In the Official Gazette (Part I) no.923 of 21 September 2022 was published ANAF Order no.1679 approving the Procedure for the redirection of corporate income tax/income tax on micro-enterprises.

General provisions:

According to the normative act, corporate income tax payers or microenterprise income tax payers, as the case may be, can order the redirection of some amounts of the tax due, according to the law, within 6 months from the legal deadline for the submission of the annual corporate income tax return, respectively the microenterprise income tax return for the fourth quarter.

The amount of corporate income tax or corporate income tax difference that can be redirected is calculated by subtracting the minimum amount established, according to article 25 paragraph (4) i) of Law no.227 /2015 on the Tax Code, as amended and supplemented, of the amounts representing sponsorship and/or patronage, private scholarships, granted to the beneficiary entities in the year for which the annual income tax return was filed, according to Article 25 paragraph (4 letter i) and t), and the amounts carried forward, as entered in the form 101 “Income tax return” of the respective year.

In order to determine the corporate income tax limit provided for in Article 25 paragraph (4 letter i) point 2 of Law no. 227/2015 on the Tax Code, as amended and supplemented, the amounts related to the tax credit and the exempted/reduced corporate income tax shall be deducted from it, in accordance with the provisions of the Order of the President of the National Tax Administration Agency no. 3.386/2016 for the approval of the model and content of the forms 101 “Corporate tax return” and 120 “Excise tax declaration”, with subsequent amendments and additions.

The amount of income tax on microenterprises or the amount of the difference in income tax on microenterprises that can be redirected is calculated by subtracting from the amount established, according to article 56 paragraph (11) of Law no.227/2015 on the Tax Code, as amended and supplemented, calculated for the entire tax year, the amounts granted to the beneficiary entities in that year, according to article 56 paragraph (11), (15) and (22) of Law no.227/2015 on the Tax Code, as amended and supplemented, and the amounts carried forward.

The obligation to pay the amount redirected from the corporate income tax, respectively from the income tax on microenterprises is incumbent on the competent tax authority.

Redirection of corporate income tax or microenterprise income tax for the sponsorship of non-profit legal entities, including religious units, may be made only if the beneficiary of the sponsorship is registered at the date of payment of the amount by the tax authority in the Register of entities/ religious units for which tax deductions are granted.

In the case of redirection of the corporate income tax, respectively of the income tax on microenterprises to the United Nations Children’s Fund – UNICEF and to other international organizations that carry out their activities according to the provisions of special agreements to which Romania is a party, there is no obligation to register the respective beneficiary entity in the Register of entities/units of worship for which tax deductions are granted.

For the purposes of this procedure, the beneficiary entity may be a non-profit legal entity, a religious institution, the United Nations Children’s Fund – UNICEF, any international organization operating under the provisions of special agreements to which Romania is a party, other beneficiaries provided for by Law no. 32/1994 on sponsorship, with subsequent amendments and additions, the Law on Libraries no. 334/2002, republished, with subsequent amendments and additions, and article 25 paragraph (4) c) of the National Education Law no. 1/2011, with subsequent amendments and additions, as well as beneficiaries of private scholarships, according to the law.

The deadline for the solution of requests for the redirection of corporate income tax/income tax on microenterprises is 45 days from the submission, according to Article 77 of Law No. 207/2015 on the Code of Tax Procedure, as amended and supplemented.

Please note that in the case of taxpayers who, at the date of filing the application, have not settled the debts representing the corporate income tax, respectively the microenterprises income tax, the 45-day period starts to run from the date of settlement of the debt.

Submission of applications for the redirection of corporation tax/microenterprise income tax:

Taxpayers exercise their option for corporate income tax/microenterprise income tax redirection by completing and submitting form 177 “Application for corporate income tax/microenterprise income tax redirection”.

The redirection option may be exercised for one or more entities, up to the amount established under point 1 paragraph (2) or (3), as the case may be.

Form 177 shall be submitted in compliance with the provisions of Article 79 paragraph (11) of Law no. 207/2015 on the Tax Procedure Code, as amended and supplemented.

Please note that in the case of taxpayers who are members of a tax group, the redirection can only be ordered by the responsible legal person.

If, after verifying the information, errors are found in the application submitted, the specialist department sends the taxpayer a notice on the redirection of corporate income tax/microenterprise income tax, detailing the errors identified and requesting taxpayers to correct them.

The notification shall be completed on the model provided in Annex no.3 to the Order and shall be communicated according to Article 47 of Law no.207/2015 on the Tax Procedure Code, as amended and supplemented.

The correction of the information in the application is made by submitting a correction form 177, which will include the corrected information requested in the notification, as well as all the correct information entered in the initial application.

If the taxpayer does not correct the incorrect information identified in the notification within the time limit specified in the notification, the application shall be closed.

The taxpayer may submit, within the legal deadline for submission, a new form 177 “Request for redirection of corporate income tax/microenterprise income tax”.

The Order states that, on a daily basis, the specialist department verifies the settlement of tax obligations representing corporate income tax / microenterprise income tax for taxpayers who have submitted correct redirection requests.

The specialist department draws up the list of corporate income tax/microenterprise income tax redirection, which includes taxpayers who have submitted correct applications and who do not have corporate income tax/microenterprise income tax liabilities, as well as the beneficiary entities.

The specialist department verifies whether the beneficiary entities that are obliged to register in the Register of entities/units of worship for which tax deductions are granted are included in this register.

Instructions for completing form 177:

The form is to be completed and filed by taxpayers who, according to the law, provide for the redirection of corporate income tax or microenterprise income tax, as the case may be, to carry out sponsorships and/or acts of patronage or the granting of private scholarships.

The application shall be submitted by electronic means of remote transmission, in accordance with the provisions of Article 79 paragraph (11) of Law No. 207/2015 on the Code of Tax Procedure, as amended and supplemented.

If the taxpayer corrects the submitted form, the corrective application shall be drawn up on the same model form, entering “X” in the special space provided for this purpose. In this case, the identification elements of the application to be corrected, i.e. the date and the registration number, are filled in.

Submission deadline:

a) within a maximum of 6 months from the legal deadline for filing the annual corporate income tax return, in the case of taxpayers liable for corporate income tax;

b) within 6 months of the legal deadline for filing the tax return for the fourth quarter, in the case of taxpayers paying income tax on microenterprises.

The form shall be submitted to the competent tax authority for the administration of tax claims due by the taxpayer/payer.

In the case of taxpayers who are members of a tax group, the form shall be submitted to the competent tax authority for the administration of tax claims due by the legal entity responsible for the group.