Amendments to the rules for payment in instalments schemes

In April, the authorities introduced the following changes and additions to the Fiscal Procedure Code regarding the application of payment in instalments schemes for tax liabilities:

1. The classic form of payment in instalments – according to which the taxpayers could access it are amended, as follows:

• Taxpayers who do not own assets with a view to providing securities to cover the payment of instalments, are unable to provide such securities or the amount of the securities provided is less than 50% of the outstanding tax liability subject to payment relief will only be eligible for payment in instalments schemes for a maximum period of 6 months.

• If the amount of security that can be provided by the taxpayer exceeds 50% of the amount of the outstanding tax liability subject to payment relief (but does not cover the amounts deferred, the interest due for the period of deferment plus up to 16% of the amounts deferred), then the debtor may benefit from a 5-year deferment period.

• In the above situations, the late payment penalties contained in the tax certificate are not deferred and are included in the instalments.

• In addition, the ceilings on outstanding tax liabilities eligible for payment in instalments below which no security is required are eliminated.

• Excise duties are removed from the list of tax liabilities for which this type of payment in instalments can be applied. As a result, within 30 days of communication of the deferral decision, taxpayers must pay any excise tax liabilities outstanding at that time (as these do not fall within the purview of the deferral).

• The number of requests for a modification/maintenance of a payment in instalments scheme (whose validity has expired) that can be submitted by taxpayers is reduced from two to one for each calendar year.

• By way of exception, where the debtor obtains a stay of execution of the fiscal administrative act for claims covered by the payment in instalments scheme during the period of validity of the scheme, or the fiscal administrative act is abolished or annulled during the period of validity of the payment in instalments scheme, the debtor may apply for an amendment of the payment in instalments decision whenever required.

1. Simplified instalments

• Tax obligations in the form of excise duties, taxes, compulsory social security contributions withheld at source and taxes relating to gambling activities are removed from the purview of the simplified instalments scheme.

• The new provisions add to the conditions for the application of the simplified instalments scheme. As a result of the reduction in tax obligations that fall within the purview of the instalment payment scheme,

the debtor must pay: (i) within 30 days of communication of the payment in instalments decision, all excise duties and taxes relating to gambling activities not paid up to that date; and (ii) within a maximum of 60 days of communication of the payment in instalments decision, all taxes and compulsory tax contributions outstanding at that time.

• The debtor may request to maintain the payment in instalments scheme whose validity has expired no more than once. This amendment applies to applications submitted after 6 April 2023.

• The interest charged for each day of delay on tax liabilities payed in instalments doubles to 0.2% (including for instalments currently in progress).

Source: Government Emergency Ordinance no. 20/2023 amending and supplementing Law no. 207/2015 on the Tax Procedure Code and amending Government Ordinance no. 6/2019 on the introduction of various tax incentives.