Order no. 5521/2024 for the approval of the Procedure for the annulment of some budgetary obligations, published in the Official Gazette Part I no. 944 of 19 September 2024

The procedure for the annulment of some budgetary obligations ("Procedure") according to GEO no. 107/2024 ("GEO") was approved by the Minister of Finance by Order no. 5521/2024 and entered into force on September 19, 2024.

1.  SCOPE

The procedure applies to the budgetary obligations administered by the central tax body, including by the customs authorities.

The procedure does not apply to budgetary obligations administered by other public institutions or authorities and which are not in the records of the central tax body.

The procedure applies to the following categories of ancillary payment obligations:

• interest/late payment surcharges;

• late payment penalties/non-declaration penalties/penalties;

• any other ancillary payment obligations.

Ancillary payment obligations and those related to the main budgetary obligations established by tax returns submitted after the expiry of the limitation period of the right to establish tax obligations may be subject to annulment.

2.  BENEFICIARIES

The debtors who can benefit from the facilities provided for in the Procedure are all categories of debtors, this category also including:

• debtors declared insolvent, according to the law;

• persons to whom joint and several liability has been established according to the Tax Procedure Code, or liability according to the insolvency legislation, for the budgetary obligations related to the period prior to August 31, 2024 inclusive, regardless of the date of issuance of the decision to incurr liability or the final date of the court decision to incurr liability;

• debtors in insolvency proceedings or in the winding-up procedure;

• debtors who on August 31, 2024 inclusive register only unpaid ancillary payment obligations related to the main budgetary obligations paid by this date, and the ancillary obligations have not been paid by September 6, 2024;

• debtors who have been notified of tax decisions related to main budgetary obligations due until August 31, 2024 inclusive, as a result of a tax audit in progress on September 6, 2024, regardless of the date of communication of the tax decision;

• taxpayers who have submitted corrective returns correcting main budgetary obligations with maturities prior to August 31, 2024 inclusive, in certain situations and with some restrictions.

For individuals who carry out economic activities independently or practice liberal professions, the tax authority verifies the fulfillment of the GEO conditions separately, respectively separately for the budgetary obligations existing on the unique registration code/tax registration code, compared to those registered on the personal identification code/tax identification number.

Therefore, the notification regarding the intention to benefit from the annulment of budgetary obligations and/or the request for annulment of budgetary obligations, as the case may be, shall be submitted separately by the natural person, depending on the tax identification code on which he/she registers budgetary payment obligations.

For debtors who have established tax registered secondary offices, the tax facilities are granted both for the budgetary obligations owed by them and for those of their secondary offices and are analyzed in relation to the total obligations of the debtor and its secondary offices.

Debtors without tax domicile in Romania who have payment obligations due until August 31, 2024 inclusive can benefit from the tax facilities provided by the Procedure.

In the case of debtors who, on 25 November 2024 inclusive, have pending VAT refund applications for which, after that date, the tax authority rejects the refund in whole or in part, they benefit from the annulment of the ancillary budgetary obligations if (i) they submit a request for annulment of the budgetary obligations; and (ii) pay within 30 days from the date of communication of the decision rejecting the refund of the budgetary obligations on which the annulment depends,  unpaid by offsetting with the amounts individualized in the reimbursement request.

3.  PROCEDURE FOR GRANTING DEFERRAL OF PAYMENT

Debtors who intend to benefit from the annulment of ancillary budgetary obligations may send a NOTIFICATION to the tax authority regarding their intention, no later than the date of submission of the request for annulment of ancillaries, but no later than November 25, 2024.

This notification can be submitted:

• through the "Virtual Private Space" service (hereinafter referred to as "SPV");

• at the registry of the competent central tax body or by mail, in the case of individuals who are not enrolled in the SPV.

After receiving the notification, the tax authority verifies whether the debtor has fulfilled its declarative obligations by the date of submission of the notification, performs the clearing, offsetting and any other operations necessary in order to establish with certainty the budgetary obligations that constitute a condition for granting the tax facility.

Within 5 working days from the date of submission of the notification, the tax authority shall issue ex officio the tax attestation certificate, which it shall communicate to the debtor together with the decision on the ancillary payment obligations.

