Schedule of debts and time limits for enforcement deferred up to 25.12.2020

The Government approved, on Thursday, 22.10, the application of the simplified alternative procedure for granting payment installments for a maximum of 12 months, for main and ancillary budgetary obligations whose expiry date/payment deadline has expired after the activation date of the state of emergency and until the date of issue of the tax return certificate.

At the same time, the Executive decided to extend until 25th December the period during which interest and penalties for unpaid tax obligations will not be collected because of which has expired after the beginning of the emergency situation and the tax authorities will not start the application, allow debtors to decide on access to the tax benefits provided according to their tax situation.

For the payment of the installment, the taxpayer must fulfil the following conditions:

• submit an application by 15th December 2020 inclusive. Upon request, the debtor may attach a schedule of installments containing the proposed amount of installments;
• do not incur budgetary obligations pending at the time of the emergency declaration and are not subsequently discharged;
• not to be in insolvency proceedings;
• not to be dissolved in accordance with applicable laws;
• file all tax returns;
• that its liability under the insolvency and/or joint and several liability laws has not been established, in accordance with the provisions of Articles 25 and 26 of Law 207/2015 on the Tax Procedure Code, as amended and supplemented.

Payment installments are not granted for a maximum of 500 lei, for individuals, or 5 000 lei for legal persons. Insolvent debtors can benefit from the simplified renegotiation of their current obligations arising from the emergency declaration, but also from those that have to pay installments in accordance with the Tax Procedure Code.

The simplified phasing-out does not involve the granting of guarantees and the legislator, in agreement with the Community of enterprises and the other social partners, has introduced an interest payment. The interest rate is reduced by half, that is 0.01% per day of delay, that is to 3.65% per year (compared to the Tax Procedure Code which provides for the interest rate of 0.02% per day of delay).

The Ministry of Finance said that the debtor can request the payment of installments by including in installments the debts incurred after the payment of the installment twice during the period of the installment. ” If the debtor loses the installment, he may also request that it be maintained twice. The debtor may attach a schedule of installments, including the proposed amount of installments, which may include differentiated payment rates.”

Among the advantages of this measure, the Ministry of Finance states that it is an alternative to the tax measures adopted after the emergency, for which the period of application ends on 25th October 2020.

Compared to the normal procedure for granting the installment, according to the Tax Procedure Code, the procedure and the documents submitted by the debtors are simplified, since the installment is granted only on request, without any other documents being presented. The deadline for settlement is significantly reduced – five days from the date of application, as a complete analysis of the debtor’s tax situation is not necessary;

Enforcement shall also be suspended for budgetary obligations subject to payment of the installment;

On the other hand, enforcement is suspended for budgetary obligations subject to installments and no security is provided, taking into account the short deadline for payment of the installment (12 months), the difficult financial liquidity situation faced by taxpayers compared to the previous period and the need to support the business environment to revitalize the company. The Ministry of Finance stated that budgetary obligations are not considered to have expired during the period in which the payment is to be rescheduled, and taxpayers have to pay all obligations arising during this period, with the possibility of extending payment periods.

The debtor may request, once during the period of validity of the payment installment, that the installment be adjusted by including in the schedule the obligations which are the condition for its continued validity;

It may also retain the installment for payment, which was lost, once for the period of validity of the installment, i.e., during the 12 months of installment.