I. Introduction of economic and budgetary measures following the declaration of
a State of Emergency (Emergency Ordinance no. 29/2020)
1. The State guarantees loans, credit lines and subsidises the related interest and
management fees
The program for supporting small and medium-sized enterprises – IMM INVEST ROMANIA,
which aims to provide state guarantee facilities for loans granted to small and medium-sized
enterprises by credit institutions is modified as follows:
Guarantees granted and percentage guarantee
The program consists of granting state guarantees, as follows:
a. Up to 80% of the amount of financing, excluding interest, commissions and bank
charges, is guaranteed for one or more loans for investments and/or one or more
loans/credit lines for working capital. The maximum amount of the loans or lines of
credit for financing the committed working capital may not exceed the average of the
company’s expenditure on working capital over the last two financial years, within the
limit of Lei 5,000,000. For investment loans, the limit for financing is 10,000,000 lei.
b. For micro-enterprises and small enterprises, up to 90% of the amount of financing,
excluding interest, commission and bank charges, shall be guaranteed for one or more
loans for investments and/or one or more loans/credit lines for working capital. The
maximum amount of the loans or lines of credit for financing the committed working
capital may not exceed the average of the company’s working capital expenditure over
the last two financial years, within the limit of Lei 500,000. In the case of investment
loans, the limit of financing is 1,000,000 lei.
For SMEs, micro-enterprises or small enterprises that have not submitted annual accounts at
the time of applying for a State-guaranteed loan, the maximum amount of financing for working
capital loans/credit lines is calculated as twice the average of the expenditure on working
capital resulting from the monthly trial balances.
Interest and commissions
The interest on loans/credit lines for financing working capital and investment loans is 100 %
subsidised by the Ministry of Public Finance.
The interest subsidy period shall run from the date on which the loans/credit lines granted after
the entry into force of this Emergency Ordinance and may last until 31 March 2021.
The administrative fee of the FNGCIMM, the authority responsible for granting the guarantees,
which is charged by the FNGCIMM for processing the loan application, is borne by the State
budget, by the budget of the Ministry of Public Finance within the framework of the State
subsidy programs associated with this program. Upon termination of the state subsidy
programs, the administration fee shall be borne by the borrower.
Eligibility criteria
To be eligible for this program, companies must cumulatively meet the following criteria:
a. They are not in difficulty within the meaning of points 20 and 24 of the Commission
Communication – Guidelines on State aid for rescuing and restructuring non-financial
companies in difficulty 2014/C 249/01, published in the Official Journal of the European
Union, C series, No 249 of 31 July 2014;
b. They are not in dispute, as defendant, with the Ministry of Public Finance and/or the
partner credit institution;
c. They are not in default with the repayment of loans, including lease financing, in the
six months preceding the application for the state guarantee, or if they are in default of
payment, they are classified in categories A, B, C in the database of the Central Credit
Risk Office;
d. They are not prohibited from issuing cheques at the time of credit approval and no
major incidents with promissory notes have been recorded in the database of the
Central Credit Risk Office in the last six months;
e. No insolvency proceedings have been opened against them under the applicable laws;
f. They provide the credit institution with security guarantees which, together with the
State guarantee and the legal mortgage, cover at least 100% of the amount of the
financing;
g. They shall be eligible in accordance with the credit institution’s internal guidelines;
h. They have no outstanding tax liabilities or other budgetary claims managed by the
central tax office within the meaning of Article 1(31) of Law No 207/2015 on the Tax
Code, as amended and supplemented. If the beneficiary has such outstanding
obligations, he must pay them from the loan/credit line for the working capital granted
under the scheme.
Duration of the financing
The maximum term of the financing is 120 months for investment loans and 36 months for
working capital loans or credit lines. Loans/credit lines for working capital may be extended by
a maximum of 36 months and will be repaid in the last year of the extension, subject to the
conditions set out in the methodological guidelines for the application of this Emergency
Regulation.
2. The payment deadlines for the payment of building, property and motor vehicle
tax are extended until 30 June 2020
In 2020, the deadline for the first payments or advance payments with a deadline of 31 March
for building, land and vehicle tax will be extended to 30 June inclusive. For advance payments
made by 30 June, the bonus set by the municipal council is granted.
