Fiscal amnesty and bonus system for good-paying taxpayers – 2024
Summary
Legal framework
Emergency Ordinance 107/2024 to regulate certain fiscal and budgetary measures in the field of managing budget claims/receivables and the budget deficit for the general consolidated budget of Romania in 2024, as well as to amend and complement certain normative acts (Official Gazette 905/2024) – the main act regulating the fiscal amnesty and bonus system
Emergency Ordinance 112/2024 to amend and complement certain acts (Official Gazette 959/2024) – the act that complemented provisions of GEO 107/2024
Order 5521/2024 to approve Procedure to cancel certain budgetary obligations (Official Gazette 944/2024)
Briefly, the acts mentioned above introduced the following provisions:
- fiscal amnesty for interest, penalties and all additional obligations related to main budgetary obligations unpaid by the 31st of August 2024, if debtors pay the main debts and submit a cancellation request by the 25th of November 2024 – this applies to all categories of debtors, including individuals;
- cancelling 50% or 25% of the main budgetary obligations and additional obligations related to main fiscal obligations unpaid by the 31st of August 2024 for individuals’ debtors;
- the introduction of bonification system for good-paying taxpayers – 3% of the annual corporate tax and/or the tax on micro-enterprise income for the fiscal year 2024.
Details
We present below the consolidated provisions resulting from the normative acts mentioned above
Fiscal Amnesty – cancellation of interest, penalties and all additional obligations
Procedure to cancel certain budgetary obligations
Bonus system for taxpayers in good standing
I. Fiscal Amnesty – cancellation of interest, penalties and all additional obligations
The fiscal amnesty provides for the cancellation of interest, penalties and all additional obligations related to main budgetary obligations unpaid by the 31st of August 2024, if certain requirements are met and a cancellation request is submitted by the 25th of November 2024.
I.1 Beneficiaries of the amnesty
The provisions of the amnesty apply to individuals, legal entities under public or private law, associations and other entities without legal personality, administrative-territorial units, subdivisions of the municipality of Bucharest and public institutions.
According to procedure regulated by Order 5521/2024, debtors that may benefit from the amnesty also includes:
- debtors declared insolvent, according to the law;
- persons who have been jointly and several liability according to the Fiscal Procedure Code, for budgetary obligations related to the period prior to the 31st of August 2024, regardless of the issuance date of the decision to incur liability or the final court decision;
- debtors in insolvency proceedings or in liquidation, according to the legal provisions in force;
- debtors that, on the 31st of August 2024, register only unpaid additional obligations related to main budgetary obligations settled by this date, and the additional obligations were not settled by the 6th of September 2024;
- debtors that have received taxation decisions related to main budgetary obligations due by the 31st of August 2024, as a result of a fiscal inspection in progress on the 6th of September 2024, regardless of the taxation decision communication date.
I.2 Budgetary obligations subject to cancellation
The interest, penalties and all additional obligations related to main budgetary obligations outstanding on the 31st of August 2024 are cancelled, including:
- Obligations for which the payment deadline has expired by the 31st of August 2024.
- Differences in budgetary obligations set by taxation decisions communicated by the 31st of August 2024, even if the payment deadline has not expired.
- Main obligations set by taxation decision issued ex officio or late submission of tax returns between the 1st of September and the 25th of November 2024.
- Other obligations set by enforceable titles that are in the fiscal authority’s records.
Debtors that, on the 25th of November 2024, have VAT reimbursement claims pending for which, after this date, the fiscal authority rejects the whole or partial reimbursement, benefit from the cancellation of additional budgetary obligations if they pay the main budgetary obligations on which the cancellation depends, not settled through compensation with the individualized amounts in the reimbursement claim, within 30 days from the communication date of the decision that rejects the reimbursement.
Payment obligations that are not considered outstanding by the 31st of August 2024 are:
- Budgetary obligations for which payment facilities have been granted and are ongoing on that date.
- Payment obligations established through administrative documents whose execution is suspended.
Payment obligations that, on this date, are in any of the situations provided above and after this date, but not later than the 25th of November 2024 inclusive, the payment facility loses its validity or, as the case may be, the suspension of the execution of the fiscal administrative act ceases (debtors can waive the effects of the suspension) are considered outstanding on the 31 of August 2024.
The provisions of the measures to cancel additional obligations related to main budgetary obligations outstanding on the 31st of August 2024 are applied accordingly by:
- customs authorities for customs receivables/claims.
