Government Emergency Ordinance no. 30 of August 30, 2017 (“GEO 30/2017”) was published in the Official Gazette no. 708 on August 31, 2017.
Contents of GEO no. 30/2017
The provisions of GEO 30/2017 significantly amend and supplement the provisions of Law no. 207/2015 regarding the Fiscal Procedure Code (the “Fiscal Procedure Code”) with regard to a series of aspects covering: (i) the principles applicable to the administration of tax debt, (ii) liability for tax debt, (iii) communication of tax deeds, (iv) registration for tax purposes, (v) tax audit, (vi) rescheduling of tax debt, (vii) enforcement of tax debts etc.
Documents provided to the tax authorities in a foreign language
GEO 30/2017 provides that petitions, certificates as well as other documents written in a foreign language shall not be taken into account by the tax authorities, if a Romanian translation is requested and the taxpayer fails to provide it to the authority.
Liability for the tax debt of individuals performing independent activities
GEO 30/2017 provides that, in case the assets affected to the performance of the independent activity do not suffice so as to cover the relevant tax debt, all other assets of the individual shall be used to settle the debt.
Joint liability for the debtor’s tax obligations
GEO 30/2017 provides that the issuer of the letter of guarantee/insurance policy shall be held jointly liable with the debtor, for the payment of its tax liabilities, in case of failure to pay the amounts set under the letter of guarantee/insurance policy upon the request of the tax authorities, as per the law.
In addition, GEO 30/2017 provides in a very broad and general manner that the persons who, in bad faith, caused the accumulation of tax debt/avoidance of payment by debtors for whom the opening of the insolvency procedure is requested as per the law, shall be held jointly liable with the debtor for its outstanding tax liabilities.
Communication of tax deeds
GEO 30/2017 harmonizes the procedure for the communication of tax deeds with the provisions of the Civil Procedure Code (as regards the communication of procedural deeds).
Refusal to provide information to the tax authorities
GEO 30/2017 excludes public notaries and bailiffs from the list of persons who can legally refuse to provide information to the tax authorities with regard to aspects of which they became aware of as a result of performing their professional activities.
Registration for tax purposes
GEO 30/2017 provides that, for the purpose of administering social contributions, the individual’s personal numeric code shall serve as fiscal identification code.
In addition, GEO 30/2017 provides that credit institutions shall request the tax authorities to provide a fiscal identification code whenever non-residents who do not possess such a code wish to open a bank account or safe box with the respective institution.
The inactivity of certain categories of taxpayers
GEO 30/2017 provides that taxpayers: (i) against whom the simplified insolvency procedure was opened, (ii) are in bankruptcy or (iii) for whom a decision of dissolution was issued or adopted shall be declared inactive only if they fail to fulfil their declaring obligations within a semester.
Registration of tax returns
GEO 30/2017 provides that tax returns erroneously registered with a non-competent tax body shall be deemed to be correctly registered at the date of registration with the respective non-competent body. However, in case the tax return is filed directly with the registry of a non-competent body and the personnel of such body observes that it is not competent as per the law, the registration shall be declined and the taxpayer shall be guided to make the registration with the competent body.
GEO 30/2017 provides that the selection of the periods forming the object of the tax audit shall be made based on the tax risk identified by the tax authorities.
In addition, GEO 30/2017 provides that an unannounced audit may be performed simultaneously with a tax audit, with regard to the same operations and tax obligations of the taxpayer, in case verifications are required, in other pending procedures, with regard to operations and obligations for which a tax audit is pending. In such case, the inspectors performing the tax audit shall be entitled to perform the unannounced audit. Also, the duration of performing the unannounced audit shall not be taken into account in the duration of the tax audit.
Furthermore, GEO 30/2017 provides that the tax audit performed by the central or local tax authorities can also consist of actions of “prevention and conformation”. The legal text does not elaborate with regard to the meaning of such actions.
Tax audit of individuals
GEO 30/2017 provides certain amendments to the procedure of performing the tax audit of individuals, as follows:
(i) the preliminary documentary verification, as a standalone phase of the audit is eliminated and is included in the risk assessment that serves as basis for determining the individuals to be audited;
(ii) the individuals are informed of the commencement of the audit via the notice of verification, which must include the request addressed to the individual to provide the tax authority with the patrimony declaration;
(iii) the duration of the audit procedure cannot exceed 365 days as of the communication of the notice of verification.
GEO 30/2017 provides that the payment term for tax liabilities arising out of rectifying statements is the date when such rectifying statement is registered with the tax authorities
Outstanding tax debt
GEO 30/2017 expressly provides that a taxpayer shall not be seen as registering outstanding debt in case the total amount of outstanding tax debt is equal or lower than the amounts for which a restitution/reimbursement claim is pending.
GEO 30/2017 provides that the validity of the tax certificate issued for individuals is up to 90 days, except for the individuals who perform independent activities or liberal professions.
Payment of tax obligations
GEO 30/2017 provides that with regard to the payment of tax obligations administered by the central and local tax authorities, the taxpayer shall perform the payment under a single payment order for the State Treasury, in a single account. The types of obligations falling under this provision shall be indicated in further legislation.
Order of settling tax debt
GEO 30/2017 provides that the concrete means in which the taxpayer’s tax debt was settled shall only be communicated in case the taxpayer files a request in this respect with the tax authorities.
Interest owed for taxes administered by the central tax authority, for which the fiscal period is annual
GEO 30/2017 provides that the provisions regarding the interest owed for taxes administered by the central tax authority for which the fiscal period is annual, shall also apply to social contributions.
