Government Emergency Ordinance no. 48/2020 on some financial-fiscal measures, in force since 16 April 2020

27 Apr 2020

In short

Government Emergency Ordinance (“GEO”) no. 48/2020 completes a series of legislative measures applicable on Romanian territory adopted as a result of the establishment of the state of emergency. 

In detail

The following legislation has been amended and supplemented:

Fiscal Code

The micro-company tax deduction for the amounts representing sponsorships granted to public institutions and authorities (including public administration specialist bodies), within the limit provided by the Tax Code, can be applied based on the sponsorship contract, without the obligation to register the beneficiary entities in the Register of cult entities/units for which tax deductions are granted.

No income tax is applied and the monthly basis for calculating compulsory social contributions does not include the benefits in kind granted to individuals who earn salary income and income treated as salary as a result of occupying positions considered essential by the employer for carrying out its activity, those in preventive isolation at work or in specially dedicated areas, for a period set by the employer.

Ethyl alcohol, alcoholic beverages and energy products that are the property of the state or that are subject to garnishment proceedings may be recovered. Thus, these excisable products that do not meet the legal conditions of marketing can be sold by the competent bodies to fiscal production warehouses only for processing, with the delivery being made on an invoice basis, at prices without excise duties. If these excisable products meet the legal conditions for marketing, they can be sold by the competent bodies to the trading economic operators, on an invoice basis, at prices that include excise duties. Excisable products that cannot be recovered will be destroyed in accordance with the law.

No fiscal facilities are granted (income tax payment exemption for the people provided in the Tax Code, art. 60, nor the facilities provided in the Tax Code, 138 ^ 1 and 154 paragraph (1) letter r)  for the unemployment benefit granted to employees from the unemployment insurance budget, for the allowance granted to other professionals from the state budget, during the temporary suspension of activity (according to GEO no. 30/2020) and for the allowance granted to parents for days off for childcare during the period when educational units are closed (according to Law no. 19/2020), as of April 2020.

The facility for import VAT deferment is granted, as established by GEO no. 33/2020, also for imports of protective mask production machines, during the state of emergency period and the following 30 days, and for completely denatured ethyl alcohol, used for the production of disinfectants only during the state of emergency period. For imports of completely denatured ethyl alcohol, only importers with an end-user authorisation according to the legal provisions, valid as at the date of import, benefit from the VAT deferment.

Government Emergency Ordinance no. 1/1999 on the state of siege and the state of emergency

Ethyl alcohol, alcoholic beverages and energy products confiscated, definitively requisitioned or which are subject to a garnishment procedure and which do not meet the legal conditions for marketing may be used by the competent bodies for tax production warehouses only for processing, with the delivery being made on an invoice basis, at excise-free prices. If these products meet the legal conditions for marketing, they are used by the competent bodies to the trading economic operators on an invoice basis, at excise prices. It will be possible to agree, with economic operators authorised for the denaturing of ethyl alcohol, service contracts for the denaturing of ethyl alcohol subject to confiscation or final requisition, and the resulting product sold in accordance with the law.

For the movement of confiscated excisable products, definitively requisitioned or subject to a garnishment procedure, the provisions of the Tax Code, Title VIII “Excises and other special taxes”, Section 16, regarding the movement and receipt of excisable products under the excise duties suspension regime, do not apply.

Excisable products confiscated or requisitioned that cannot be recovered will be destroyed in accordance with the law. Those acquiring excisable goods must meet the conditions set out in the Tax Code.

Recovery of excisable products: ethyl alcohol, alcoholic beverages and energy products, confiscated, permanently requisitioned or subject to a garnishment procedure is made according to that provided in the regulations on the manner and conditions of sale of goods entered, according to law, into state property.

Law no. 133/1997 on requisitions of goods and provision of services in the public interest

The list of products that can be requisitioned has been completed as follows: energy products, ethyl alcohol and alcoholic beverages, and any other goods considered a necessity during the state of emergency.

Government Ordinance no. 14/2007 for the regulation of the manner and conditions of sale of the goods entered, according to the law, into the state’s property

The regulation of the manner and conditions for recovering the goods entered, according to the law, into the state’s property during the state of emergency has been completed by introducing new chapters regarding:

  • the recovery of ethyl alcohol, alcoholic beverages and energy products; 
  • the free of charge assignment of such goods. 

Government Emergency Ordinance no. 33/2020 regarding some fiscal measures

During the state of emergency period, imports of fully denatured ethyl alcohol used for the production of disinfectants, importers holding an end-user authorisation under the Tax Code, Title VIII "Excise duties and other special charges", may benefit from deferred payment of VAT on import.

Government Emergency Ordinance no. 110/2017 on the Support Programme for Small and Medium Enterprises - IMM INVEST ROMANIA

The administration commission due to the National Credit Guarantee Fund for Small and Medium Enterprises (“FNGCIMM”) for the remuneration of the analysis, granting, monitoring and administration of guarantees, the level of which is established annually by order of the Minister of Public Finance, is supported from the budget, through the budget of the Ministry of Public Finance under the state aid scheme associated with this programme.

After the termination of the state aid scheme, the administration commission is due to FNGCIMM by the programme beneficiaries.

Government Ordinance no. 77/2009 on the organisation and operation of gambling

By law, the organisation and operating licences for gambling that expire during the state of emergency are extended by 90 days from the state of emergency end date. Operators in the field may request re-authorisation of the activity no later than 90 days after that date. 

