(P) Tax Flash: Rescheduling payments of due taxes in Romania; amendments on computing Environmental Fund taxes
Government Emergency Ordinance no. 29/2011, published in the Official Gazette no. 200/22 March 2011
The Government Emergency Ordinance (GEO) introduces the possibility to reschedule in certain conditions the payment of tax liabilities (of individuals or legal persons) which are administered by the National Agency for Tax Administration.
The rescheduling of outstanding tax liabilities may be granted by the authorities (further to a request of the taxpayer) for a period of maximum 5 years, depending on the amount of tax liabilities and the degree of solvency of the respective taxpayer.
Tax liabilities subject to payment rescheduling are the ones mentioned in the tax clearance certificate issued in this respect by the tax authorities.
According to the provisions of the GEO payment rescheduling is not granted in certain cases including inter-alia fines, tax liabilities lower than RON 500 for individuals and RON 1,500 for legal entities, etc.
The following conditions have to be cumulatively met by taxpayers in order to benefit of payments rescheduling:
all tax returns have been submitted by the date when the tax clearance certificate is issued;
to be in difficulty due to the temporary lack of financial resources, but to have the financial capacity to perform payments during the rescheduling period;
provide guarantees to cover the rescheduled amounts, interest due for the rescheduling period and an additional amount between 10% to 40% of the rescheduled amounts depending on the rescheduling period (n.b. guarantees are not required for tax liabilities equal or lower than RON 5,000 for individuals and RON 20,000 RON for legal entities);
not to be subject to insolvency or dissolution procedure;
and should not be deemed as liable person in cases associated with insolvency.
It is important to mention that the guarantee requirements are quite burdensome, e.g. may be of 140% of the amount of the tax to be rescheduled to which the interest due for the rescheduling period is also added.
Additional conditions have to be met by taxpayers for maintaining the validity of the payment rescheduling scheme.
Interest and penalties
The tax liabilities rescheduled for payment are subject to late payment interest (for the period between the date of issuance of the payment rescheduling decision and the payment date/deadlines). However, depending on the guarantees set up, the applicable late payment interest may be reduced to 0.03% per day.
No late payment penalties are due for rescheduled tax liabilities for which the deadline of 90 days from the due date is reached after the date when the taxpayer submitted the request for payment rescheduling.
In addition to the above, a 10% penalty is applicable inter-alia in respect of installments paid with delay (before the following installment deadline).
Amendments of the Methodology for computing the contributions and taxes due to the Environment Fund
(Order no. 1032/2011 of the Ministry of Environment and Forestry, published in the Official Gazette no. 196/22 March 2011)
The Order approves certain amendments to the methodology for computing the contributions and taxes due to the Environment Fund in accordance with the provisions of the Government Emergency Ordinance no. 196/2005 as subsequently amended.
The main amendments approved by the Order include:introduction of specific provisions regarding the methodology for computing the tax due starting 1 January 2011 by economic operators for used oils introduced on the national market;
amendments regarding the method for computing the base for applying the 2 RON/kg contribution due in respect of packaging waste by economic operators which introduce packaging and packaged goods on the national market, as well as various clarifications regarding the annual objectives for packaging waste recovery or burning in burning installations with recovery of energy, etc.;
elimination of the exemption from the payment of taxes for the emission of polluting agents into the atmosphere in case of usage of recyclable industrial waste as secondary raw material in a technological process in a proportion of at least 50% of the total quantity of secondary raw materials used;
and clarifications in respect of the types of materials (considered as obtained from non-renewable resources) used for manufacturing shopping bags subject to the eco-tax.
Other amendments include inter-alia clarifications/changes regarding the wording of the methodology’s provisions.
By Venkatesh Srinivasan, Partner – Head of Tax and Legal, Ernst & Young Romania
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