Last updated: 7 January 2021
The New Year comes with many legislative and fiscal changes but also with some extended deadlines aimed mainly at supporting the economic activity of companies, in the context of the COVID-19 pandemic.
Here below there are some of the main legislative and fiscal measures in force starting with 2021.
LABOR LAW
The state support for technical unemployment has extended until June 30, 2021
Employees whose activity has been suspended by the employer’ initiative, in the context of the pandemic, may benefit from a technical unemployment allowance from the state set at 75% of the basic salary, but not more than 75% of the average gross salary (currently amounting to LEI 5,429 ).
According to the GEO no. 120/2020, the allowance is calculated for the number of days in which the employee's activity was suspended and is subject to taxation and payment of mandatory social contributions, in accordance with the provisions of Law no. 227/2015 (Fiscal Code).
The measure, in force since April 2020, was extended until June 30, 2021, by GEO no. 211 of December 4, 2020, published in the Official Gazette no. 1189 of December 7, 2020.
Reduction of working time during the state of alert
The employer may reduce, under certain conditions, by a maximum of 50% the working time of employees, for a period of at least 5 working days per month.
Employees affected by this measure are entitled to an allowance of 75% of the difference between the gross basic salary provided for in the employment agreement and the gross basic salary for the hours actually worked, as a result of the reduction in the working hours.
This allowance complements the due salary rights, based on the time actually worked. The applicability of this measure has been extended for up to 3 months after the cessation of the state of emergency / alert by the Law no. 282/2020.
Benefits for hiring the unemployed over 50 years old and young people
According to the GEO no. 220/2020, published in the Official Gazette no. 1326 of December 31, 2020, employers who hire, between January 1st and September 1st 2021, under an indefinite term employment contract , people over the age of 50 whose employment relationships were terminated for reasons not attributable to their person, during the state of emergency / alert or persons aged between 16 and 29, receive monthly, for a 12–month period, for each such 50% of the employee's salary, but not more than LEI 2,500 / employee. In order to benefit from this measure, the employer must maintain employment for at least another 12 months after the 12-month period during which the support is granted.
The allowance for daily workers, available until June 30, 2021
Upon request of the beneficiary of works people providing occasional unqualified services (daily workers) can receive an allowance of 35% of the remuneration due for the working day for a period of 3 months.
Receiving this allowance is conditional upon such people providing services for facilities acting in the fields regulated under art. 13 of the Law no. 52/2011 and whose activity was impaired by an interruption or restriction as a result of the SARS-CoV-2 virus.
The allowance is paid by the beneficiary of works from his own budget, at the moment of the payment of the equivalent value of the daily work, and it will be recovered from the state budget. The allowance is subject to taxation and payment of mandatory social contributions, according to the Law no. 227/2015.
The granting of this incentive was extended until June 30, 2021.
The state support for employees employed under a fixed-term employment agreement , extended until June 30, 2021 The GEO no. 220/2020 also extends, until June 30, 2021, the possibility for the employer to benefit, for a period of 3 months, from a state granted support for the re-employment of employees with a fixed-term employment agreement of at least 3 months, with normal 8 hours a day schedule. The allowance amounts to 41.5% of the gross employment salary of the employee concerned, thus without exceeding 41.5% of the average gross salary in 2020.
Paid days for parents supervising their children attending on-line classes
The GEO no. 220/2020 extended until June 30, 2021 the possibility of granting, under certain conditions, paid days to parents needing to supervise their children (under 12 years / 26 years for disabled children ) in case of limitation / suspension of educational activities requiring physical presence, as a result of the spread of SARS-CoV-2 coronavirus.
The allowance granted amounts to 75% of the basic salary, but not more than 75% of the average gross salary used when drawing up the state social insurance budget. This allowance is paid initially by the employer from its own budget and can be later recovered from the state.
The suspension of the individual employment agreement as a result of the state of emergency being enacted introduced in the Labour Code
The law no. 298/2020 of December 24, 2020, published in the Official Gazette no. 1293 of December 24, 2020, introduced a new article in the Labour Code, providing that the employees affected by the suspension of the individual employment agreement at the employer’s initiative due to the temporary suspension and / or reduction of activity entailed by the enactment of the state of emergency benefit from an allowance of 75% of the basic salary corresponding to the position held, but not more than 75% of the average gross salary in force, for the entire duration of the state of emergency.
The employer may supplement this allowance with amounts accounting for the difference of up to at least 75% of the basic salary corresponding to the position held by the employee concerned.
The allowance is subject to taxation and payment of mandatory social contributions, as provided for under the law no. 227/2015 regarding the Fiscal Code.
FISCALITY
New deadline for early VAT refund (prior to tax inspection): March 31, 2021
Increase of the turnover threshold up to which a company registered for VAT purposes applies VAT on collection (Law no. 296/2020) from 2,250,000 lei to 4,500,000 lei (for the previous year)
New deadline for submitting the Single return on income tax and social security contributions: the 25th of May 2021
The deadline for the submission of the Single return on income tax and social security contributions due by individuals, as well as the deadline for the payment of income tax and compulsory social contributions due by individuals were previously set for March 15, 2021. These obligations have now been postponed until May 25, 2021.
