Coronavirus update no. 23/2020 - Rescheduling of tax payments

In the Official Gazette no. 988 from October 26, 2020 was published the Government Emergency Ordinance no. 181/2020 regarding certain tax and budget measures, which was then complemented by the procedure approved through the Order of the President of ANAF no. 3896, published in the Official Gazette 1104 from November 19, 2020. We present below the main provisions of these pieces of legislation.

 

Context - the term until which no interest or penalties are due

After successive extensions, the deadline of December 25, 2020 was established, until which no interest and penalties are computed for the tax obligations matured after March 21, 2020. Thus, taxpayers who have not yet paid the taxes due starting with the end of March 2020, will have to pay them in full by December 25, 2020. Otherwise they will be considered overdue, interest and penalties will be computed for them and the foreclosure may start.

Given that it is possible that some taxpayers have accumulated during these months significant debts to the state budget, which can hardly be paid in full by December 25, 2020, the authorities have introduced the possibility of rescheduling these debts for up to 12 months. The rescheduling is granted in a simplified form compared to the procedure provided by the Fiscal Procedure Code and does not imply any guarantees.

Conditions to be met in order to be eligible for rescheduling:

• The amount to be rescheduled must be at least 500 lei in the case of individuals and 5,000 lei in the case of legal entities.
• The application must be submitted by December 15, 2020 inclusive.
• The taxpayer must not be in a bankruptcy or dissolution procedure.
• All outstanding taxes at the start of the state of emergency (March 16, 2020) to be paid until the moment the tax certificate is issued.
• The taxpayer must have all the tax returns submitted according to the fiscal vector until the date the tax certificate is issued.

 

Rescheduling procedure

The taxpayer will submit a request for rescheduling (at the registry, by mail or electronically - via the electronic form D5), until December 15, 2020, to which it will attach the proposed payment schedule. Within a maximum of 5 working days, the tax authorities will issue the tax certificate. The request is also solved in 5 working days either through a decision to reschedule the payment or a rejection decision. If a differentiated payment of the installments is desired, the request must also mention the percentage that will be paid for each installment, provided that in the first half of the period each installment must represent at least 5% of the rescheduled taxes.

The rescheduling decision may be changed twice, at most, at the request of the taxpayer, in order to include in the rescheduling certain taxes on the payment of which the validity of the rescheduling depends.

 

Conditions for maintaining the rescheduling

After the request is accepted and payment rescheduling is granted, it remains valid only if the following conditions are met:

• the taxes due after the date the rescheduling decision is received and those established by the tax authorities after this date are declared and paid on time,
• the additional taxes resulting from rectifying tax returns are paid in maximum 30 days after the rectifying return is submitted,
• to comply with the amounts and the payment deadlines from the payment schedule (the condition is also met if the installment is paid until the next deadline in the schedule),
• to pay all the unpaid taxes that are not subject to the rescheduling (including fines and payables established by other authorities and sent to the tax administration), within 180 days from the date of communication of the rescheduling decision.

The costs of rescheduling – interest and penalties

The payment rescheduling comes from the beginning with certain associated costs, and these increase significantly if payments are delayed or the rescheduling loses its validity. For this reason, taxpayers intending to apply for the rescheduling must first analyze the costs and benefits and take into account the risks that may arise during the rescheduling period.

Thus, interest of 0.01% per day is computed by the tax authorities, for each installment, starting with December 26, 2020 (as opposed to an interest rate of 0.02% per day provided by the Tax Procedure Code and applied to a regular rescheduling). These represent costs that the taxpayer will bear, even if it strictly complies with the terms and conditions of the payment rescheduling.

If the payment of the installments is delayed, a penalty of 5% will be charged for the amounts not paid on time. The same penalty will be applied for the entire amount left unpaid, if the rescheduling loses its validity, in which case the foreclosure for the recovery of the taxes will be continued or started. In case the validity of the rescheduling is lost for certain reasons, the debtor may request twice for the rescheduling to be maintained, if it submits a request for this purpose and pays the taxes due within 90 days from the date the decision to maintain the validity is received.

PAY ATTENTION: By submitting the application for rescheduling the taxes, the taxpayer waives the right to benefit from the provisions of GEO 69/2020 regarding the cancellation of the accessories related to the debts prior to March 31, 2020, a facility about which we informed you through Coronavirus Updates 13/2020 and 22/2020.

 

In order to have an efficient communication, we established a direct link with the related department. For the subject of the current Update, the requests for tax consultancy may be sent to [email protected] with a brief description of the query. One of our consultants will answer or contact you shortly.

 

Disclaimer

The information in this newsletter is intended to give you an overview of legislative news; the newsletter does not contain a complete analysis of each topic. For more information about the subjects presented, please contact us. We do not accept any responsibility for decisions or omissions followed by the use of the content of this newsletter. All Boscolo&Partners newsletters are available at the following address: http://www.crowe.ro.

 

Boscolo & Partners