The postponement of the fiscal obligations payment without the establishment of the accessories up to 30 days from the cessation of the emergency state is considered the most useful measure taken by the government in the context of the COVID-19 pandemic by 90% of the responding companies in PwC Romania’s HR Barometer study.
“The business environment is facing an unpredictable, unprecedented climate, which leads to an unexpected decrease in revenues in the short term. Many companies find it difficult to provide liquidity and need government support. Deferred payment of taxes represents an oxygen mouthpiece under these conditions. Further measures will be needed to mitigate the negative impact of measures to combat the negative effects of the COVID-19 pandemic. However, expectations must remain realistic, relative to budgetary possibilities. I say this because in recent years, although we have had economic growth, a pro-cyclical fiscal policy has been applied, which has led to the narrowing of fiscal space, limiting the government’s means of intervention in a crisis situation, such as the one we are going through now”, said Ionuț Simion (photo), Country Managing Partner PwC Romania.
Regarding the impact of the measures taken by the authorities in COVID-19 pandemic context, the vast majority of the respondents appreciated other measures taken in the fiscal area as follows:
- 88% consider welcome the postponement of the payment term for the tax on buildings, land and the tax on means of conveyance (including the deadline for granting the discount) from 31 March 2020 to 30 June 2020.
- 70% think it is useful the measure that establishes the quarterly advance payments at the level resulting from the calculation of the current quarterly profit tax.
“In the context of the current crisis, measures such as the use of the Virtual Private Space for documents issuance, the filing of online statements and the electronic archiving are necessary in the relation of authorities – taxpayers. Recently, the government adopted an emergency ordinance, not yet published, which obliges public authorities and institutions to accept documents signed by electronic signature, sent online by companies and individuals. We also know that this year the tax administration is preparing several digitization projects to be implemented. We hope that this whole process of digitization of public services will be accelerated in the next period because it is for the benefit of the authorities and the taxpayers both in terms of simplifying the interaction, as well as reducing the costs ”, said Daniel Anghel, Partner, Tax and Legal Services Leader at PwC Romania.
Regarding the measures proposed publicly by the business environment, the companies responded as follows:
- 70% say it would be useful to implement electronic billing and archiving.
- 64% consider the full tax deductibility for donations made for the eradication and combating Covid-19 as beneficial.
- 58% believe it’s needed the registration, residence, registration and any other certificates through the Virtual Private Space.
- 52% would like the full deductibility for the provisions for non-payment risk created as a result of the pandemic effects, as well as the adjustment of the VAT tax base for receivables not received during the period when the state of emergency is applicable and for 60 days after.
- 34% think it would be useful to implement the VAT refund with subsequent control for all taxpayers, regardless of the amount requested for reimbursement.
“The measures taken so far to support the companies concern the short-term identified problems, having applicability during the state of emergency and another 30 days after its conclusion. It is obvious that other fiscal measures need to be analyzed as soon as possible to help the business environment in the longer term and, for this purpose, we can look at what other states in Europe are doing and take good practices from their experience. For example, the measures to optimize the cash flow should be the first ones taken into account, such as offsetting the amounts paid over or to be reimbursed with current tax obligations or reimbursing them quickly”, said Andreea Mitiriță, PwC Tax Services Partner Romania.
The taxation measures taken by other states were collected and centralized by the companies from the PwC network. Of these, some are in discussions in Romania.
- Accelerated VAT refund (Belgium, Luxembourg and Latvia)
- Extension of the deadline for filing tax returns / payment of tax obligations (Italy, Czech Republic, Belgium, Austria, Malta, France, Luxembourg)
- Tax incentives for donations made by taxpayers (Greece, Italy, Poland, Ukraine)
- Suspension of tax control / tax control actions online (Austria, Italy, France, Poland)
- Taxpayers can deduct the loss recorded in 2020 from the income obtained in 2019 (Poland) – corporate income tax and personal income tax.