Extension and suspension of fiscal incentives – OUG 19

In the Official Gazette (Part I) no. 315 of March 29, 2021, GEO no. 19/2021 was published regarding some fiscal measures, as well as for the modification and completion of some normative acts in the fiscal field.

According to the normative act, which applies in full from March 29 (date of publication), the main measures refer to:

  • Income tax – clarification of the distribution of expenses with the acquisition of electronic fiscal cash registers used by associations without legal personality, respectively deduction of the acquisition cost of electronic fiscal cash registers to be made by each partner from the annual tax, proportional to the quotaparticipation in the association.
  • Value Added Tax(VAT):
  • In order to correlate the legal provisions regarding the fiscal regime from the VAT perspective related to the free transfer of food for human consumption, it was necessary to amend the Fiscal Code, by eliminating the reference to foodstuffs within the provisions of art.286 paragraph (1) letter c) of the Fiscal Code which regulates the VAT tax base.
  • onsidering that the application of reverse charge by taxable persons trading in investment gold is regulated in art.331 of the Fiscal Code, which is already referred to in the second sentence of art.297 paragraph (3) of the Fiscal Code, for the corresponding correlation of the legal provisions, a technical correction was imposed on art. 297 paragraph (3) of the Fiscal Code.
  • introduction of exceptions to the submission of the recapitulative statement for transactions between taxable persons in Romania and taxable persons in the United Kingdom of Great Britain and Northern Ireland, given that the VIES system no longer provides information on registration for purposesVAT of taxable persons in the United Kingdom of Great Britain and Northern Ireland.Exceptions to the submission of recapitulative statements will not apply to operations involving the carriage of goods to / from Northern Ireland.

– a rapid legislative intervention on art. 303 of the Fiscal Code which reintroduced the provision regarding the exemption from the inclusion in the tax return of the amounts representing the VAT payable with which the fiscal authority registered at the credit table, according to Law no. 85/2014 .

  • The tax specific to some activities – in the context of maintaining the restrictions regarding the development of activities, for the taxpayers that fall under the incidence of Law no.170/2016 regarding the specific tax of some activities, some activities will be exempted from the specific tax, for the year 2021, for another period of 90 days calculated starting with April 1, 2021.
  • Suspension of the facilities regarding the early education – the application of the provisions of art. 25 par.(4) lit.i1) – i2) of Law no. 227/2015 on the Fiscal Code, taking into account the fact that these provisions do not ensure sufficient and unequivocal fiscal rules for the application of the regulated fiscal incentive for early education, leading to stability and legislative efficiency, which thus requires a revision of these regulations.

Taking into account the method of calculation and declaration of the due profit tax, respectively quarterly / annually, the suspension period starts with April 1, 2021 and ends on December 31, 2021. The same suspension period applies for taxpayers with modified fiscal year.

We mention that during the suspension period, in case of expenses for the operation of nurseries / kindergartens under the administration of taxpayers, the fiscal regime applicable before the entry into force of Law no. 239/2020 respectively of deductible social expenses is regulated, % applied on the value of expenses with staff salaries, according to the Labor Code.

  • At the same time, the provisions of art.76 para.(4) letter x) and art.142 lit.z) of Law no.227/2015 regarding the Fiscal Code.The measure applies starting with the revenues related to April 2021.

  • Restructuring of budgetary obligations (OG 6/2019):

In the context of the exacerbation of the COVID crisis, resulting in new restrictions, including those of an economic nature, the provisions regarding the deadlines for submitting notifications and requests submitted by them in order to benefit from the measures for restructuring budgetary obligations were extended.

Thus, considering that the term of notification of the fiscal authority regarding the restructuring intention expired on March 31, 2021, and the economic effects of declaring the state of emergency and the state of alert is expected to continue after their cessation, and the economic situation of taxpayers concerned will continue to be affected, art.3 par. (1) and art. 22 para. (1) in order to extend the deadlines for submitting the notification regarding the intention to restructure the budgetary obligations and implicitly of the request for restructuring the budgetary obligations.

According to OUG 19/2021, the deadline for submitting the notification regarding the intention to restructure the budgetary obligations was extended until September 30, 2021 and also the deadline for submitting the restructuring request was extended until January 31, 2022.

Moreover, for the debtors who notified the fiscal authority in the period 2019-2021 and did not submit the restructuring request, a reasonable deadline was established for fulfilling the conditions and submitting the restructuring plan. Otherwise, the forced execution will start, precisely in order to fulfill the conditions and submit the restructuring plan. If after the beginning of the forced execution the debtor submits the restructuring request, in this situation the fiscal authority will order the suspension of the forced execution measures until the solution of the request, as the case may be. Taking into account the significant number of notifications compared to the number of restructuring requests, it is justified to establish this reasonable deadline for submitting the request so that the fiscal authority can analyze whether the restructuring plan is viable or not.

Similarly, the same treatment will be applied to those who will submit notifications after the date of entry into force of this OUG.

  • ancellation of ancillary obligations(OUG 69/2020):
  • Given that ancillary obligations make it difficult to comply with the payment of budgetary obligations, in the current context of financial difficulties faced by taxpayers directly or indirectly affected by the COVID-19 crisis, and analyzing the impact of adopting fiscal facilities, adopted after the entry datein a state of emergency, it was necessary to continue applying these fiscal measures until January 31, 2022.
  • Scheduling the payment, in simplified form, of the budgetary obligations due after the date of declaring the state of emergency, administered by the central fiscal authority(OUG 181/2020):
  • Considering the fact that the requests for granting the payment rescheduling in simplified form were submitted in a significant number both until the end of last year and from the beginning of this year, it is found that this type of tax facility was of high interestfrom the taxpayers, which led to the extension of the term for granting this facility until September 30, 2021.

VAT refund – extension of the term for which the measure regarding the request for reimbursement is applied through the returns with the negative amount of value added tax with reimbursement option, submitted within the legal submission term, with the subsequent fiscal inspection, until of January 31, 2022. The extension of this term aims to further support the business environment and individual taxpayers, in the current difficult health and economic context.