I. On 21 March a series of measures aimed at supporting the business community during the state of emergency declared due to Covid-19 were published in the Romanian Official Gazette.
These include:
1. The Ministry of Finance is to guarantee up to 80% of the value of financing granted to SMEs (or 90% in the case of small businesses and micro-enterprises). The maximum value of the credits to be awarded for the financing of working capital cannot exceed average expenditure on working capital for the last two fiscal years and is capped at RON 5 million (or RON 500,000 or RON 1 million for micro-enterprises and small businesses, respectively). For investment loans, the maximum value of financing will be RON 10 million.
The loan guarantee period for working capital is to be set at 36 months (extendable by a further 36 months), while for investments it will be 120 months.
The Ministry of Public Finance will waive the interest accrued on the loans to be guaranteed, valid from the moment the loan is granted until 31 March 2021 (or later in the case of extension).
All outstanding fiscal obligations and other debts to the state budget will be paid from the working capital loans granted under this programme.
2. For fiscal obligations due as of the date of entry into force of the emergency ordinance (through which all these measures were implemented) and still unpaid upon cessation of the measures in force during the state of emergency, no late payment interest and penalties due as per the Fiscal Procedure Code will be enforced. This facility will be maintained for a further 30 days after the state of emergency is declared over.
3. Corporate taxpayers who apply the annual calculation system, and hence perform quarterly advance payments based on the previous year’s profits, will now be able to pay corporate tax based on the taxable profits actually calculated for each quarter of 2020. This applies irrespective of whether the taxpayer’s fiscal year matches the calendar year.
4. Extension of the payment deadline for local taxes on buildings, land and vehicles from 31 March to 30 June 2020 (n.b. the bonuses awarded by the authorities remain in place).
5. The deadlines for submitting notifications and requests with a view to the restructuring of debts towards the state budget have been postponed until 31 July and 30 October 2020, respectively.
As a short reminder, taxpayers (i.e. legal entities, with certain exceptions) may benefit from a restructuring of their debts towards the state budget (both principal amounts and late payment interest and penalties) outstanding as of 31 December 2018, where these were not paid by the date of issue of the tax certificate and where they amount to RON 1 million or more.
6. Suspension or non-commencement of the measures of enforced collection.
7. During the state of emergency, all small and medium-sized enterprises in possession of a state of emergency certificate issued by the Ministry of Economy, Energy and Business Environment will benefit from the deferred payment facility for utilities and rent services (under certain conditions).
8. Postponement of payment of rent and utilities for registered headquarters and secondary offices
During the state of emergency, small and medium-sized enterprises (as defined by law) that have interrupted their activity in whole or in part as a result of the decisions issued by the competent public authorities and who hold a state of emergency certificate issued by the Ministry of Economy, Energy and Business Environment are granted a postponement in respect of their payment of utility bills – i.e. electricity, natural gas, water, telephone and internet services – as well as the rent due for their registered headquarters and secondary offices.
9. These same facilities, i.e. in terms of postponing the payment of utility bills and rent, are also extended to professions involving the provision of services of public interest (e.g. notaries public, lawyers and court bailiffs), as well as to family doctors and dental practices established at locations where, in any form, a maximum of 20 persons carry their activity and where this activity is directly affected by the measures taken by the public authorities with a view to the prevention and control of the COVID-19 pandemic. The criteria to be used to select the beneficiaries of this measure will be provided in a subsequent government decision.
10. Invocation of force majeure in the case of ongoing contracts for small and medium-sized enterprises
In the case of ongoing contracts (other than rent and utilities) concluded by small or medium-sized enterprises (as defined by law), force majeure can only be invoked against them subsequent to the attempted renegotiation of a contract to adapt its clauses in light of the state of emergency.
Force majeure, within the meaning of the present emergency ordinance, is presumed to be the unpredictable, absolutely invincible and inevitable circumstances resulting from an action taken by the authorities when applying the measures aimed at preventing and controlling the COVID-19 pandemic and which affected the activity of the small and medium enterprise, as attested by the state of emergency certificate issued by the Ministry of Economy, Energy and Business Environment. The presumption may be overturned by the interested party by any means of evidence. The unpredictable nature shall be assessed by reference to the moment when the affected legal relationship began. The measures taken by the authorities in accordance with the normative act establishing the state of emergency shall not be deemed unpredictable.
11. Postponement of submission deadline for declarations regarding real beneficiaries
The deadline for submitting declarations regarding real beneficiaries, as provided for under Law no. 129/2019 for the prevention and combating of money laundering, is extended by 3 months from the date of cessation of the state of emergency, while the filing of the declaration is suspended for the duration of the state of emergency.
12. Special measures in the event of a temporary interruption of or reduction in employer activity
According to the Labour Code, an employer is entitled to temporarily interrupt or reduce its activity for economic, technological, structural or other related reasons.
A temporary interruption or reduction of activity at the initiative of the employer results in the suspension of individual employment contracts without the approval of employees and without terminating employment relations.
