Romania

Value Added Tax

  • No late payment interest and penalties will be due for the tax liabilities not paid during the period from 21 March 2020 until 30 days after the state of emergency ceases. Any tax liabilities will not be considered overdue during this time.
  • VAT reverse charge mechanism will apply to import of protective equipment, medicines and other medical equipment used in prevention, limitation, treatment and control of COVID-19 and to import of completely denatured ethyl alcohol used for producing disinfectants.
  • During the state of emergency period and for 30 days afterwards, the VAT refunds will be made  with a subsequent tax audit, under certain limitations.
  • Medicines, PPE and other materials and medical equipment that can be used in the prevention, limitation, treatment and overall fight against COVID-19 will be VAT-exempt upon their supply to NGOs. Such supplies should be performed before 1 September 2020. 

Corporate Income Tax

  • Simplified procedure for taxpayers declaring CIT annually with advance payments on a quarterly basis. The advance quarterly payments for 2020 will be at the level of CIT computed for each quarter. 
  • No late payment interest and penalties will be due for the tax liabilities not paid during the period from 21 March 2020 until 30 days after the state of emergency ceases. Any tax liabilities will not be considered overdue during this time.
  • Bonification of 5% or 10% granted to the taxpayers paying the CIT due for Q1 2020 until 25 April 2020. Bonification of 10% granted for the payment of CIT and micro-enterprise income tax by 25 July 2020 for the second quarter of 2020 and by 25 October 2020 for the third quarter of 2020.

Social Security Contributions or Payroll Tax

  • No late payment interest and penalties will be due for the tax liabilities not paid during the period from 21 March 2020 until 30 days after the state of emergency ceases. Any tax liabilities will not be considered overdue during this time.
  • The benefits-in-kind granted to employees occupying certain jobs considered essential are not subject to income tax and social contributions if such employees are isolated at the workplace or in remote areas without outside access for a period set by the employer during the state of emergency. 
  • The salary incentives granted to employees performing activities which involve direct contact with persons and represent a high risk of COVID-19 infection are exempt from social contributions. 
  • The deadline for submission of the yearly tax return was postponed until 30 June 2020. A bonification of 5% is granted if payments of income tax and social contributions due for 2019 are performed by 30 June 2020. An additional 5% bonification applies for online submission of the yearly tax return.

Other relief measures

  • Extension of payments for property taxes (e.g. buildings, land, cars, etc.) until 30 June 2020.
  • Suspension of all enforcement proceedings from 21 March 2020 until 30 days after the state of emergency ceases.
  • Taxpayers carrying out activities in the HORECA sector do not owe the specific tax for the period their activities are interrupted during the state of emergency, if  certain conditions are fulfilled.  
  • No interest and penalties will accrue for the late payment of scheduled instalments up to 30 days after the state of emergency.
  • The deadline for the submission of the financial statements for 2019 was postponed until 31 July 2020.
  • A tax amnesty has been approved in respect to accessory tax obligations (i.e. interest and late payment penalties) outstanding as of 31 March 2020, subject to certain conditions.
  • For the two months state-of-emergency period, local authorities may grant a reduction of up to 50% of the annual building tax for non-residential buildings or an exemption from payment of the monthly building tax in case of state-owned buildings, subject to certain conditions. 

Additional comments

Other relief measures:

  • Compensation for labor agreements suspensions, under certain conditions. The employees will receive 75% from the base salary, but no more than 75% of the average gross salary in Romania (i.e. approx. EUR1,100) for the state of emergency period. The income tax exemptions available to certain categories of individuals  (e.g. software developers, employees performing research and development activities) will not apply to the indemnity paid by the state.
  • The technical unemployment indemnity will continue to apply after the lapse of the state-of-emergency period until 31 May 2020, but only for taxpayers acting in fields where lockdown restrictions are imposed by authorities.