Legal & Tax Updates

NNDKP Tax Flash No. 5/2024 – New tax facilities introduced by the Emergency Ordinance no. 107/2024

The Emergency Ordinance no. 107/2024 concerning the regulation of certain fiscal and budgetary measures in the management of budget claims and the budget deficit for Romania’s general consolidated budget in 2024, as well as the amendment and completion of certain normative acts was published in the Official Gazette no. 905/September 6^th, 2024. 

To encourage voluntary compliance regarding the payment of tax obligations, with a positive impact on budgetary collection, the following tax facilities are introduced:

1. The cancellation of accessories for outstanding budgetary obligations, as follows:

• The interest, penalties, and accessories related to the main budgetary obligations outstanding as of August 31^st, 2024, will be canceled if the principal debts are paid by November 25^th, 2024, and if the debtor has no other outstanding budgetary obligations for the period between September 1^st, 2024 and the date of the request, and has submitted all tax declarations by the date of submitting the request for the cancellation of accessories.
• Under similar conditions, the interest, penalties, and accessories related to the following will also be canceled:
  • interest, penalties, and accessories related to the differences in main budgetary obligations declared additionally by debtors through a rectifying declaration submitted after September 1^st, 2024 by November 25^th, 2024, which corrects the main budgetary obligations with due dates prior to or including August 31^st, 2024, will also be canceled under similar conditions. These provisions are also applicable in the case of correcting errors in VAT returns;
  • primary budgetary obligations administered by the central fiscal authority, with due dates prior to and including August 31^st, 2024, and specified in tax assessment decisions issued as a result of a tax audit ongoing at the time of the entry into force of the Emergency ordinance.
• The measure applies to all taxpayers, individuals and legal entities, regardless of legal form, and also includes taxpayers undergoing insolvency. It also applies under certain conditions to tax payers who benefit from deferred payments.
• The request for the cancellation of accessories must be submitted no later than November 25^th, 2024, inclusively.

2. Facilities for individuals

• Individuals, including those who carry out economic activities independently or practice liberal professions and who have outstanding main budgetary obligations as of August 31^st, 2024, can benefit from the following:
  • For debts under 5,000 lei: Cancellation of 50% of the main budgetary obligations outstanding as of August 31^st, 2024, if 50% of these obligations are settled by the date of the cancellation request submission, but no later than November 25^th, 2024. Also, the cancellation of interest, penalties, and all accessories related to the main budgetary obligations outstanding as of August 31^st, 2024;
  • For debts over 5,000 lei: Cancellation of 25% of the main budgetary obligations outstanding as of August 31^st, 2024, if 75% of these obligations are settled by the date of the cancellation request submission, but no later than November 25^th, 2024. Also, the cancellation of interest, penalties, and all accessories related to the main budgetary obligations outstanding as of August 31^st, 2024.
• Exceptions: The measures do not apply to claims that include state aid to be recovered or EU funds.

3. Tax Incentive

• A 3% tax incentive is granted on the annual corporate income tax and the micro-enterprise income tax for the fiscal year 2024, conditional upon the full and timely payment of these taxes as well as the fulfillment of all reporting and payment obligations.
• Attention: The tax incentive is calculated and granted by the tax authority, and the amounts subject to the tax incentive are not refunded but are to be used to offset other tax obligations. The bonus also applies to IMCA (minimum tax on turnover).

The facilities from points 1 and 2 above are not granted to budgetary obligations that are the subject of criminal proceedings.

The Romanian version of this newsletter is available here.