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The Emergency Ordinance no. 48/2020

In this issue:

Emergency ordinance no. 48 of 16 April 2020 regarding financial-fiscal measures, published in the Official Gazette no. 319 of 16 April 2020


Micro-enterprise income tax

The micro-enterprises will be able to grant sponsorships to public institutions and authorities, including specialized bodies of public administration and they will be able to deduct the related amounts from their income tax due (within the legal limits) without being necessary for the beneficiaries to be registered in the Register of entities for which the tax deductions are granted.


Gambling operators

During the state of emergency, the payment obligations related to the licenses to operate traditional gambling are suspended. If they are paid within 30 working days from the end of the decreed state of emergency, no sanctions will be imposed.


Tax on specific activities

The taxpayers obliged to pay the tax on specific activities, according to Law no. 170/2016, for the year 2020, do not have to pay the specific tax for the period during which they interrupt the activity totally or partially during the period of decreed emergency state. The ordinance sets out the computation of the final tax due, as well as the conditions that taxpayers must fulfill to qualify for the exemption.


Submission of financial statements

The submission of the annual financial statements related to 2019, respectively of the annual accounting reports completed on December 31, 2019, is extended until July 31, 2020 inclusive.


VAT deferment in customs

Taxable persons VAT registered based on art. 316 of the Fiscal code will not effectively pay the VAT in customs for the imports of medicines, protection equipment and machines for the production of protection masks, other devices or medical equipment and sanitary materials which may be used for preventing, limiting, treating and combating COVID 19 for the period of emergency state and in the following 30 calendar days from the moment the emergency state stops.

Taxable persons VAT registered based on art. 316 of the Fiscal code which hold a final user authorization will not effectively pay the VAT in customs for the imports of denaturized ethylic alcohol used to produce disinfectants during the period of emergency state.


VAT refund

During the period of state of emergency and during the following 30 days as of the date the emergency state stops the VAT refund will be granted subject to a subsequent VAT audit.

These provisions are not applicable in the following cases:

1. If a tax inspection started before the date of entry into force of this emergency ordinance (16 April 2020);

2. For large and mid-sized taxpayers:

  • If they have criminal offences written in their tax record;
  • If there is a risk of an undue refund;
  • If they are placed in voluntary liquidation or insolvency without a confirmed reorganization plan;

3. In case of other taxpayers:

  • If they have criminal offences written in their tax record;
  • If there is a risk of an undue refund;
  • If they are placed in voluntary liquidation or insolvency without a reorganization plan;
  • If it is the first VAT refund request;
  • If the VAT refundable amount derives from more than 12 monthly reporting periods/4 quarterly reporting periods.

The VAT audit is decided based on a risk analysis.


For excise and global trade, the main changes concern:

The list of medical equipment, testing kits, sanitizers, for which the importers can benefit of deferral in payment of VAT at importation has been extended with several new products (e.g. ethyl alcohol completely denatured, based on an end-user license (CN code 2207 20 00), production equipment for protection masks (CN code 8479 50 00)). 

The most important change concern the permission to denature ethyl alcohol given to tax warehouses authorized for the production of alcoholic beverages based on simplified request.  This is valid for the entire duration of the emergency state (and 15 days later). 


Provisions regarding payment of rescheduled tax liabilities and enforcement

It is mentioned that for the late payment of installments related to rescheduled tax liabilities, no late payment interest and penalties shall be computed until the expiry of the 30 days term after the end of the emergency state.

All measures of enforcement of budgetary liabilities, by summons and sale at public auction, are suspended or are not commenced until the expiration of the 30 day term after the end of the emergency state , except for the recovery of budgetary liabilities provided under definitive court decisions issued in criminal matters, where such liabilities have arisen as a result of committing criminal offences.


Exemption from paying income tax and social security charges for certain benefits in kind

During the emergency state, the benefits in kind granted by employers/ payers to employees considered to have essential roles and whom are in preventive isolation at their work place or in special zones where the external access is forbidden (e.g. medical personnel, etc.), will be exempt from income tax and mandatory social security charges (pension and health contributions due at the individual level and work insurance contribution due at the employer’s / payer’s level).


Taxation of the indemnities granted for paid parental leave and for technical unemployment

During the emergency state, the indemnities granted for technical unemployment and the ones granted for paid parental leave, from the unemployment and the state budget, will not be subject to regular tax incentives for individual tax payers. This provision will apply for the indemnities granted starting with the month of April 2020.

In a nutshell, the aforementioned indemnities received by employees working in industries such as IT, research and development, constructions or „HoReCa” (only for seasonal employees having determined contracts for up to 12 months) will be subject to income tax.

Moreover, for the constructions field, these indemnities will no longer benefit of the reduced quota for the pension contribution nor of the exemption for the health insurance contribution.

Therefore, taxes paid for these indemnities will be the standard ones applicable to salaries, meaning 10% income tax, 25% social security (pension) and 10% health insurance contribution.

Prepared by:
Costin Manta – Director, Indirect Tax
Mihai Petre – Director, Indirect Tax
Valentin Crețu – Manager, Direct Tax
Dan Răuț – Tax Manager, People Advisory Services
For additional information, please contact:
Alex Milcev – Partner, Tax & Law Leader Romania
Ernst & Young SRL
Bucharest Tower Center Building,
22nd Floor, 15-17 Ion Mihalache Blvd.,
Sector 1, 011171, Bucharest, Romania
Tel: (40-21) 402 4000, Fax: (40-21) 310 7124
Email: office@ro.ey.com
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