- central fiscal authorities for budgetary obligations established by economic and financial inspection authorities, through mandatory provisions and minutes.
Starting the 25th of September 2024, GEO 112/2024 complemented the provisions on the fiscal amnesty. Thus, for debtors in insolvency proceedings, special/judicial managers/directors are obliged to request the creditors’ approval, according to Law 85/2014, to access fiscal facilities and to comply with the provisions of GEO 107/2024 by the insolvent debtor.
I.3 Conditions to cancel additional obligations
To benefit from amnesty, debtors should meet the following conditions:
- All main obligations outstanding on the 31st of August 2024 should be settled by the date of the cancellation request, but no later than the 25th of November2024.
- Main and additional budgetary obligations with payment deadlines between the 1st of September 2024 and the submission date of the cancellation request should be settled entirely by the aforementioned date.
- The debtor should submit all tax returns, according to his fiscal vector/status, by the submission date of the cancellation
- The cancellation request for additional obligations should be submitted after meeting all conditions, by the 25th of November2024, under forfeiture of the right.
I.4 Main budgetary obligations additionally declared by rectified tax return or individualized in taxation decisions
The interest, penalties and all additional obligations related to differences in main budgetary obligations additionally declared by debtors through a rectified tax return that corrects main budgetary obligations with deadlines prior to the 31st of August 2024, administered by the fiscal authority, are canceled if the following conditions are cumulatively met:
- the tax return is submitted starting the 1st of September 2024 by the submission date of the cancellation request for additional obligations, but no later than the 25th of November 2024;
- all main budgetary obligations individualized in rectified tax return are settled by any method provided by law by the submission date of the cancellation request for additional obligations, but no later than the 25th of November 2024;
- the rest of the previously mentioned conditions are met.
Similarly, in the case of main budget obligations administered by central fiscal authority with deadlines prior to the 31st of August 2024 and individualized in taxation decisions issued as a result of an ongoing fiscal inspection on the 6th of September 2024, the interest, penalties and all additional obligations are canceled if the following conditions are cumulatively met:
- all differences in the main budgetary obligations individualized in the taxation decision are settled by any method provided by law by the payment deadline,
- the cancellation request for additional obligations is submitted within 90 days from the receipt of the taxation decision, under forfeiture of the right.
The cancellation of additional budgetary obligations applies under the previously mentioned conditions also for:
- main budgetary obligations related to fiscal periods up to the 31st of August 2024, set through taxation decision issued ex officio by fiscal authority or through taxation declaration submitted late by the taxpayer, between the 1st of September 2024 and the submission date of the cancellation request for additional obligations;
- other payment obligations individualized in enforceable titles existing in the records of the fiscal authority in order to have them recovered on the 31st of August 2024, and main budgetary obligations established by authorities, other than the fiscal ones, related to the period between the 1st of September and the submission date of the cancellation request.
I.5 Cancellation of additional budgetary obligations for taxpayers which soon will be subject to a fiscal inspection
In the case of taxpayers that are about to start a fiscal inspection, they may submit rectified tax returns within the first 20 days after the entry into force of GEO 107/2024, these being taken into account by the fiscal authority, by derogation from the provisions of the Fiscal Procedure Code.
At the same time, within 20 days from the date of entry into force of GEO 107/2024, the fiscal authorities notify the debtors of the existence of an ongoing documentary verification.
If the already mentioned conditions to benefit from the amnesty are met, then these taxpayers may also submit to the fiscal authority the notification regarding the intention to benefit from the amnesty related to additional obligations, followed by cancellation request. This request may be registered only after all conditions provided by law have been met, but no later than the 25th of November 2024.
I.6 Cancellation of main obligations for individuals
For individuals, the amnesty offers the possibility to cancel a percentage of the outstanding main obligations, depending on their value:
- For outstanding obligations under RON 5,000: 50% of the main obligations and all related additional obligations are cancelled, if the remaining 50% is paid by the 25th of November 2024.
- For outstanding obligations of over RON 5,000: 25% of the main obligations and all related additional obligations are cancelled, if the remaining 75% is paid by the 25th of November 2024.
If individuals have submitted notifications in order to apply the amnesty, the central fiscal authority issues a decision to postpone a percentage of 50%, respectively 25%, of the main budgetary obligations outstanding on the 31st of August 2024.
