Fiscal-budgetary measures for economy support – approved by the government

We specify that during the government meeting on March 18, 2020 fiscal measures were approved to support the economy and companies affected by the spread of COVID-19 virus.

Therefore, the Ministry of Public Finance (MFP) will implement a multiannual program to support micro and small and medium-sized enterprises (IMM) to diminish the effects of the spread of COVID-19 virus, by guaranteeing credits, subsidizing interest for the mentioned financing, facilities for companies facing financial difficulties, extending the deadlines for submitting applications for restructuring the budgetary obligations and the payment deadlines for local taxes due to the population. More than that, the National Tax Authorities (ANAF) will suspend the withholdings for the population, and the IMMs that obtain emergency certificate will be able to postpone the payment of utilities and rents.

According to the normative act approved during the Government meeting of March 18, 2020, the Ministry of Finance will guarantee up to 80% of the value of the financing granted to IMMs.

The maximum value of the credits / lines of credit for financing the working capital granted to a beneficiary cannot exceed the average of the expenses related to the working capital of the last two fiscal years, within the limit of 5 million lei. For investment loans, the maximum value of the financing is 10 million lei.

At the same time the maximum cumulative value of state guaranteed financing that can be granted to a beneficiary within this facility is estimated at 10 million lei.

With regard to micro or small enterprises, the state will grant guarantees for loans / credit lines for financing working capital, excluding interest, commissions and bank charges related to the state guaranteed credit, at a maximum of 90%.

The maximum value of the financing will be of 500,000 lei for micro-enterprises and of 1 million lei for small-enterprises.

According to the communication from the institution’s website, the Ministry of Public Finance (MFP) will subsidize 100% of the interest for loans to be guaranteed, both for micro and small and medium-sized enterprises.

The interest will be subsidized from the moment of granting the loan until March 31, 2021.

We mention that the grant of the interest subsidy will be maintained in the years 2021-2022, starting with April 2021 only under the conditions in which the economic growth estimated by the National Commission for Strategy and Forecast (CNSP) for these years is below the level registered in 2020 and and is established by Government Decision.

The outstanding fiscal obligations and other budgetary debts will be paid from the credit / credit line for working capital awarded under the programe.

The loan guarantee period / credit lines for working capital will be 36 months with the possibility of 36 months extension. For the investment loans the period of 120 months was maintained.

The representatives of the MFP specify that the institution will cover from the budget and the administration commission to cover the costs of granting and monitoring the guarantees granted by the National Credit Guarantee Fund for IMMs (F.N.G.C.I.M.M.)

In addition, the Government has decided to suspend or not initiate the measures of forced execution by impeachment of the natural persons, with the exception of the forced executions which are applied for the recovery of the budgetary debts established by judicial decisions pronounced in criminal matters. The measures to suspend the forced execution by seizure on the amounts receivable representing income and money availability are applied, through the effect of the law, by the credit institutions or third parties, without other formalities from the tax authorities.

The normative act also stipulates that, during the period of the state of emergency, for the fiscal obligations due starting from the date of entry into force of the ordinance of urgency and unpaid until the cessation of the measures provided by the state of emergency, interest and late payment penalties are not calculated and due according to the Fiscal Procedure Code. This measure will be maintained for another 30 days after the cessation of the emergency.

Thus, the taxpayers are eligible to participate, for example, in the public procurement procedures carried out during this period or not to cancel their various authorizations.

Given the risk of financial imbalances in the national economy with impact on the taxpayers, it was considered necessary to extend the provisions regarding the deadlines for submitting notifications and the requests submitted by them in order to benefit from the restructuring measures of the budgetary obligations.

Therefore, it was decided to extend the deadline for submitting the restructuring intention until July 31, 2020 and to extend the deadline for submitting the restructuring application until October 30, 2020.

By way of derogation from the provisions regarding the Fiscal Code, the taxpayers who apply the system of tax return and payment on annual profit, with advance payments made quarterly, can make quarterly advance payments for 2020, at the level resulting from the calculation of the current quarter income tax. The calculation method is kept for all quarters of fiscal year 2020. Also, for those who have opted for a financial year other than the calendar year, it is applied for the advance payments due for the remaining quarters of the modified year ending in 2020, as well as for the calculation of those related to the quarters of the modified fiscal year that starts in 2020 and are included in the calendar year 2020.

Also, during the state of emergency, small and medium-sized enterprises owning the emergency situation certificate issued by the Ministry of Economy, Energy and Business Environment (MEEMA), benefit from the deferred payment for utilities – electricity, natural gas, water , telephone and internet services, as well as postponement of the rent for the building with a registered office and secondary offices.

By derogation from other legal provisions, in the ongoing contracts, other than those provided previously concluded by the small or medium-sized enterprises, which own the emergency situation certificate issued by the Ministry of Economy, Energy and Business Environment, may be invoked the force majeure against them, only after the attempt, evidenced by documents communicated between the parties by any means, including by electronic means, for renegotiation of the contract, in order to adapt their clauses taking into account the exceptional conditions generated by the state of emergency.

Furthermore, the Government has also decided to extend the payment term for the building tax, the land tax and the means of transport tax from March 31, 2020 to June 30, 2020, the period during which the bonuses established by the local councils will continue.

Under these conditions, the Government has approved that the payment of the rates and the interest related to the loans from revenues resulting from privatization granted by the MFP to the administrative-territorial units may be postponed, at their request, for a period of three months, from the date of entry into force of the present urgent ordering. For this period the MFP does not calculate interest and late interest. The facility is not granted for loans that are overdue.

Taking into account the need for the further acquisition of the necessary sanitary materials and equipment, the Ministry of Public Finance grants a loan from revenues resulting from privatization amounting to lei 1.15 billion to the National Company UNIFARM S.A., for a period of 6 months.

Starting with the date of entry into force of the emergency ordinance, during the period of emergency established in the territory of Romania, the main authorizing officers are authorized to carry out transfers of unused budgetary credits and commitment credits, as the case may be, in order to provide the necessary funds for the application, measures to combat and prevent the spread of infection with SARS-CoV-2 coronavirus.

The Ministry of Public Finance will approve the distribution of transfers of budgetary credits and commitment credits by quarter, based on the communications sent by the main authorizing officers of the transfers within 5 working days from the date of the execution.