Late payment penalty
GEO 30/2017 expressly provides that no late payment penalties shall be owed for principal tax liabilities for which the non-declaring penalty is applied.
Rescheduling of tax debt
GEO 30/2017 provides amendments to the procedure of rescheduling of tax debt, with regard to:
(i) the payment of delay penalties;
(ii) the possibility to benefit from differentiated payment installments;
(iii) exclusion of perishable goods from the list of guarantees that may be set up by the debtor in order to benefit from the rescheduling of payments;
(iv) prolongation from 90 to 180 days of the
term for payment of the tax debt unpaid at the time of communication of the rescheduling decision and that does not form the object of rescheduling;
(v) possibility to include fines in the object of rescheduling;
(vi) for small tax risk debtors, the period of time in which no tax debts have to be registered has been modified from 6 to 12 months;
(vii) in addition to the postponement of the payment of penalties, the postponement of a percentage of 50% of the interest mentioned in the tax certificate, corresponding to the rescheduled tax debts, has also been provided.
GEO 30/2017 provides, within the category of guarantees that can be set up upon the tax authority’s request, the letter of guarantee issued by a non-banking financial institution, registered in the Romanian National Bank’s registries for issuance of guarantees.
GEO 30/2017 expressly provides that provisional measures become enforcement measures on the expiry of (i) the 15 days term as of the communication to the debtor of enforcement notice or, as the case may be, (ii) the 30 days term as of the communication to the debtor of the enforcement notice, in case of garnishments, or (iii) on the expiry of the suspension of the enforcement procedure.
In case provisional measures are set up and the criminal authorities are notified as per the law, GEO 30/2017 provides that the provisional measures remain in force until the final resolution of the criminal case, either by the criminal authorities or by the court, as per the law.
The debtors (i) for which the insolvency law applies and (ii) who do not own traceable assets have been expressly excluded from the applicability of provisional measures.
Enforcement of tax debt
GEO 30/2017 provides certain amendments as regards the enforcement procedure of tax debt, as follows:
(i) the enforcement of tax debt shall apply differently depending on the amounts at stake and the seniority of tax debts;
(ii) if the debtor notifies the tax authority of its intention to submit a letter of guarantee / insurance policy, the enforcement is suspended or does not commence. However, the enforcement will continue or commence if the debtor does not submit the letter of guarantee/ insurance policy within 45 days as of the date of communication of the tax decision.
(iii) GEO 30/2017 eliminates previous provisions that allowed the setting up of garnishments over the debtor’s bank accounts only after the expiry of a 30 days’ term as of the date of communication of the garnishment notice.
(iv) in case the value of the tax debt is higher than RON 500,000, no sequester over movable and/or immovable assets shall be set up, in case the value of such assets is lower than 1% of the tax debt.
Extinguishing tax debt by other means
GEO 30/2017 provides amendments with regard to the enforcement of insolvable debtors, as follows:
(i) the category of insolvable debtors has been extended also to (a) debtors who own assets for which the capitalization covers only the estimated enforcement expenses, at most, and (b) debtors who own assets covering less than 1% of the tax debt, if the value of the tax debt is higher than RON 500,000.
(ii) the tax debt due by debtors who perform independent or liberal professions, associations and other entities without legal personality that are erased from their relevant registries, is annulled after the erasure of such debtors, including in the cases where the debt has been undertaken by other persons.
(iii) tax debt is also annulled in the following cases: (a) following the closing of the insolvency procedure, if the debt is not registered with the table of creditors as per the law, provided that the debtor was not sentenced for simple or fraudulent bankruptcy or was held liable for the performance of fraudulent payments or transfers, or his liability was triggered, as per the law; and (b) following the closing of the judicial reorganization procedure, where the tax debt is not allowed in the reorganization plan confirmed by the syndic judge, under the reserve that the debtors follow the approved reorganization plan.
Enforcement in special cases
GEO 30/2017 introduces a new chapter (no. XII1) for special cases of enforcement. This chapter provides the procedure of enforcement of debt set under court decisions issued in criminal matters, as well as the enforcement procedure applicable in case of insolvent taxpayers.
Suspension of tax deeds
GEO 30/2017 provides certain amendments to the regime of suspension claims filed by taxpayers under the provisions of Law no. 554/2004, as follows:
(i) the judicial bond applicable for filing a suspension claim with the courts of law, in case of tax deeds not susceptible to monetary valuation, amounts to RON 1,000;
(ii) in case of suspending main tax liabilities, the accessory tax liabilities are also suspended, even if such accessories are set under a distinct tax deed for which the suspension was not claimed.
(iii) for the period in which the tax deed is suspended, the taxpayer does not owe non-declaring penalties.
(iv) if the taxpayer has paid the judicial bond for filing a suspension claim under art. 14 of Law no. 554/2004, no additional bond is necessary in case a subsequent suspension claim under art. 15 of Law no. 554/2004 is filed with the court; this provision only applies if, at the date the court settles the suspension claim filed under art. 15 of Law no. 554/2004, the judicial bond previously paid is effectively registered at the court’s disposal.
GEO 30/2017 introduces new sanctions, as follows:
(i) the failure to timely submit the questionnaire required for determining the residence upon departure / arrival in Romania is regarded as contravention and is subject to a fine of RON 50 to RON 100; and
(ii) the failure to submit the letter of guarantee / insurance policy, in case the taxpayer expressed his intention in this regard, is regarded as a contravention and is subject to a fine of RON 500 to RON 5,000, depending on the quality of the taxpayer.