Amendments to the Fiscal Procedure Code

(Ordinance 29/31 August 2011 published in the Official Gazette no. 626/2 September 2011)

The current Ordinance enters into force within 15 days from the date it was published in the Official Gazette, with certain exceptions highlighted below.

The current Tax alert provides the main amendments brought to the Fiscal procedure code, including the amendments taken over from the draft ordinance for the amendment of the Fiscal Procedure Code provided in our Tax alert 14/2011.

Advanced tax ruling

The deadline for the issuance of an advanced tax ruling is changed to 3 months (instead of 45 days as it is currently).

The estimation of the taxable base

The Ordinance repeals the provision according to which the tax inspection bodies determine the taxable base and related tax liabilities by using the indirect methods for reconstructing the revenues and expenses in case it is found that the tax evidence of the taxpayer is incorrect, incomplete, fake, missing or in case it is not made available to the tax authorities.

According to the Ordinance, in these cases, the tax authorities may determine the taxable base and related tax liabilities based on reasonable estimation for which methods approved by ANAF in this respect may be used.

Documentary review

The documentary review is introduced in order for the Romanian tax authorities to correctly evaluate the fiscal status of the tax payers.

The tax registration certificate

The deadline for the issuance of the tax registration certificate is changed to 10 days (instead of 15 days as it is currently).

On-line submission of tax returns

The submission date for the tax returns submitted through electronic means is changed to the date of their registration on the e-Romania portal, as per the electronic message sent by the information trading system provided that the content of the returns is validated (instead of the validation date as it is currently).

The interruption and suspension of the prescription period of the right to establish tax liabilities

The Ordinance provides for specific cases when the prescription period is interrupted/suspended.

Deadline for presenting the taxpayer’s point of view

The taxpayer has the right to present, in writing, a point of view regarding the findings of the tax inspection within 3 working days as of the date when the tax inspection ends (i.e. the date when the final discussion with the taxpayer is set or the date when the taxpayer notifies the tax authorities that it gives up this right).

The deadline for the issuance of the tax decision

The tax decision is to be communicated within 30 working days as of the date when the tax inspection ends (instead of 7 days from the finalization of the tax inspection report as it is currently provided).

The settlement of fiscal debts

Starting 1 October 2011 the settlement of fiscal debts will be realised in the following order: main fiscal liabilities by their seniority and then late payment charges, by their seniority.

The chargeability of the tax receivables of the debtors

In case of refund request for excise duties/VAT, the chargeability of the receivables occurs at the date of submission of the refund request within the amount approved for refund (instead of the communication date of the decision regarding the solution, as it is currently provided).

Late payment interest and penalties in case of taxpayers for which the insolvency procedure was initiated
Taxpayers for which the insolvency procedure was initiated, are now required to pay late payment interest and penalties for the tax  liabilities that arose before or after the date the insolvency procedure was initiated.
Forced execution through garnishment
In such situations the amounts required for the payment of excise duties by or on behalf of the authorised warehouse keepers and the amounts required for the payment of the taxes, duties and contributions that condition the maintenance of payment facilities, in addition to the amounts required for the payment of salary rights, cannot be made unavailable in the debtors bank account for debt settlement purposes.

Cancellation of fiscal debts
Starting 1 January 2012 the fiscal debts which are smaller than RON 40 outstanding as at 31 December are cancelled (instead of RON 10 as it is currently provided).
Fines in case of individual income tax returns
Failure to submit within the deadline provided by the legislation of the income tax returns in case of individuals is subject to a fine ranging between RON 50 and RON 500 (instead of RON 10 to RON 100 as it is currently provided).
Fines in case of recapitulative statement
The fine for the failure to submit within the deadline the recapitulative statement is changed from a fine worth 2% of the total amount on intra Community acquisitions/supplies of undeclared goods to a fine ranging between RON 1,000 and RON 5,000. The fine for filing of an incorrect or incomplete recapitulative statement is changed from a fine worth 2% of the unreported differences to a fine ranging between RON 500 and RON 1,500.
The correction of the recapitulative statement within the legal deadline for submission of the following recapitulative statement shall not be sanctioned with fine if it was not previously established by the tax body. Also, no sanction is applied if the correction of the statement subsequent to the legal filling deadline is done due to a fact not attributable to the taxpayer.

The taxpayer fined has the possibility to pay within 48 hours half of the minimum amount of the fine.

Other changes
The Ordinance changes starting from 1 January 2011 the provisions regarding the assistance for the recovery in Romania of the receivables established in another European Union Member State, as well as the assistance regarding the recovery in another European Union Member State of the receivables established in Romania.
Starting 1 January 2012 the contraventions and sanctions applicable to excisable products are moved in the Fiscal Code.

By Venkatesh Srinivasan, Partner – Head of Tax and Legal, Ernst & Young Romania

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