After the entry into force of GEO 107/2024, individuals who have proceeded to settle the amounts representing 50%, respectively 25%, of the outstanding budget obligations on the 31st of August 2024, as well as interest, penalties and all additional obligations that may be canceled, have those amounts returned to them.
GEO 112/2024 brought complements on the cancellation of additional obligations resulting from ex officio taxation decisions on income obtained by individuals. Thus, interest, penalties and all additional obligations related to main budgetary obligations established by ex officio taxation decisions on incomes obtained by individuals for the years 2019 and 2020 are canceled if the following conditions are cumulatively met:
- all main budgetary obligations individualized in the ex officio taxation decision are settled by any method provided by law by the payment deadline provided by art. 156 para. (1) from the Fiscal Procedure Code;
- the cancellation request for additional obligations is submitted within 90 days from the communication of the ex officio taxation decision, under forfeiture of the right.
I.7 Provisions on cancellation of interests, penalties and all additional obligations for debtors benefitting from instalment payments – amendments introduced by GEO 112/2024
Debtors that, on the date of entry into force of GEO 107/2024 (the 6th of September 2024), benefit from instalment payment of fiscal obligations, as well as those which obtain instalment payments in the period between the 6th of September 2024 and the 25th of November 2024, may benefit, based on the notification, from the postponement of interest, penalties and all additional obligations remaining from the instalment payments granted.
Cancellation of interests, penalties and all additional obligations is granted if the cancellation request is submitted by the 25th of November 2024, and installment payments are completed by the submission date of the cancellation request, but no later than the 25th of November 2024.
In the event where debtors do not comply with the above conditions, they may request the modification of the payment schedule, provided that within 30 days from the communication date of the decision on the lost validity of the payment postponement, they submit a request in this regard. The request submitted under this provision is not taken into account when determining the number of requests that may be submitted according to the Fiscal Procedure Code.
If debtors do not pay budgetary obligations included in the decision on the lost validity of the payment postponement or do not submit the request to modify the payment schedule within the deadline provided above, the fiscal authority shall send a payment notice and, in this case, those budgetary obligations should be paid within 30 days from the communication date of the payment notice.
If the ongoing instalment payments schedule includes only additional obligations, debtors may benefit from the cancellation of the remaining additional obligations from the payment facility granted without paying them. Following the submission of the cancellation request for additional obligations, the fiscal authority will issue the decision to cancel the additional obligations, as well as the decision to finalize/end instalment payments.
I.8 Provisions applicable for budgetary obligations administered by other authorities
For outstanding budgetary obligations on the 31st of August 2024, due to local budgets, the amnesty provisions are applied by administrative-territorial units, optionally, provided that the application of these provisions is established by a decision of the local council. At the same time, through this decision, the local council also approves procedure to grant the cancellation for certain budgetary obligations.
The amnesty provisions are also applicable for budgetary obligations administered by other institutions or public authorities. In this case, the cancellation request for certain budgetary obligations is submitted and solved by the public institution or authority that administers the respective budgetary obligations.
I.9 Exclusions from amnesty
Fiscal/budgetary obligations that are subject of criminal proceedings, budgetary obligations established by final criminal court decisions and amounts representing damages resulting from criminal proceedings do not benefit from the amnesty. Taxpayers declare on their own responsibility, through the submitted cancellation request, that they are not in any of these situations.
II. Procedure to cancel certain budgetary obligations – regulated by Order 5521/2024
The procedure applies to budget obligations administered by the central fiscal authority, including by customs authorities.
The procedure does not apply for budgetary obligations administered by other institutions or public authorities, and which are not in the records of the central fiscal authority.
The procedure applies to the following categories of additional payment obligations:
- delayed payment interest/increase of amount;
- delayed payment penalties/non-declaration penalties/penalties;
- any other additional payment obligations.
Additional payment obligations and those related to main budgetary obligations established by taxation declarations submitted after the expiration of the limitation period for the right to establish fiscal obligations may be subject to cancellation.
II.1 Submission of notification to obtain the decision to defer payment
Debtors may express their intention to benefit from the cancellation of certain budgetary obligations, respectively the additional payment obligations and/or a percentage of the main budgetary obligations, by submitting a notification, at the latest on the submission date of the cancellation request for certain budgetary obligations.
