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FACILITIES ON THE PAYMENT OF THE RENT DURING THE STATE OF EMERGENCY

In the Official Gazette n. 245/21.05.2020 has been published the law n. 62/2020 on the concession of structures in rent during the state of emergency. It should be noted that the law grants facilities to both tenants and lockers in order to stimulate negotiations between the parties so that an agreement can be reached for the benefit of both parties.

A law adopted late, we hope, however, will help many companies, including freelancers, for the short term by eliminating the pressure for the fulfilment of certain financial obligations.

According to the decree, tenants can postpone payment of rent on request, without interest and penalty, for the use of registered buildings such as offices, construction sites or houses.

This facility applies for the entire emergency period and for the month following that in which the state of emergency has ceased and consists in the payment of rents by the competent territorial tax authority to the account of the lessor at the request of the lessee.

The property applies only to the payment of rent, with the payment of utilities or other charges imposed on tenants under lease contracts being excluded, with the contractual conditions applying to those charges.

The beneficiaries of this law are a broad category, namely economic operators, freelancers, legal persons, regardless of the form of organization, as well as freelancers.

In addition, we will examine in this article the provisions of rental facilities for economic operators, regardless of their category.

 

The conditions for the benefit of this facility are:
  • their activity was interrupted or their income fell by at least 15% in March 2020 compared to the average for the last calendar year in the emergency period;
  • In buildings subject to lease contracts to be recorded as premises, yards.

In order to benefit from the deferred tax provided for by law, the lessee must submit an application to the competent local tax authority, accompanied by the following documents:

  • the lease agreement between the lessor and the lessee;
  • the lease agreement between the lessor and the lessee, which shall include the following:
    • the agreement of the parties to postpone the payment of the rent, the duration of the deferral period for the payment of the rent, the amount of that deferral period;
    • identification of the lessor and lessee;
    • the details of the landlord’s bank account on which payment is to be made by the competent local tax authority;
    • the date of signature and signatures of both parties;
  • any kind of justification by the lessee that the rent cannot be paid within the period specified in the contract between the lessor and the lessee.

According to the decree, there is a limit to the amount that the tax administration must pay with a fee of 10,000 lei, provided that the following conditions are met:

  1. the monthly rent specified in the addendum between the lessor and the lessee is lower than the rent of February 2020;
  2. the monthly rent indicated in the addendum is a maximum of RON 10000 for economic operators for each location.

We understand that the tenants who pay a rent of more than 10,000 lei, even if they have been renegotiated, will not benefit from this structure.

Subsequently, after the period during which the payment was deferred, tenants will pay deferred monthly rents in instalments to the tax authority until 31st December 2020. Non-payment of such amounts by tenants to the tax authority will result in their enforced execution under Law 207/2015 on the Tax Procedure Code.

Whereas during this period the owners were not very understanding and many did not want to postpone the payment of the rent or negotiate a reduction thereof, the draft law provides that the tax exemption for income from the supply of goods under certain conditions, namely a reduction in income tax for profit-making or micro-enterprises, tax benefit will be granted to tax-exempt persons.

This facility applies to private taxpayers who reduce the value for the sale of real estate by at least 30% compared to February 2020 during 2020. Even this reduced fee will not be included in the calculation of the annual ceiling for the determination of the obligation to pay the social health security contribution.

In the case of taxpayers who are subject to corporate income tax and taxpayers who are subject to income tax on micro-enterprises, income from the sale of the use of immovable property obtained through rental/sublease or usufruct contracts is taxable only at 80% of its value, provided that the rent has been reduced by at least 20% compared to February 2020.

The period during which taxpayers, irrespective of their category, may benefit from this facility is the period during which the reduction in the value of the use of the immovable property was negotiated, but not later than 31st December 2020.

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