount of natural gas used for the production of thermal power in co-generation plants and thermal power plants, intended for household consumption. The measure only applies if the average market price, as monitored by ANRE, by taking into account the amounts and prices recorded for each market segment, is above RON 68 / MWh;

• Differences in the suppliers’ acquisition costs in the years 2018 and 2019 not recovered through the prices charged will be recovered by 30 June 2020, according to ANRE regulations;

• For household consumers, natural gas is supplied at the regulated rate and under framework agreements until 30 June 2020;

• Effective as of 1 January 2020, fees and contributions representing ANRE’s own revenue, including fees paid by electricity and natural gas licence holders (currently 2% of their turnover from the activities covered by such ANRE licences), will be established annually under an ANRE Order to be published in the Official Monitor.

III. Private pension funds

Law 411/2004 on private pension funds has been amended as follows:

• Pension fund participants can no longer opt through individual application after five years of participation to transfer their contributions to the public pension system, as previously allowed under GEO 114;

• After joining or being assigned to a pension fund, participants are required to contribute and cannot withdraw from the private pension fund scheme throughout the period for which they are liable to pay their contribution to the public pension system, until their entitlement to private pension becomes active;

• The amount of the minimum share capital required to manage a private pension fund has been changed from a percentage regulated under GEO 114 to the fixed amount of the RON equivalent of EUR 4 million, calculated based on the exchange rate issued by the central bank BNR as at the set-up;

• The period for which the Private Pension System Supervisory Committee (the Committee) is to calculate the average weighted rate of return of all private pension funds and the individual rate of return of each fund has been increased to 60 months;

• Each private fund manager is to calculate, on the last day of each quarter, the rate of return of the pension fund for the previous 60 months and communicate it to the Committee on the same day;

• The operating fees set by the Financial Supervisory Authority (ASF) and charged to managers of private pension funds cannot exceed 10% of the aggregate administration fees charged by the managers.

IV. Use of fiscal electronic cash registers

GEO 28/1999 has been amended by extending the deadline to 31 December 2020 for economic operators which supply goods or services through commercial vending machines which use bank card readers to equip these machines with fiscal electronic cash registers.  

Source: [Government emergency ordinance no. 1/2020 on several fiscal and budgetary measures and amending and supplementing items of legislation, published in Official Monitor no. 11 dated 9 January 2020].

Takeaway:

Under Emergency Ordinance 1 /2020:

• the tax on assets no longer applies as of 2020;

• the main changes concern shortening, to 31 December 2020, the period during which electricity-specific regulation apply; also, the contribution is to be annually determined under an ANRE Order;

• amendments have been brought concerning pension funds, mainly regarding the conditions and restrictions on participants;

• the deadline for implementing the use of fiscal electronic cash registers has been extended to 31 December 2020.