The obligations to pay the fees related to organisation licences and gambling exploitation authorisations have been suspended for the duration of the state of emergency. 

Law no. 170/2016 on specific tax for certain activities

For the year 2020, taxpayers obliged to pay the specific tax for certain activities do not owe the specific tax for the period in which they interrupt the activity totally or partially, during the period of the declared state of emergency. Such taxpayers recalculate the specific tax for 2020 by dividing the annual specific tax by 365 days and multiplying it by the number of days corresponding to the period in the calendar year in which they performed the activity.

In order to benefit from the above provisions, taxpayers need to fulfill cumulatively the following conditions:

  • the taxpayers interrupt totally or partially the activity during the state of emergency and hold the certificate for emergency situations issued by the Ministry of Economy, Energy and Business Environment;
  • they are not insolvent according to the information available on the National Office of the Trade Register website.

Government Ordinance no. 10/2015 for the organisation of the fiscal vouchers Lottery

As of the date of entry into force of GEO no. 48/2020, the monthly and occasional draws of the fiscal vouchers Lottery are suspended. The date of draws resumption is to be approved by order of the Minister of Public Finance.

Accounting law no. 82/1991

The deadline for submitting the annual financial statements for the financial year 2019, i.e. the accounting reports as at 31 December 2019, has been postponed to 31 July 2020.

Fiscal Procedure Code

Requests for value added tax (VAT) refunds will be solved with subsequent tax audit, which will be decided based on a risk analysis.

This procedure shall not apply to the following VAT refund requests:

  • Where the tax inspection had started prior to the date of entry into force of GEO no. 48/2020;
  • For VAT refund requests submitted by large and medium-sized taxpayers:
    • having deeds sanctioned as crimes entered in the fiscal record;
    • NAFA finds the risk of undue reimbursement;
    • the voluntary liquidation procedure/insolvency procedure has been initiated, except for those for which a reorganisation plan was confirmed, under the conditions of the special law.
  • Claims submitted by taxpayers other than large and medium-sized taxpayers in any of the above situations, or:
    • submitting a request for VAT refund after registration for VAT purposes;
    • the balance of the VAT amount claimed for reimbursement comes from more than 12 monthly reporting periods, i.e. four quarterly reporting periods.

The measure applies to VAT refund applications submitted during the state of emergency and for 30 days thereafter, including VAT refund claims pending and for which the VAT Refund Decision has not been issued by the date of entry into force of this GEO no. 48/2020, with the exceptions previously provided.

The garnishment by summons and sale of goods by auction of the budgetary receivables are suspended or do not begin (additional measure to the provisions of GEO no. 29/2020).

The limitation periods for the right of the tax authority to establish tax claims and to request garnishment, and for the taxpayer to request the refund of tax claims, is suspended or does not start until 30 days after the end of the state of emergency period.

Interest and penalties are not calculated and are not due for late payment of instalments in the rescheduled instalments, the competent tax authority restores the reschedules and the new schedule is communicated to the debtor by decision. No outstanding obligations will be considered. The conditions for maintaining the validity of the payment instalments granted are suspended until 30 days after the end of the state of emergency.

Source [Government Emergency Ordinance no. 48/2020 regarding some financial-fiscal measures, published in the Official Gazette no. 319 of 16 April  2020]

The Takeaway

We summarise some of the main measures adopted by GEO no. 48/2020:

Micro-enterprises may deduct sponsorship amounts given to public institutions and authorities (including specialist bodies of public administration) from the tax due, within the limit provided by the Tax Code, only on the basis of sponsorship contracts, without the obligation to register the beneficiary entity in the Register of cult entities / units for which tax deductions are granted.

No income tax is applied and the monthly basis for calculating compulsory social contributions does not include benefits in kind granted to individuals who earn salary income and income treated as salary,  and who are in preventive isolation at work or in specially dedicated areas.

For the unemployment allowance, for the allowance granted to other professionals and for the allowance granted to parents for the days off necessary for child supervision, as of  April 2020, no tax facilities are granted.

Ethyl alcohol, alcoholic beverages and energy products confiscated, permanently requisitioned or subject to garnishment proceedings and which do not meet the legal conditions for marketing may be recovered by the competent bodies to tax production warehouses only for processing purposes. If they meet the legal marketing conditions, they can be sold to economic operators.

For the year 2020, taxpayers obliged to pay activity-specific taxes do not owe any such tax for the period in which they interrupt the activity totally or partially during the period of the declared state of emergency, under certain conditions.

The deadline for submitting the annual financial statements for the financial year 2019, i.e. the accounting reports as at 31 December 2019, has been postponed to 31 July 2020.

After the termination of the state aid scheme, the administration commission of the guarantees granted for the loans accessed through the Small and Medium Enterprises Support Program - IMM INVEST ROMANIA is due to FNGCIMM by the programme beneficiaries.

The value added tax requested for reimbursement will be paid to taxpayers following a tax inspection. 

The following are suspended or will not start until 30 days following the end of the state of emergency:

  • the garnishment by summons and sale of goods by auction of budgetary receivables;
  • the limitation periods for the right of the tax authority to establish tax claims and to request enforcement, as well as for the taxpayer to request tax refunds.

 

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