Romania: Tax measures in response to COVID-19

Draft bill to amend Romanian Fiscal Code

Given the difficult economic circumstances caused by the spread of infection with the novel coronavirus (COVID-19), the Romanian tax authorities have prepared a series of measures to support businesses. The Senate is debating on a draft bill that would modify the Fiscal Code (Law 227/2015). This draft bill would postpone until 25 July 2020 or later, if the case may be, (date to be established through Government Ordinance), the payment of the following tax obligations:

• Corporate income tax for 2019 and the first quarter of 2020;
• Microenterprises tax for the first quarter of 2020;
• Income tax and social insurance contributions for February-April 2020;
• VAT for February-April 2020.

To benefit from this postponement, companies should have as their main or secondary activity one of the NACE code mentioned in the draft bill (e.g. commercial activities, transport, restaurants, hotels, etc.) and have had income related to these NACE codes in 2019. Companies in liquidation are not eligible.

Other measures taken by the Romanian tax authorities

According to a press release, the following additional measures will be taken by the tax authorities:

• Postponement of the deadline for submission of all tax returns from 25 March 2020 to 25 April 2020;
• Suspension or, as the case may be, the non-prosecution of foreclosure. This means that subpoenas will not be issued, and no bank accounts, income or goods will be seized. This does not apply to amounts awarded by courts in criminal matters;
• VAT refund for all settled returns for which refund decisions have been issued;
• Implementation of a new VAT refund mechanism aimed at speeding VAT refund payments, starting 1 April 2020;
• Suspension of tax audits (tax and anti-fraud), except for audits that can be carried out remotely, and of tax evasion investigations;
• Suspension of anti-fraud actions connected to Filter II and of specific activities at the border crossings with Hungary and Bulgaria.

The measures will be applied both during the period in which Romania is declared to be in state of emergency and for a period of 30 days thereafter.

At the same time, the tax authorities have extended the deadline for payment of the first instalment for local taxes (building tax, land tax, and vehicle tax) for all taxpayers (individuals and companies) from 31 March 2020 to 30 June 2020. Taxpayers who pay local taxes by 30 June 2020 can still benefit from tax incentives established by local councils.