Tax Flash No. 9/2015
Law 207/2015 approving the Fiscal Procedure Code was published in Official Gazette 547/2015
The New Fiscal Procedure Code, approved by Law 207/2015, shall enter into force on January 1st, 2016, date at which inter alia the Emergency Ordinance 92/2003 regarding the Fiscal Procedure Code (‘EO 92/2003’), the Government Decision 1,050/2004 approving the Norms for the application of EO 92/2003, as well as certain normative acts that have been incorporated under the New Fiscal Procedure Code shall be repealed.
The provisions of the New Fiscal Procedure Code shall be applicable only in relation to administrative procedures initiated after January 1st, 2016.
Among the most important amendments brought by the New Fiscal Procedure Code, structured as per the main subjects, we note the following:
New terms are introduced or major changes are brought to existing ones, such as:
– the definition of tax receivable is limited to state budget incomes that have a fiscal nature;
– tax authority is defined by making a distinction between the central tax authority (represented by NAFA, through specialized structures and subordinated units) and the local tax authority (represented by the specialized structures within the local authorities);
– the term of tax liability is limited to the taxpayer’s liability to pay the amounts due towards the consolidated state budget.
It is regulated that the provisions of the New Fiscal Procedure Code shall be complemented by the Civil Code and the Civil Procedure Code provisions, in so far as such latter provisions do not contradict the principles of tax law.
When assessing the fiscal state of facts, the tax authority will have to take into account the following:
– the written opinion issued by the competent tax authority to the respective taxpayer within the activity of assistance and guidance of taxpayers; as well as
– the resolution taken by the tax authority by means of a tax administrative document, or by the court of justice, in a final decision previously adopted, for similar circumstances and for the same taxpayer.
The following principles are provided for:
– the principle of reasonability and fairness is introduced, in the sense that the tax authority exercises its judgment right ensuring a just proportion between the intended purpose and the means used for achieving it;
– the principle of lawfulness in the administration of taxes is introduced, in the sense that the tax authority has to ensure the compliance with the legal provisions regarding the exercise of the rights and fulfillment of the obligations of the taxpayer;
– the principle of good faith is developed, in the sense that the taxpayer/payer should fulfill its obligations and exercise its rights according to the purpose based on which such were recognized by the law and the tax authority has the obligation to observe the rights of the taxpayer.
Rules regarding the interpretation of tax provisions in relation to which the intention of the lawmaker is unclear, are introduced. In case after applying the interpretation rules, the provisions of the tax legislation remain unclear, such shall be interpreted in the favor of the taxpayer.
The decision for triggering the joint liability issued without the preliminary hearing of the person to whom the liability was triggered is sanctioned with nullity.
General procedural provisions:
The possibility that the local tax authority to classify, based on certain selection criteria, the taxpayers as large, or as the case may be, midsize taxpayers is introduced.
The advance pricing agreement can also be requested for the computation of the tax result attributable to a permanent establishment.
The fee for the issuance of the advance individual tax ruling is increased from EUR 1,000 for all taxpayers to EUR 5,000 for large taxpayers, respectively to EUR 3,000 for the other categories of taxpayers.
The obligations of credit institutions to provide information to the tax authorities are extended.
The general term of 45 days for solving the requests submitted to the tax authority by the taxpayer is extended, depending on the source from whom the relevant supplementary proofs for the resolution of the request are asked for, with the period between the date of requesting the proof and the date of receipt. The maximum extension period is of 6 months if proofs are requested from tax authorities from other states.
If the resolution of the request submitted by the taxpayer to the tax authority entails the carrying out of a tax audit, based on the risk analysis, the resolution term is of maximum 90 days from the request registration and does not include the periods of suspension of the tax audit.
The possibility to submit the declaration of additional specifications also in case errors are detected in the tax registration declaration is included.
The following new situations that generate the declaration of the inactivity of the taxpayer/payer legal person or entity without legal personality are introduced:
– temporary inactivity registered with the Trade Registry;
– expiry of the company’s activity period;
– inexistence of the statutory bodies at the company’s level;
– expiry of the duration of entitlement over the space destined for the registered office.
Establishment of tax receivables:
The central tax authority relinquishes its right to establish a tax receivable and does not issue a tax decision in case the principal tax receivable/total of principal tax receivables is below RON 20. In case of tax receivables administered by the local tax authority, the threshold of the tax receivables that can be relinquished is set by the relevant authorities without exceeding RON 20.
The statute of limitation on the right of the tax authority to determine tax receivables starts from 1 July of the year following the one for which the tax liability is due, unless otherwise stipulated by the law. Its suspension for the period between the starting date of the tax audit/verification of the personal tax status and the issuance date of the corresponding tax decision is conditional upon the observance of the legal duration for carrying out the said tax audits.
