Main legislative changes for March 2022

1.   Tax amnesty of daily allowances and the new fiscal regime applicable to daily allowances

In the Official Gazette no. 315 of March 31, 2022 was published Law no. 72/2022which introduces the fiscal amnesty of external daily allowances as well as the new fiscal regime applicable to internal and external daily allowances.

The law is addressed to companies that have granted allowances or similar amounts to their employees delegated, posted or working on the territory of another country for the period from 1 July 2015 to the date of entry into force of this law, these allowances being subsequently reclassified by the tax authorities as salary taxable income.

Thus, these companies benefit from the cancellation of the main and/or accessory tax liabilities established by the tax authority by tax decision. The tax liabilities are cancelled ex officio by NAFA by issuing a decision to cancel tax liabilities, which will be communicated to the taxpayer.

For taxpayers who have not been subject to an inspection, the tax authority will not reclassify external daily allowances and will not issue tax assessments for this period.

In addition, the differences in main and/or accessory tax liabilities, established by the tax authority by tax assessment decision, related to the period from 1 July 2015 to the date of entry into force of this law, paid by any means, shall be refunded to taxpayers upon request.

For the implementation of these provisions, an NAFA order will be issued within 30 days from the date of entry into force of this law.

In the future, the tax authorities will be able to reclassify the tax treatment of daily allowances only following inspections carried out by the competent bodies of the Labour Inspectorate.

At the same time, this law introduces an additional threshold for the amount of the non-taxable value of daily allowances, both internal and external, represented by the limit of 3 base salaries; the previous threshold of 2.5 times the level applicable to public institutions remains applicable also.

The actual threshold for the 3 base salaries is calculated in relation to the number of days of secondment/delegation out of the number of working days in the respective month.

The provisions relating to the new threshold will apply starting with the revenues for May 2022.

2.   Tax incentives for taxpayers for humanitarian aid in the context of the military conflict in Ukraine 

In the Official Gazette no. 231 of March 8, 2022, was published Emergency Ordinance no. 20 of 7 March 2022 granting tax incentives for taxpayers for humanitarian aid in the context of the military conflict in Ukraine.

Taxpayers liable to corporate income tax will deduct, when calculating the tax result, the expenses with cash donations granted to the General Inspectorate for Emergency Situations (GIES) for humanitarian assistance to citizens from the area of military conflict in Ukraine.

One of the following tax treatments may apply to expenses for goods and services provided at the request of the Department of Emergency Situations (DES): 

• these expenses are treated as social expenses, being deductible expenses within the limit of 5% of salary expenses; 

• these expenses are treated as sponsorship expenses and may be deducted from the corporate income tax due, up to a limit of 20% of the tax but not more than 0.75% of turnover.

In addition, expenses relating to goods, financial means and services granted to UNICEF and other international organizations operating under the provisions of special agreements to which Romania is a party, are assimilated to sponsorship expenses and may be deducted from the corporate income tax due, within the limits mentioned above.

For taxpayers liable to income tax on microenterprises, they deduct from their taxable base the amounts of cash donations to the GIES. 

Expenses for goods and services provided on the basis of a request from the DES, as well as expenses for goods, funds and services provided to UNICEF and other international organisations, are treated as sponsorship expenses and may be deducted from the tax due, up to a limit of 20% of the tax.

In the case of self-employed individuals that determine their annual net income in real system, they may deduct expenses representing cash donations to the GIES for humanitarian assistance. They will also consider as deductible the expenses for goods and/or services provided free of charge as humanitarian aid on the basis of the DES request, provided that they are within the same limits as social expenses and sponsorship.

Regarding the VAT treatment, goods and services provided free of charge for humanitarian purposes by taxable persons on the basis of a request from DES are considered to be goods and services provided free of charge as part of sponsorship or patronage. Therefore, these transactions are not deemed as supply of goods and VAT is not due for the amounts within the legal thresholds.

The above provisions shall apply until 31 December 2022 inclusive.

3.   Clarifications on the deadlines for filing the Informative Statement D406 Standard Audit File for Tax SAF-T

In the Official Gazette no. 275 of March 22, 2022, was published NAFA Order no. 373 of March 9, 2022 clarifying the deadlines for filing the D406 return for certain categories of taxpayers, as follows: 

• non-resident taxpayers registered in Romania for VAT purposes only are required to submit the D406 starting with 1 January 2025; 

• large taxpayers that starting with 1 January 2022 are classified as medium or small taxpayers are required to submit the D406 according to the category in which they are classified, i.e. 1 January 2023 or 1 January 2025.

More details may be found in the Tax newsletter prepared by our office for the month of November. 

4.   Approval of the new procedure for settling VAT returns with negative amounts with request to reimbursement

In the Official Gazette no. 242 of March 11, 2022 was published NAFA Order no. 352 of March 7, 2022 for approval of the new procedure for settling VAT returns with negative amounts with request to reimbursement.

One of the facilities introduced in 2020 in the context of the pandemic was granting of VAT reimbursement before tax inspection, this measure becoming permanent by the provisions of OG 11/2021. 

According to this, VAT is refunded with a subsequent tax inspection, except in certain separately regulated situations, for certain categories of taxpayers considered by the tax authority as presenting a risk of undue reimbursement.

This procedure regulates the practical application of these provisions and is applicable to VAT returns submitted starting with 1 February 2022.

Disclaimer

The information contained in this newsletter is intended to give you an overview of new legislation; the newsletter does not contain a comprehensive analysis of each topic. For more information on the topics covered please contact us. No liability is accepted for decisions or omissions following the use of the contents of this newsletter. All Crowe newsletters are available at the address www.crowe.ro.

Crowe Romania