The Sibiu County Council has announced that tax returns, building valuation reports and other
documents relating to taxable items can be submitted by 30 June by e-mail to the following
addresses
Taxes and fees natural persons: itpf@sibiu.ro
Taxes and fees legal entities: itpj@sibiu.ro
Execution natural persons: espf@sibiu.ro
Execution of legal entities: espj@sibiu.ro
3. The deadlines for restructuring of tax debts are extended
In our Newsletter No 3/2020 we informed about the extension of the circle of debtors who can
apply for a restructuring of tax and about the extension of the deadlines for the submission of
notifications until 31/03/2020.
Emergency Ordinance No 29/2020 now extends these deadlines again. The debtor who
wishes to restructure his tax debts is obliged to notify the competent tax authority about his
intention until 31 July 2020. If this is not done until then, the right to apply for the restructuring
of tax liabilities lapses.
The debtor must apply to an independent expert for the preparation of a restructuring plan and
the examination of the prudent private creditor. The application for restructuring may be filed
until 30 October 2020. If this is not done until then, the right to apply for the restructuring of
tax liabilities is lost.
4. No interest and surcharges on outstanding tax liabilities shall be due and
enforcement measures shall be suspended
In the case of tax liabilities due from the date of entry into force of Emergency Ordinance
29/2020, no interest on late payments and surcharges in accordance with the Tax Code shall
be calculated and owed. These tax liabilities are not considered outstanding.
Similarly, enforcement measures are suspended or not initiated, with the exception of the
enforcement measures applicable to the collection of tax claims, which are established by
criminal court decisions. The measures of suspension of enforcement by means of collection
on traceable amounts representing income and cash availability shall be effective from the
date of entry into force of the Act and shall be implemented by credit institutions or third parties
without any further formalities.
These tax measures will expire within 30 days of the end of the State of Emergency.
5. Taxpayers with annual profit tax and advance payment in 2020 have the option
to calculate the tax based on the current quarterly profit
Taxpayers who declare or pay profit tax annually and make quarterly advance payments
based on the previous year’s result may calculate the quarterly advance payments for 2020
based on the current quarterly result. This option regarding the method of calculation applies
to all quarters of fiscal 2020.
6. The deadline for submitting the declaration regarding the real beneficiary is
extended by 3 months from the date on which the State of Emergency ends
In our newsletter no. 3/2020 we informed about the obligation to submit the declaration on the
actual beneficiary by 21.07.2020 for companies established by 21.07.2019 and within 15 days
after approval of the annual accounts for newer companies.
Emergency Ordinance No 29/2020 now extends the time limits by three months from the date
of the end of the State of Emergency established by Decree No 195/2020 declaring a State of
Emergency on the territory of Romania, and the submission of this declaration is suspended
during the State of Emergency.
7. Deferral of payment for utility and rental services for companies holding
emergency certificates
During the State of Emergency, small and medium-sized enterprises which have partially or
totally ceased their activities due to decisions of the competent authorities and which hold the
emergency certificate issued by the Ministry of Economy, Energy and Business Environment
may benefit from the deferral of payment for utilities – electricity, natural gas, water, telephone
and Internet services and deferral of the rent for the building used as the registered office and
permanent establishment. This deferral of payment also applies to public notaries, lawyers,
judicial officers, and family doctors and dentists whose activities are directly affected by the
measures ordered by the authorities to prevent and combat the pandemic.
Attention:
The emergency certificate will be needed from April 2020, because the state of emergency
was ordered in March. The decree laying down the details for obtaining the emergency
certificate is currently still in progress. We will inform about the conditions as soon as they
are published in the Official Journal.
The emergency certificate does not correspond to the “force majeure” certificate. According
to art. 1351 of the Civil Code, any legal entity can activate the force majeure clause and
can apply for a force majeure certificate if, due to unforeseen and insurmountable events,
it is not able to fulfil its contractual obligations towards employees or a partner. The “Force
Majeure” certificate relieves the party claiming force majeure if the event is caused by
circumstances beyond the control of the party, for which the party is not responsible and
which cannot be remedied by the party. The party invoking force majeure must inform its
employees / partners of the force majeure event and submit to them the certificate issued
by the Chamber of Commerce and Industry (CCI). In order to obtain the certificate of the
existence of the force majeure event from the Chamber of Commerce and Industry, the
following documents must be submitted:
a. the application for the certificate, signed by the legal representative
b. a copy of the contract affected by the force majeure event, including the force
majeure clause
c. certificates issued by the competent bodies, authorities and institutions, on a case by
case basis (other than the Romanian Chamber of Commerce and Industry),
regarding the existence and effects of the event, its location, the date of
commencement and termination of the event;
d. the notices communicated to the contracting party in relation to the occurrence of the
event and its effects on the performance of the contractual acts.