The exhaustive verification is introduced into the category of audit methods which can be used for carrying out the tax inspection.
The period subject to tax audit starts from the end of the previously audited period (within the statute of limitation) for all taxpayers (not only for large taxpayers).
The taxpayer/payer should be notified in case the competence for carrying out the tax audit is delegated.
The maximum duration of carrying out a tax audit is amended:
– 180 days for large taxpayers;
– 90 days for midsize taxpayers;
– 45 days for the other taxpayers.
The tax audit ceases, without the issuance of the tax audit report and of the tax decision/decision for maintaining of the tax base, if the tax inspection is not completed within twice the maximum period mentioned above. In this case, the tax inspection can be resumed only once for the same period and tax liabilities, within the statute of limitation period.
The suspension duration in respect of the tax audit is of maximum 6 months in case the suspension decision is taken by the tax authority, respectively of maximum 3 months in case the suspension is justifiably requested by the taxpayer/payer.
It is regulated the procedure for redoing the tax audit, which is different from the reverification procedure, in case a decision for the resolution of the appeal annulling totally or partially the challenged tax administrative document is issued.
The taxpayer can relinquish the final discussion by notification to the tax audit body.
The term within which the taxpayer has the right to present, in writing, its point of view regarding the tax audit findings is extended to maximum 7 working days for large taxpayers, respectively to maximum 5 working days for the other taxpayers; this term can be extended for justified reasons.
The taxpayer has the possibility to request the issuance of temporary tax decisions during the carrying out of the tax inspection.
Rules regarding the carrying out of the un-notified audit, which is different from the antifraud audit, are introduced, such having a maximum duration of 30 days.
Collection of tax receivables:
The term of issuance by the central tax authority of the certificate attesting the tax liabilities is reduced to 3 working days from the request submission date, with certain exceptions.
The correction of errors from the payment documents compiled by debtors is regulated in case the payment was made in a budget different from the one whose income is represented by the tax receivable paid.
In case of tax receivables administered by the local tax authority, the amounts paid settle with priority the fines mentioned in enforceable documents, as per their age, even if the debtor indicates another type of tax obligation (except for the payment of taxes for certain supplies of services by public institutions or authorities).
The possibility of offsetting the negative VAT requested for reimbursement by the VAT group’s representative against the tax liabilities of the group members is introduced.
In case payable VAT is settled against negative VAT, the settlement date for the payable VAT is the date stipulated by the law for submitting the return in which the settlement was performed.
The tax liabilities set by the central tax authority further to the reconsideration of a transaction are settled against the tax liabilities declared/paid by the taxpayer/payer corresponding to the respective transaction. The amounts paid in the account of the tax liabilities declared/paid by the taxpayer/payer represent advance payments in the account of the tax liabilities established further to the reconsideration.
For the differences of tax liabilities established by rectifying tax statements or tax decisions, no ancillary tax liabilities are due for the amount paid as principal tax liability, if, prior to the assessment of the tax liabilities, the debtor made a payment which did not settle other liabilities. This provision also applies in case the debtor paid the tax obligation and the tax statement was submitted after such payment.
The levels of ancillary tax liabilities are reduced as follows:
– to 0.02% per day of delay for the late payment interest;
– to 0.01% per day of delay for the late payment penalty;
– to 1% of the outstanding principal tax liabilities due to local budgets, for every month or month fraction of delay.
The non-declaration penalty is introduced for tax receivables arising after January 1st, 2016, as follows:
– it is set at 0.08% per day of delay and is due for the principal tax liabilities which were not declared or were erroneously declared by the taxpayer/payer and are established by the tax audit body through tax decisions;
– such could not exceed the amount of the principal tax receivable to which it applies, except for the situation when the principal tax liabilities were set further to the carrying out of tax evasion acts (case when it is increased by 100%);
– it can be reduced at the taxpayer/payer’s request with 75%, under certain conditions;
– the non-declaration penalty does not exclude the payment obligation in respect of the interests stipulated by the Fiscal Procedure Code and it is not established if it is lower than RON 50.
Settlement of appeals:
The term for submitting the appeal is extended to 45 days from the communication date of the tax administrative document.
The possibility of requesting the oral presentation of the appeal by the appellant is introduced.
In case the competent administrative litigation court admits the request of the taxpayer/payer for suspending the execution of the tax administrative document, no late payment penalties are due during the suspension period; nevertheless, in case of tax receivables administered by the local tax body, late payment charges of 0.5% per month or month fraction are due during the suspension period.
The appellant can revert to the competent administrative litigation court in case the appeal was not finalized within 6 months from its submission date; this term does not include the suspension period in respect of the appeal resolution procedure.