Emergency ordinance no. 69 of 14 May 2020
In this issue:
Emergency ordinance no. 69 of 14 May 2020 for the amendment and completion of Law no. 227/2015 regarding the Tax Code, as well as for the establishment of tax measures, published in the Official Gazette no. 393 of 14 May 2020
Under the Emergency Ordinance no. 69/2020 enacted on 14 May 2020 (the “Ordinance”), the Romanian Government has adopted a new tax amnesty for the cancellation of interest, penalties as well as other ancillary obligations ("ancillaries") imposed towards taxpayers and due before 1 April 2020, should they choose to settle the main tax obligations due to the state budget, until the date of submission of the request for cancellation of ancillaries.
The measure of cancelling ancillary obligations is a tax facility introduced for all categories of debtors, be they individuals or legal entities, entities without legal personality, individuals who carry out economic activities independently or who exercise free professions, administrative-territorial units or public institutions.
Moreover, the tax facility of cancelling ancillary obligations is applicable even in cases where the payment obligation is suspended, or the taxpayer benefits from the rescheduling of tax debt.
This amnesty is applicable to all fiscal obligations (including customs receivables), as well as to budgetary obligations, other than fiscal ones, the only exclusion being ancillaries related to budgetary obligations due to the budget of the European Union.
The procedure for implementing the fiscal amnesty introduced by the Ordinance will be determined by Order of the Ministry of Public Finance Ministerial, which should be published within 30 days as of the enactment of the Ordinance.
In order to be granted a tax amnesty, taxpayers must meet certain general conditions, as well as a number of special conditions, which vary according to each of the cases in which the cancellation of ancillary obligations is possible.
As a matter of principle, the request for cancelling the ancillaries must be submitted by December 15th, 2020 inclusively. At the date of submission of the request, the taxpayer must cumulatively meet the following general conditions:
- All main budgetary obligations that were outstanding as of 31 March 2020 (as recorded in the taxpayer’s file) have been paid;
- All (i) main and (ii) ancillary budgetary obligations, having their payment deadlines after 31 March 2020, have been paid;
- All tax returns having a filing deadline prior to filing the request for cancelling the ancillary obligations have been filed; alternatively, for periods in which no tax returns have been filed, the condition is considered fulfilled if the tax obligations have been established by decision of the central tax authority.
Cases provided by the Ordinance in which taxpayers can benefit from the cancellation of ancillary obligations
The Ordinance establishes certain distinct cases in which taxpayers can benefit from the complete cancellation of interest, penalties and all ancillary obligations related to tax debts representing principal fiscal and budgetary obligations, as follows:
1. Cancellation of ancillaries related to main tax obligations outstanding as at 31 March 2020
In order to benefit from the cancellation of such ancillaries and before filing the request for cancellation, the taxpayer has to pay the principal tax obligations and, also, to meet the general conditions set out above.
2. Cancellation of ancillaries related to main tax obligations arisen as a result of the correction of tax returns
Taxpayers have the possibility to benefit from the cancellation of the corresponding ancillaries in case they choose to declare/rectify and pay, no later than 15 December 2020, the main tax obligations which are due prior to 31 March 2020.
This facility also applies to the correction of errors under VAT returns filed as per the law.
3. Cancellation of ancillaries related to main tax obligations having due dates prior to 31 March 2020, which were settled prior to this date
Ancillaries related to such main tax liabilities are cancelled in case the taxpayer: (i) settles all tax liabilities due after 1 April 2020, (ii) has properly filed all tax returns and (iii) files the cancellation request no later than 15 December 2020.
4. Cancellation of ancillaries related to main tax obligations due prior to 31 March 2020, imposed under tax decisions issued as a result of tax audits ongoing as at 14 May 2020
The facility applies to ancillaries related to main tax obligations that are due, as per the law, prior to 31 March 2020, which are to be imposed under tax decisions to be issued as a result of tax audits ongoing at the date of entry into force of the Ordinance. For this purpose, the Ordinance also considers the tax decisions pertaining to tax audits that have ended prior to 14 May 2020 and have not been communicated prior to this date.
In order to benefit from this facility, the taxpayer must pay the main tax obligations set under the tax decision within the legal deadline for its payment, as well as to file the cancellation request with the tax authorities within 90 days as of receiving the tax decision.
5. Cancellation of ancillaries related to rescheduled tax obligations
Taxpayers who benefit from the rescheduling of tax obligations may benefit from the facilities provided by the Ordinance in case the rescheduling is finalized prior to 15 December 2020.
In case the instalments of the rescheduled tax debt paid after the enactment of the Ordinance and prior to filing the cancellation request also include ancillary tax obligations, such ancillaries shall be reimbursed by the tax authority. If the rescheduling relates solely to ancillary tax obligations, taxpayers may request the cancellation for all such ancillaries due after 14 May 2020.
6. Cancellation of ancillary liabilities related to main tax obligations owed to the local budgets and due as at 31 March 2020
The Ordinance provides that the applicability of such facility for tax liabilities owed to the local budgets is optional and must be set under a local council decision. The local council decision approving such facility shall also provide the procedure for its application.
7. Cancellation of ancillaries in case of taxpayers who request refunds and/or reimbursements of tax receivables
Taxpayers who request refunds / reimbursements which are not settled prior to 15 December 2020, may also benefit from the facility, irrespective of the date of issuance of the decision whereby the refund / reimbursement is rejected.
In such case, the ancillaries to the main budgetary obligations, which are not offset as a result of the rejection of the refund / reimbursement request, shall be cancelled if the main tax obligations are paid within 30 days as of receiving the decision whereby the refund / reimbursement is rejected.
How does the above influence the activity of your company?
We recommend that you consider whether your company is in one of the situations described above, to determine the possibility to benefit from the tax amnesty.
Our team is happy to assist you with the analysis (including tax healthchecks) and the assessment of the potential cash benefits.