During the current state of emergency, for the duration of the suspension of individual employment contracts at the initiative of the employer in the event of a temporary interruption of activity, the allowances granted to employees are set at 75% of the basic salary for the position in question and will be paid from the state budget for unemployment aid up to a limit of 75% of the average gross national salary (i.e. RON 5,429 for 2020).
The allowance is subject to the calculation of income tax and social security contributions, with the exception of the work insurance contribution (2.25%).
Employers may benefit from the effects of these provisions provided that they fulfil one of the following conditions:
– they interrupt their activity either entirely or in part, based on the decisions issued by the competent public authorities according to law, for the duration of the state of emergency and they are in possession of a state of emergency certificate issued by the Ministry of Economy, Energy and Business Environment
– they reduce their activity due to the effects of the COVID-19 epidemic and do not have the financial capacity to pay all of their employees’ salaries, a circumstance to be justified on the basis of a statement provided by the administrator of the company at his own responsibility stating that, during the month prior to that in which the statement was submitted, collections were at least 25% lower compared with the average level of collections for the period January to February 2020; employers who fall into this category will be able to take advantage of the facilities mentioned above for up to 75% of their employees with active individual employment contracts as of the date when the present Emergency Ordinance enters into force (21 March 2020).
In order to receive reimbursement from the state budget for amounts paid as unemployment allowances, the employer must submit an application to its local unemployment agency, accompanied by justifying documents as per the law. The documents are to be submitted in the current month for the payment of allowances pertaining to the previous month, while the reimbursement from the state budget will take place within 30 days of the submission of the relevant documents.
The aforementioned application and justifying documents may also be submitted to the local unemployment agency via email.
II. Law no. 19/2020
Law no. 19/2020 regarding the granting of days off work to parents in order to allow them to look after their children in the event of a temporary closure of educational establishments came into force on 17 March 2020.
The circumstances under which parents can benefit from days off work include severe weather conditions and other extreme situations as declared by the competent authorities.
These days off will be granted either to only one of the parents or to the sole parent in a single-parent family on the basis of justifying documents. The number of days off granted to parents is established by Government Decision on an individual basis for each of the above situations. During the present state of emergency, the number of paid days off work granted to one of the parents is equal to the number of working days left until the declared state of emergency comes to an end, with the exception of working days that fall during school holidays.
Parents will be able to benefit from these days off work for the entire period for which the authorities decide to keep educational establishments closed, provided the following conditions are cumulatively met:
– they have children of up to 12 years of age, or children with disabilities of up to 18 years of age, enrolled at an educational establishment
– their particular job does not allow for homeworking or teleworking
The definition of parent also includes the sole parent in a single-parent family, the person designated to exercise parental rights over and obligations towards a child, as well as the parent or legal representative of an adult person with disabilities enrolled at an educational establishment.
The provisions of the present Law do not apply if the parent as defined above finds him or herself in one or more of the following situations:
– is on childcare leave
– is on vacation or unpaid leave
– is a personal assistant of one of the children taken into care
– has his/her employment agreement suspended during the temporary interruption of the activity of the employer
– his/her spouse finds him or herself in any of the aforementioned situations
– the other parent does not earn income subject to income tax according to the Fiscal Code.
The same provisions also apply under certain conditions to a parent or legal representative of a child with severe disabilities not enrolled at an educational establishment, as well as to a parent or legal representative who has an adult person with severe disability in care.
These provisions apply to all employees, from both the public and private sector, with the exception of certain sectors (energy, nuclear, sanitary and social assistance centres, telecommunications, radio, public television, public transport, sanitation, and domestic gas, electricity, heat and water supplies), in which case days off work can only be granted with the agreement of the employer.
The amount of the allowance granted for each day off is the equivalent of 75% of the salary paid for one working day, but no more than the daily equivalent of 75% of the average gross salary in Romania (RON 5,429 for 2020). The allowance is subject to income tax and social contributions.
The allowance is to be paid first by the employer and the net amount received by the parent will then be reimbursed to the employer subsequently (for the period during which the authorities decide to close educational establishments only) from the Guarantee Fund of the State Budget. Any use of amounts reimbursed from the state budget for purposes other than the payment of personnel costs is a criminal offence.
In order to obtain the reimbursement of amounts paid in the form of allowances, the employer must submit an application with its local unemployment agency, accompanied by justifying documents, as required by law, within 30 day of the date of payment of the contributions and taxes relating to the allowance.
The required documents for the reimbursement of said amounts may be submitted by email, as well as by any other means of communication, and the amounts in question shall be reimbursed to the employers within 60 calendar days of the date of submission of the documents.
III. TPA helps you fill out the forms
All of the above measures mean that countless forms will have to be filled out. We can help you carry out these tasks using our automation software from UiPath. Just send us an Excel sheet containing your employee data and any other information needed to fill out the forms, including the template for the document in question, and within a very short space of time we will generate all of the forms for all of your employees and send them back, either directly to you or to each of your employees individually.
For more information about this service, please contact us at automatizare@tpa-group.ro.
