News and developments
NEW TAX ALLEVIATION MEASURES UNDER THE PANDEMIC
Tax facilities included in the Romanian Fiscal Code
Part of the alleviation measures were adopted through Government Ordinance no. 8/2021 amending Law no. 227/2015 on the Romanian Fiscal Code (the “Fiscal Code”) and amend the possibility of tax rescheduling in specific cases, as well as certain deduction threshold, as detailed below.
Tax rescheduling in case of transfers of assets, tax residency and / or economic activity
Taxpayers transferring abroad their assets or tax residency from Romania or the business conducted through a Romanian permanent establishment have been previously entitled to a 5-year rescheduling of the corporate tax triggered by such transfer, under specific circumstances. Nonetheless, such rescheduling was subject to the general conditions set forth by Law no. 207/2015 on the Romanian Fiscal Procedure Code (the “Fiscal Procedure Code”).
The new ordinance removes this case of rescheduling from the general regime and regulates specific conditions in relation thereto, such as the taxpayer’s obligation to set up a bond only in case an actual and provable risk concerning debt recovery is found upon the preliminary analysis (fiscal debts overdue for more than 90 days and / or exceeding RON 20,000).
Increase of certain tax deduction
The deductibility threshold for the adjustments of impaired accounts receivables is set to increase from 30% to 50%, such amendment to become applicable as of January 1, 2022.
Tax facilities included in the Romanian Fiscal Procedure Code
The set of amendments aimed at establishing / refining fiscal facilities is complemented through Government Ordinance no. 11/2021, which sets forth inter alia a simplified regime of tax rescheduling and makes permanent the VAT reimbursement with subsequent tax inspection.
The simplified regime of tax rescheduling
The new regime is applicable for tax debts that are overdue for up to 12 months and the amount whereof is higher than the following thresholds:
- RON 500, in case of individuals;
- RON 2,000, in case of consortia;
- RON 5,000, in case of legal entities.
- the taxpayer does not undergo bankruptcy or dissolution procedure;
- there is no final decision on the taxpayer’s joint responsibility under the insolvency or tax rules or, in case of such a final decision, the amounts for which the responsibility was established were paid;
- all tax returns were duly submitted.
- the taxpayer’s fiscal record discloses deeds sanctioned as crimes;
- there is a risk of undue reimbursement, to be assessed based on the criteria expressly stated in the enactment;
- the taxpayer undergoes voluntary dissolution or insolvency procedure, except where a reorganization plan was confirmed;
- the VAT refund is claimed through the first return submitted following registration for VAT purposes;
- in case of taxpayers other than large or medium size taxpayers, the balance of VAT claimed for reimbursement pertains to a number of periods higher than the number of reporting periods used during a 12-month interval.
- tax debts mature by March 31, 2020 inclusively, which have been established through tax decisions issued following tax inspection or following the audit of the personal fiscal status, where such inspection / audit commenced after May 14, 2020 and ended before March 29, 2021;
- tax debts mature by March 31, 2020 inclusively, which have been established through tax decision issued following documentary audit, in case such decision is notified between May 14, 2020 and January 31, 2022.