GEO 48/2020 — Additional fiscal measures and procedural and reporting clarifications during the state of emergency

Procedural and reporting clarifications

Most of the new fiscal measures adopted by the Government through a new Emergency Ordinance (GEO) published on 16 April 2020 will be applicable during the emergency period and for a specified determined period after its termination. In particular, the fiscal measures involve suspension of fiscal penalties and foreclosure procedures, deferrals of payments for certain taxes and import VAT, as well as clarifications of the tax regime applicable to technical unemployment allowances and to parents' paid days off borne by the state during the emergency period. Other measures involve deferrals of financial reporting obligations for companies and procedural measures targeting the activity of the tax authorities, the most important one being the smooth flow of the VAT refund procedure.

Rene Schob

Partner, Head of Tax & Legal

KPMG in Romania


The legislation adopted

Emergency Ordinance no. 48 (“the Ordinance”) was published in the Official Journal of Romania on 16 April 2020 and introduced additional fiscal measures in the context of combating the Covid-19 epidemic. We will briefly present all these measures, as follows.

Financial statements may be submitted up to 31 July 2020

The ordinance extends to 31 July 2020 inclusive the deadlines provided by accounting legislation for the preparation and submission of the 2019 financial statements, the annual reporting obligations and the declarations of entities which have not carried out activities since their establishment.
The extension of the deadline also applies for legal entities in liquidation.

Specific tax is exempt from payment

Taxpayers liable to specific tax will not be liable for the tax for the period during which they interrupt their activity totally or partially during the state of emergency period. The recalculation of the specific tax will be carried out by dividing the annual specific tax by 365 calendar days and multiplying the result by the number of days in which they were active. In order to benefit from the exemption, taxpayers must cumulatively fulfill the following conditions:

  • They must interrupt all or part of their activity and obtain the emergency certificate issued by the Ministry of Economy, Energy and the Business Environment; 
  • They must not be in insolvency.

Micro-enterprises can deduct sponsorship granted to public institutions and authorities

Micro-enterprises can also deduct sponsorship granted to public institutions and authorities from the tax due, including sponsorship of specialized bodies of public administration. Previously, the facility only applied to supporting non-profit entities and religious organizations included in the Register of cult entities/units.

Benefits in kind granted to employees in preventive isolation are exempt from tax obligations

During the state of emergency, benefits in kind are exempt from income tax and social contributions for employees who are considered essential for the business and who are in preventive isolation at the workplace or in specially dedicated areas where no outside access is granted, for a period determined by the employer.
The measure is also applicable to persons deriving income assimilated to salaries.

Allowances for technical unemployment and days off granted to parents are not exempt from income tax and contributions, regardless of who they are granted to, if they are paid for from the state budget

The Ordinance states that for these two categories of allowances granted starting from April 2020 (technical unemployment allowance paid by the unemployment insurance budget and the allowance for the days off granted to parents for supervising children, paid for by the state budget) the exemption from income tax and social contributions included in the Fiscal Code no longer applies for:

  • Individuals with severe disabilities.
  • Individuals who, under their employment contract, undertake computer creation programs.
  • Individuals who have concluded employment contracts for seasonal activities.
  • Individuals who have concluded employment contracts for construction work.

KPMG comment:

This provision exclusively concerns the above-mentioned allowances which are paid for by the unemployment insurance and the state budget, respectively. Employers granting income from their own funds can apply the facilities related to salary income and income assimilated to salaries mentioned in the Fiscal Code.

VAT refund will be made without prior audit

During the state of emergency period and for 30 days after its termination, VAT requested for reimbursement for which no decision has been issued by the date of entry into force of the Ordinance will be reimbursed to taxpayers without prior auditing. An exemption exists, however, for cases where the tax inspection has already started. The reimbursement may be subject to a subsequent tax inspection, decided on the basis of a risk analysis.

The measure shall not apply if:

- The taxpayer’s record (Romanian „cazier fiscal”) shows administrative offenses.
- The tax authorities determine that the taxpayer is not entitled to receive the reimbursement.
- A voluntary liquidation or insolvency procedure has started (except for those with a confirmed restructuring plan).
In addition, for small taxpayers, the new refund procedure will not apply if:

  • The taxpayer submits the first refund application after its VAT registration.
  • The balance of the amount requested for reimbursement relates to more than 12 reporting months (or 4 quarters).

The fiscal lottery has been suspended
The monthly and occasional drawings of the Fiscal Lottery organized according to Government Ordinance no. 10/2015 will be suspended and will be resumed within 90 days of the end of the state of emergency.

Foreclosure procedures by notice and recovery through tenders have been suspended

Foreclosure procedures by notice for state receivables and subsequent recovery through tenders are suspended or will not start (unless established through court decisions in criminal matters). The suspension ends 30 days after the end of the state of emergency. The statutes of limitations are also suspended over this period.

KPMG Comment:

The initial measures taken by the Government concerned only the foreclosure procedures involving garnishments. The new amendments extend the scope of application to notices or tenders.

The installment schedule for budgetary liabilities will be restored without penalties if the installments are not paid on time

The Ordinance states that for late payment of installments included in an installment schedule which remain outstanding within 30 days after the end of the state of emergency, no interest and penalties will be calculated according to the Fiscal Procedure Code. In this case, by the first payment deadline after the term expires, the tax authority will restore the installment schedule, while respecting the approved installment period. The new timetable will be communicated to the debtor by decision of the tax authority.

Gambling operators are exempt from penalties

Gambling operators are exempt from fees for gambling authorizations for the entire period of the state of emergency. They will not be subject to penalties for non-payment of fees for the authorizations to operate gambling activities, if the fees are paid within 30 working days of the end of the state of emergency.

At the same time, the licenses for organizing as well as the the authorizations to operate gambling activities which expire during the state of emergency will automatically be extended to 90 days from the date the state of emergency ends. Operators which opt to continue their activities may submit applications for re-authorization of their activity no later than 90 days after the state of emergency has ended.

Deferral of import VAT for completely denatured ethyl alcohol

GEO no. 48/2020 adds to the list of products used in combating COVID-19 that may benefit from deferral of import VAT (under GEO no. 33/2020) the completely denatured ethyl alcohol used for the production of disinfectants.
This facility may be applied during the state of emergency period by companies registered for VAT purposes which import completely denatured ethyl alcohol for the production of disinfectants and hold a valid end-use authorization.

The recovery of excise goods owned or enforced by the state will be specially regulated
According to the new provisions, ethyl alcohol, alcoholic beverages and energy products which are owned by the state or which are the subject to a foreclosure procedure and do not fulfill the legal requirements to be commercialized, may be provided by the appropriate authorities to fiscal warehouses only for processing, denaturing or transformation purposes, based on a contract stipulating such a supply of services

Also, the supplies of excise goods should be carried out based on an invoice not including excise duties, and the movement of these products will not be subject to EMCS monitoring or to rules on the movement of goods under excise duties suspensive arrangements.

The same categories of products, which, however, fulfill the legal requirements to be commercialized, will be granted by the appropriate authorities to retailers, based on invoices comprising the calculation of excise duties.


© 2024 KPMG Tax SRL, a Romanian limited liability company and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved.

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