The exemption from the payment of the specific tax for the HoReCa sector
According the GEO no. 226/2020, published in the Official Gazette no. 1332 of December 21, 2020, for the year 2021, the taxpayers who owe the specific tax, in accordance with Law no. 170/2016 (restaurants, hotels, pensions, etc.), do not owe such tax for a period of 90 days starting with January 1, 2021.
In order to benefit from this measure, taxpayers calculate the specific tax by dividing the annual specific tax by 365 calendar days and multiplying the resulting value by the difference between 365 calendar days and the 90 days of exemptions.
Fiscal facilities regarding the aid granted to teleworking employees
According to the law no. 296/2020 amending the law no. 227/2015 on the Fiscal Code, published in the Official Gazette no. 1269 of December 21; 2020, the amounts paid by employers to cover utilities’ expenses of teleworking employees (such as electricity, heating, water, data subscription) and the purchase of office furniture or equipment, are considered deductible up Lei 400 per employee, per month, corresponding to the number of days in the month in which the employee works in telework. These amounts may be granted without the employee having to provide supporting documents.
Extension of the validity of holiday vouchers issued in 2019 and 2020
The validity of holiday vouchers issued between March 2019 and November 2020 has been extended until December 31, 2021. It should be mentioned that holiday vouchers can be granted based on GEO no. 8/2009 by the employer to cover the costs related to the annual leave of the employee.
The maximum of the amounts that can be granted as holiday vouchers represents the equivalent of a maximum of 6 gross minimum basic salaries per country / employee.
Exemption from VAT payment
Imports of medical devices for the in vitro diagnosis of COVID-19, of vaccines anti- COVID-19, as well as related vaccination and testing services, performed until the 31 December 2022, are exempt from VAT with the right of deduction. VAT exemption only applies to the delivery of medical devices for the in vitro diagnosis of COVID-19 that comply with European requirements.
Remdesivir's intra-community acquisitions, made until December 31, 2022, based on the framework contract signed on October 7, 2020 by the European Commission with the pharmaceutical company Gilead for the delivery of Veklury, the trade name of Remdesivir, are also exempt from VAT.
Suspension of sanctions on cash registers for traders
The sanctions that can be imposed on traders who fail to connect their cash registers to the Romanian tax authorities (ANAF) are suspended until March 31, 2021, according to the GEO no. 226/2020.
At the same time, the deadline by which economic operators have the obligation to provide the vending machines that operate on card payments, as well as banknotes or coins acceptors of with fiscal electronic cash registers has been extended until December 31, 2021
Effects of enforcement measures
Between May 14 and December 15, 2020 included, as well as from January 1stto March 31, 2021 included, debtors who have notified the fiscal body regarding the cancellation of ancillary tax obligations and who are subject to execution measures by seizure, can until March 31, 2021 make the payment of the amounts communicated by the letters of service, starting from the unavailable amounts (other than those representing payment obligations subject to a suspension of payment for cancellation).
Maintaining of the price ceiling for the application of 5% VAT on delivery of houses of maximum 120 m2
In 2021, the 5% VAT rate in force for the delivery of houses with a maximum area of 120 m2, annexes excluded (the land on which they are built included), accounting for maximum LEI 450,000 (excluding VAT) is maintained. Thus, the increase of the price ceiling from LEI 450,000 to EUR 140,000 provided for by the Law no. 296/2020 is postponed to January 1, 2022, according to OUG no. 226/2020.
Fiscal consolidation at group level
According to law no. 296/2020, companies belonging to the same group can recover their losses by offsetting the profits made by other companies in the group; they are thus able to calculate and pay a consolidated income tax at the level of the group.
This facility is accessible to Romanian legal entities meeting a number of conditions, including: (i) they are part of a Group (the minimum condition is to hold a voting right or a 75% shareholding, for an uninterrupted period of at least one year), (ii) is a payer of income tax; (iii) is not in dissolution / liquidation; (iv) is not present in another tax group in the field of corporate taxation.
The period of application of the fiscal consolidation system in the field of profit tax is 5 fiscal years, calculated starting with the first year of application of the fiscal consolidation system and until the fiscal group no longer exists. The system is optional.
Each member of the tax group taking this option of tax consolidation must determine the tax result individually, while the consolidated tax result of the tax group is calculated quarterly / annually, cumulated from the beginning of the fiscal year.
The declaration and payment of the profit tax related to the respective fiscal year is made by the responsible legal person, until the deadline for submitting the profit tax return.
Each member of the tax group must prepare the transfer pricing file which will include both the transactions carried out with the members of the tax group and with the affiliated entities outside the tax group. The transfer price files prepared by each member of the tax group will be presented by the responsible legal entity.