The notification and cancellation request may be submitted as follows:
- at the registry office of the competent central fiscal authority, for individuals who are not enrolled in the Virtual Private Space, hereinafter referred to as SPV;
- by post mail, registered letter with confirmation of receipt, in the case of individuals who are not enrolled in SPV;
- through SPV.
The notification on the intention to benefit from the cancellation of certain budgetary obligations is not mandatory but aims to obtain a postponement of payment.
After receiving the notification, the central fiscal authority:
- verifies whether the debtor has fulfilled his declarative obligations according to fiscal vector by the submission date of the notification. If it is found that the debtor has not fulfilled his declarative obligations, the fiscal authority guides him in applying the provisions of GEO 107/2024.
- carries out the settlement, compensation and any other necessary operations in order to establish with certainty the budgetary obligations that constitute a condition for granting the fiscal facility.
After submitting the notification, within 5 working days from its registration date, the fiscal authority issues and communicates the decision on additional payment obligations and the fiscal attestation certificate.
If there are inconsistencies between the amounts mentioned on the fiscal attestation certificate and the debtor’s accounting records, the debtor may request their agreement within 3 working days from the communication date of the fiscal attestation certificate.
Subsequently, the fiscal authority issues the decision to postpone the payment of certain budgetary obligations, as well as the address for temporary, total or partial suspension of enforcement, communicated to credit institutions where the debtor has bank accounts and/or third parties garnishees that own/owe money to the debtor, or the rejection notification.
The decision to postpone the payment of certain budgetary obligations loses its validity in any of the following situations:
- On the issuance date of the decision to cancel certain budgetary obligations or the decision to reject cancellation request for certain budgetary obligations, as the case may be;
- If the debtor does not submit a cancellation request for certain budgetary obligations by the 25th of November 2024.
II.2 Submission of cancellation request for certain budgetary obligations
The cancellation of certain budgetary obligations is requested by debtors, including those that have notified the fiscal authority, based on a cancellation request, submitted to the competent central fiscal authority. The request may be submitted after meeting the conditions to grant the cancellation, but no later than the 25th of November 2024.
As an exception, for additional obligations related to main budgetary obligations administered by the central fiscal authorities with deadlines prior to the 31st of August 2024 and individualized in taxation decisions issued as a result of an ongoing fiscal inspection on the 6th of September 2024, the cancellation request for certain budgetary obligations may be submitted after the settlement of main fiscal obligations individualized in the taxation decision issued as a result of the fiscal inspection, within 90 days from the communication of the taxation decision.
Within 5 working days from the registration date of the cancellation request for certain budgetary obligations, the fiscal authority issues the decision to cancel certain budgetary obligations or decision to reject cancellation request, as the case may be.
For debtors that have not notified the fiscal authority, the budget obligations that may be canceled according to GEO 107/2024 and that were settled subsequent to the 6th of September 2024 are returned according to the Fiscal Procedure Code.
III. Bonus system for taxpayers in good standing
Taxpayers complying with the deadlines for payment and declaration of fiscal obligations benefit from a bonus of 3% of the annual corporate tax and/or tax on micro-enterprise income related to the fiscal year 2024/the modified fiscal year starting in 2024. This bonus also applies to fiscal groups, at the level of tax declared by the responsible legal entity.
III.1 Conditions for granting the bonus
To benefit from the bonus, taxpayers should meet the following requirements:
- To have submitted all tax returns according to fiscal vector.
- To pay entirely and by the legal deadlines the corporate tax and/or tax on micro-enterprise income for the year 2024.
- To not register other outstanding fiscal obligations on the legal deadline to submit tax returns.
The amounts related to the bonus are not returned but compensated with other tax obligations. As an exception, the fiscal obligations that are object to bonification system, for which the statute of limitations for the right to request restitution is fulfilled, are returned, if they have not been compensated with other fiscal obligations.
The bonus also applies to taxpayers that, at the end of fiscal year 2024, owe corporate tax at the level of minimum tax on turnover.
III.2 Bonus calculation
If the taxpayer redirects amounts from annual corporate tax, these are not taken into account when determining the bonus.
For taxpayers paying tax on micro-enterprise income, the percentage related to the bonus is applied to the tax due for the entire fiscal year determined by summing up the quarterly taxes on micro-enterprise income.
For micro-enterprises that become corporate tax payers in 2024, the bonus percentage is applied both to tax on micro-enterprise income and to annual corporate tax.
Article written by Valentin Alangiu, Accounting & Tax Partner – Nowium Tax&Finance
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