The Chamber of Commerce and Industry shall charge a fee of 500€ (in lei, at the
exchange rate of the National Bank of Romania on the day of payment) + VAT for the
preparation of the certificate of force majeure.
II. Introduction of certain social security measures following the declaration of a
state of emergency (Emergency Ordinance No 30/2020)
1. The conditions under which parents are entitled to leave to care for children in
case of temporary closure of educational institutions have been amended (Law
19/2020)
In the last newsletter we informed about the adoption of the law according to which one of the
parents has a right to free working days for the care of the children if their educational
institutions are temporarily closed due to adverse weather conditions or other situations
classified as extreme by the competent authorities.
The Emergency Ordinance 30/2020 now specifies the following:
For school holidays (according to the school calendar, spring holidays are between 04 and 21
April), parents are not entitled to paid days off for childcare under Law 19/2020.
Likewise, the provisions of Law 19/2020 do not apply if one of the parents or the parent, in the
case of single parents, is in one of the following situations
– parental leave for the upbringing of children under the age of two
– is the personal companion of one of the dependent children
– is on holiday or unpaid leave
– is in technical unemployment
– has not received income from wages and salaries, income from self-employment, income
from intellectual property rights, income from agricultural, forestry and fish farming activities
subject to income tax
The days off are granted on the application of a parent, which is submitted to the employer of
the person who looks after the child during the period when the educational institutions are
closed. A declaration of personal responsibility of the other parent is added to the application
(see Appendix 1 to this newsletter) as well as copies of the birth certificate(s) of the child(ren).
With regard to the way in which the days off granted to the parents are paid, it was established
that for each day off the employer pays the parent an allowance equal to 75% of the basic
salary, but not more than 75% of the average gross salary (5,429 lei for 2020). The
remuneration is subject to taxation and the payment of social security contributions. The
Labour Office will reimburse the remuneration only if the taxpayer has paid all taxes and social
security contributions for the month in which the remuneration was paid.
The refund of paid remuneration for days off granted to the parents is made within 60 calendar
days of the submission of an application and the relevant enclosures by the employer to the
relevant employment agency. The documents required for the refund must be submitted by email
or by other agreed means within 30 days of payment of taxes and social security
contributions related to the allowance.
Attention: Employers can only request reimbursement of the net remuneration received by
the parent. Social security contributions and income tax are to be paid by the employer.
2. Conditions for entering technical unemployment
During the State of Emergency, during the temporary suspension of the individual employment
contract at the employer’s initiative (technical unemployment) and in the event of temporary
interruption or reduction of work, employees receive 75% of their basic salary. This allowance
is covered by unemployment insurance, but not more than 75% of average gross earnings per
employee.
These provisions benefit employees of employers who meet one of the following conditions:
a) the activity has been interrupted in whole or in part on the basis of decisions taken
by the public authorities during the period of the state of emergency and an
emergency certificate issued by the Ministry of Economy, Energy and the Business
Environment is available
b) the activity has been reduced due to the effects of the COVID 19 epidemic and the
company does not have the financial means to pay all salaries to its employees. In
this case, employers may benefit from the payment of remuneration for a maximum
of 75% of employees who have an active employment contract at the time of the
entry into force of the Regulation (21 March 2020). The remuneration will be paid
by the unemployment insurance fund and on the basis of a declaration made under
their own responsibility, stating that the employer has recorded a reduction in
monthly payments of at least 25% in the previous month compared to the average
payments in the period January-February 2020 and that they do not have the
financial means to pay all employees.
The remuneration is subject to taxation and payment of social contributions, but the
calculation, withholding, declaration and payment is made after receipt of the remuneration
from the unemployment insurance budget, i.e. up to and including the 25th of the following
month. This remuneration is not subject to the employment insurance that would otherwise be
borne by the employer.
In order for this allowance to be covered by unemployment insurance, employers must submit
a signed and dated application by e-mail from their legal representative, together with a list of
the persons for whom this allowance is claimed. Payment from the unemployment insurance
budget will be made no later than 30 days after submission of the documents.
III. H&A: Information on our own behalf
As of Monday, 23.03.20, the office of Herlan & Associates in Calea Dumbravii No. 40 will be
staffed by only one colleague. This colleague will receive the booking documents from all
clients and make them available to the other colleagues. The background to this measure is
the decision of the management of H&A that, in order to protect the employees, all colleagues work from home as a matter of principle and only an emergency staffing in the office is ensured. This measure is valid as long as the State of Emergency in Romania is declared.