If there are inconsistencies between the amounts entered in the tax certificate and the debtor's accounting records, the debtor may request their agreement within no more than 3 working days from the date of communication of the tax certificate.

Subsequently, the tax authority issues the decision to postpone the payment of some budgetary obligations, as well as the address for the temporary cessation, total or partial, of the forced execution, or, as the case may be, the notice of rejection of the notification, if the debtor does not fall into any of the cases provided for in the GEO.

The effects of the decision to defer payment are as follows:

• the forced execution procedure does not start or is suspended, as the case may be;

• the extinguishment shall not be carried out until the date of resolution of the request for annulment of budgetary obligations or until November 25, 2024 inclusive, as the case may be.

In the event that the debtor does not submit the request for annulment of budgetary obligations by November 25, 2024 inclusive, the tax authority issues and communicates the decision to lose the validity of the deferral of payment of budgetary obligations.

In conclusion, the notification regarding the intention to benefit from the annulment of some budgetary obligations is not mandatory, but aims to the issuance of the decision to defer payment and to obtain the related effects.

4.  PROCEDURE FOR GRANTING THE ANNULMENT OF BUDGETARY OBLIGATIONS

In order to benefit from the annulment of budgetary obligations, debtors must submit an APPLICATION for annulment of budgetary obligations to the competent central tax body.

The annulment request may be submitted after the conditions for granting the annulment have been met, but no later than November 25, 2024 inclusive.

By exception, in the case of tax liabilities with maturities prior to August 31, 2024, inclusive and individualized in tax decisions issued as a result of a tax audit in progress on the date of entry into force of the GEO, the annulment request must be submitted after the clearance of the main tax liabilities individualized in the tax ruling issued as a result of the tax audit,  but no later than 90 days from the communication of the tax decision.

On the date of submitting the request for annulment, the debtor must have extinguished all the main and ancillary budgetary obligations administered by the central tax body with payment terms between September 1, 2024 and the date of submitting the request for annulment of some budgetary obligations.

The annulment request is settled within 5 working days from the date of submission.

In case of rejection, before issuing the decision to reject the request for annulment of budgetary obligations, the competent tax authority has the obligation to hear the taxpayer, on which occasion it indicates the conditions that have not been met.

In the event that a taxpayer has been notified of a rejection decision, and subsequently meets the conditions provided by the GEO, he or she may submit a new annulment request until November 25, 2024 inclusive.

The request for annulment of budgetary obligations can be withdrawn by the debtor at any time, by submitting a request to the tax authority. By withdrawing the request, the debtor maintains the right to submit a new request for annulment of budgetary obligations, in compliance with the conditions provided in this regard by the GEO.

5.  PARTICULAR ASPECTS IN THE CASE OF PERSONS WHO HAVE AN ONGOING PAYMENT
     RESCHEDULING

In the case of debtors who have an ongoing payment rescheduling and wish to benefit from the annulment of ancillaries, they may submit the request for annulment of budgetary obligations, without the need to notify the tax authority of their intention.

If, on the date of submission of the application, the payment rescheduling in progress includes only ancillary payment obligations, together with the decision to annul some budgetary obligations, the decision to complete the payment rescheduling shall be issued and communicated, without the debtor having to pay the remaining ancillary tax liabilities from the payment facility granted.

In the event that the payment rescheduling loses its validity, the debtor may request, to the extent that he/she meets the conditions provided by the GEO, the annulment of the ancillary payment obligations according to the provisions of Article II and/or, as the case may be, Article XVI of the GEO.

6.  CONCLUSIONS

The procedure approved by Order no. 5521 of 19.09.2024 of the Minister of Finance establishes the manner of applying the provisions of GEO no. 107/2024 regarding the possibility of debtors to benefit from the annulment of ancillary tax obligations.

It presents in detail both the tax obligations to which it applies and the debtors who can benefit from this facility, as well as the steps to be taken by both the debtors concerned and the tax authorities that have a role in solving annulment requests.

We invite you to contact our consultants in order to obtain more information on the conditions for benefiting from the provisions of GEO no. 107/2024, as well as their applicability for your business. We can also support you in the procedure to be followed in order to benefit from the tax amnesty according to GEO no. 107/2024.

For more details, you can contact us directly at the contact details below.