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COVID-19: NEW FISCAL AND LOAN RELIEFS

COVID-19: NEW FISCAL AND LOAN RELIEFS

Last updated: 7 April 2020


I. FISCAL RELIEFS APPROVED BY THE GEO 33/2020

Here below, there are the main fiscal reliefs brought by the Government Emergency Ordinance no. 33/2020, published in the Official Gazette from March 30, 2020, aimed at supporting taxpayers impacted by the pandemic.

1. Bonuses for payment of the profit tax / tax on microenterprises’ turnover

a. Profit tax:

Taxpayers who pay the profit tax pertaining to the first trimester of 2020 until April 25, 2020 included, benefit from a bonus calculated on the due tax, namely:

(i) 5% for large taxpayers;
(ii) 10% for medium sized taxpayers:
(iii) 10% for all the taxpayers not included at points (i) and (ii) hereinabove;

These provisions also apply in the following cases:


  • taxpayers who chose a financial year other than the civil year and who may benefit form the bonuses hereinabove only if they pay the tax due for the trimester / make the anticipatory trimester payment until the due date from April 25 to June 25, 2020.


  • companies from tourism and public food service, for the tax on profit pertaining to the first trimester of 2020.



b. The tax on the turnover of microenterprises

Taxpayers who pay their tax on the turnover of microenterprises pertaining to the first trimester of 2020, until April 25 2020 included, shall benefit from a bonus of 10%.

2. Exoneration for the payment of VAT at customs for importation of medicines, protection equipment that may be used for testing, treatment of coronavirus

During the state of emergency and for the 30-day period following it, custom authorities shall not require VAT payment for all imports of protection equipment, other medical devices and equipment, as well as for all imports of medicines or sanitary material that can be used for prevention, containment, treatment and testing against COVID-19, which are specifically regulated under the annex to the GEO no. 33/2020.

II. LOAN RELIEFS

The Emergency Ordinance of the Government no. 37/2020 (OG 261/2020) regards the granting of loan relieves to certain categories of debtors, for loans signed up for with credit institutions and non-bank financial institutions (IFN).

1) Reliefs for bank and non-bank loans

The debt-relief provisions state that due loan repayments pertaining to loans granted by loaners (credit institutions and non-bank financial institutions) to borrowers until the entry into force of the GEO no. 37/2020 accounting for principal, interests and bank fees are suspended, upon request of the borrower, for a maximum 9-month term, without thus exceeding December 31, 2020.

The interests due by the borrower corresponding to the amounts reaching maturity whose repayment are suspended shall be capitalized at the loan balance existing at the end of the period of suspension. The capital thus increased shall be subject to staggering repayment during the remainder term until the new maturity date of the loans, after the suspension period.

As an exception therefrom, for mortgage residential loans signed up for by individuals, the interests pertaining to the suspension period shall be calculated according to the provisions of the loan agreement and shall be deemed a distinctive and independent debt with respect to the other provisions of the loan agreement. Such debt shall be charged with 0% interests (meaning that no capitalization of interests apply to mortgage residential loans) and shall be repaid by the borrower in 60 instalments.


2) Beneficiaries

The main beneficiaries of such loan relief (the borrowers) are: individuals, self employed persons (Romanian PFA), sole proprietorship and family enterprises, liberal professions and those carried out under the special laws, and legal persons party to loan agreements or leasing agreements, except for credit institutions.

The categories of debtors hereinabove may benefit from the provisions of GEO n° 37/2020 conditional upon certain conditions being satisfied, among which the most important one is the one with respect to the revenues of the debtor having been directly or indirectly impaired by the crisis of the COVID-19 pandemic, pursuant to the Norms of enforcement of this GEO (published in the Official Gazette no. 270/2020.

3) Loans qualifying for the relief package

  • The loans signed up for before the entry into force of the GEO 37/2020

  • The loans have not been declared due for payment before the entry into force of the ordinance.

  • The relief under point 1) hereinabove may be granted only for loans not registering late repayment of instalments at the date of the state of emergency being declared (16.03.2020) or borrowers must already have covered late repayments until the date when they apply for a suspension of loan repayment.


In order to benefit from the debt-relief package enacted by the GEO 37/2020, borrowers (except for the individuals) must satisfy cumulatively the following conditions:

  • (i) they ceased partially of totally their activity further to the decisions rendered by the public authorities during the state of emergency and they hold an Emergency Status Certificate issued by the Ministry of Economy, Energy and the Business Environment or (ii) they hold an Emergency Status Certificate, on grounds of the declaration under sole responsibility of the debtors that their business is impaired by the a drop of minimum 25% of the turnover or revenues during the month of March 2020 as compared to the average income pertaining to the months of January and February 2020.

  • Are not subject to insolvency procedure at the date when they apply for a repayment suspension, according to the information available on the internet site of the Trade Registry.


4) The steps to be taken by borrowers to benefit from loan reliefs:

In order to be benefit from the loan repayment suspension, the borrowers shall:

  • Send a request for suspension to the creditors within the 45-day term since March 30, 2020.

  • Such request may be filed even verbally, via telephone, and in this respect the creditor shall ensure that the telephone conversation with the borrower is recorded;

  • The borrower may chose to defer the payment of the instalments reaching maturity, accounting for principal, interests and fees for a period ranging from 1 to 9 months, but without thus exceeding December 31, 2020.


Bucharest, April 6, 2020

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