Tax reductions according to OUG 153 – applicable in 2022

The year 2022 is the first year in which companies that increase their own capital can benefit from reductions in business tax, a mechanism established by O.U.G (Emergency Ordinance) 153/2020.

We remind you that in the Official Gazette no. 817 / 04.09.2020 was published O.U.G. no.153 / 2020 for the establishment of fiscal measures to stimulate the maintenance / increase of the own capitals, as well as for the completion of some normative acts.

The normative act reduced the taxes for the company and extended the deadlines for submitting the afferent declarations.

Companies that benefit from these tax reductions must complete and submit D100 by June 25, 2022.

In this sense, ANAF updated D100 for companies with positive capital that benefit from the bonuses granted by OUG 153/2020.

Thus was published in the Official Gazette (Part I no. 178) of February 23, 2022, ANAF Order no. 237 on amending and supplementing OpANAF no. 587/2016 for approving the model and content of the forms used to declare taxes and fees with self-imposition or withholding tax regime. We specify that the intelligent PDF of form 100 was published on the ANAF website on February 24, 2022.

This means that the new form will be able to include tax cuts granted as an incentive to increase equity.

Tax reductions according to OUG 153/2020

Taxpayers paying profit tax, regardless of the declaration and payment system provided in Article 41 of the Fiscal Code, taxpayers paying income tax on micro-enterprises according to Title III of the Fiscal Code, as well as taxpayers falling under the provisions of Law no. 170/2016 regarding the activity-specific tax, with the subsequent completions, benefit from reductions of the annual profit tax / income tax of micro-enterprises / activity-specific tax, as follows:

1. 2%, if the accounting equity, presented in the annual financial statements, respectively in the annual accounting reports for the permanent establishments of the legal persons resident in EEA member states, in the year for which it owes the tax, is positive.

            For the taxpayers who, according to the legal provisions, have the obligation to establish the share capital, the accounting own capital must fulfill at the same time the condition of being at the level of a value at least equal to half of the subscribed share capital.

1. b) if it registers an annual increase of the adjusted equity of the year for which it owes the tax compared to the adjusted equity registered in the previous year and at the same time fulfills the condition provided at let. a), the discounts have the following values:

Tax reduction rate / Adjusted annual equity growth intervals:

2022. 3%, daca inregistreaza o crestere over nivelul prevazut la alineat (4) a capitalului propriu ajustat al anului pentru care datoreaza impozitul fata de capitalul propriu ajustat inregistrat in anul 2020 si daca indeplineste concomitent conditia prevazuta la litera  a). Prevederile prezentei litere se aplica incepand cu anul 2022, respectiv incepând cu anul fiscal modificat care incepe in anul 2022.

According to paragraph 4 mentioned, in application of the provisions of paragraph 1 letter c), the percentage increase of the adjusted equity of the year for which it owes the tax compared to the adjusted equity registered in 2020 has the following values:

The adjusted equity includes the following elements presented in the annual financial statements / annual accounting reports:

1. a) paid-in subscribed capital / endowment capital;
2. b) the patrimony of the directorate;
3. c) public patrimony;
4. d) private patrimony;
5. e) the patrimony of the national research-development institutes;
6. f) capital premiums;
7. g) the legal, statutory or contractual reserve and other reserves constituted from the net profit as a result of the decision of the shareholders / associates or according to the legal provisions;
8. h) the net carried forward result – credit balance, representing the positive difference between credit and debit balances.

Application of facilities:

In the case of corporate tax payers:

– the percentage related to the tax reduction is applied to the annual profit tax of the year in which the conditions provided in paragraph (1) of the O.U.G. are met, and the amount of the resulting reduction is deducted from it;

– the annual profit tax represents the profit tax after deducting the external tax credit, the exempt or reduced profit tax, the amounts representing sponsorship and / or patronage, private scholarships, within the limit provided by law, as well as the acquisition cost of electronic cash registers fiscal.

For micro-enterprise income taxpayers:

– the percentage related to the tax reduction is applied to the tax due for the entire fiscal year, and the value of the resulting reduction is deducted from the tax related to the fourth quarter;

– if the amount of the reduction is higher than the tax related to the fourth quarter, the difference that has not been deducted from the tax related to the fourth quarter is deducted from the tax related to the previous quarters, by submitting a rectifying declaration.

For micro-enterprises that become corporate taxpayers in the year for which the discount applies:

– the percentage related to the tax reduction is applied on the income tax of micro-enterprises added to the profit tax, and the value of the resulting reduction is deducted from the profit tax, according to the provisions applicable to the payers of the profit tax;

– if the amount of the reduction is higher than the profit tax, the difference that has not been deducted from the profit tax is deducted from the income tax of the micro-enterprises, by submitting a rectifying declaration.

For specific taxpayers:

– the percentage related to the tax reduction is applied to the tax due for the entire fiscal year, and the value of the resulting reduction is deducted from the tax due for the second semester;

– if the value of the reduction is higher than the tax related to the second semester, the difference that has not been deducted from the tax related to the second semester is deducted from the tax related to the first semester, by submitting a rectifying declaration;

– the payers of specific tax to some activities that also owe profit tax apply the reduction both for the specific tax according to the regulations applicable to the payers of specific tax, and for the profit tax according to the provisions applicable to the payers of profit tax.

The deadlines for submitting the declarations and for paying the tax, during the application of these facilities:

• the deadline for submitting the annual declaration regarding the profit tax and the payment of the profit tax related to the respective fiscal year is until June 25 inclusive of the following year, and for the taxpayers who fall under the provisions of article 16 paragraph (5) of the Fiscal Code until the 25th of the sixth month inclusive from the end of the modified fiscal year;
• the deadline for submitting the declaration related to the fourth quarter and the payment of the income tax on micro-enterprises related to this quarter is until June 25 inclusive of the following year;
• the deadline for submitting the declaration for the second semester and the payment of the specific tax for this semester is postponed until June 25 inclusive of the following year

Registration in the accounting of the bonus according to OUG 153/2020:

Based on OUG 153/2020, companies with positive and growing capital can benefit from a bonus for calculating the micro-enterprise income tax / profit or specific, for the whole year 2021, which they will reflect in the last quarter of the year.

This bonus can be reflected in the accounting in 2 variants:

1. the exact amount due (reduced) is recorded on the expense

For example, for a micro-enterprise, if the amount after applying the reduction is 1,000 lei, then the note is registered in December 2021:

698 Income tax and other charges not included in the above items = 4418 Income tax 1,000

1. the full amount is recorded first on the expense and then separately the reduction

For example, if the full amount is 1,200 lei and the discount is 200 lei, the grades are:

698 Income tax and other charges not included in the above items = 4418 Income tax 1,500

698 Income tax and other charges not included in the above items = 4418 Income tax -50

Legal basis:

• Fiscal Code (approved by Law no. 227/2015, published in the Official Gazette no. 688 of 10.09.2015), with subsequent amendments and completions;
• Fiscal Procedure Code (approved by Law no. 207/2015, published in the Official Gazette no. 547 of 23.07.2015), with subsequent amendments and completions;
• Emergency Ordinance 153/2020 for the establishment of fiscal measures to stimulate the maintenance / increase of equity, as well as for the completion of some normative acts;;
• ANAF order 237/2022 amending and supplementing the ANAF President order No. 587/2016 approving the model and content of the forms used for the declaration of taxes and duties with a self-taxation or withholding tax regime.