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Debt cancellation: How is the fiscal facility applied for obligations established by the tax audit?

The legislation issued last fall regarding the cancellation of delay penalties and 54.2% of the interest (OUG 44/2015) has been, recently, changed during the parliamentary procedure (Law 4/2016). The facility applies to taxpayers with debt outstanding at 30 September 2015. However, it provides that those who were subjects of the fiscal audit, at the moment of the approval of the legislation, can, also, benefit from the fiscal facility.

Because many changes appeared during the legislative process, there are discrepancies regarding the legal terms and the Ministry of Finance issued a draft order to clarify them.

Recall that all individuals and corporate taxpayers who meet legal requirements can benefit from this facility.

Thus, besides the taxpayers with debt outstanding at September 30, according to the procedure, may benefit of the fiscal facility those who have obligations as derived from tax decisions issued and communicated between October 1 – October 21, 2015.

The draft clarifies which obligations established by the tax audit can be cancelled.

Regarding the conditions, the fiscal facility applies for the obligations established by the tax audit if:

• The differences of tax obligations are extinguished, under the provisions of the Fiscal Procedure Code on the terms of payment;
• 45.8% of related interest obligations are extinguished under the provisions of the Fiscal Procedure Code.

The terms of payment according to the Fiscal Procedure Code:

Accessories cancellation request is to be filed within 90 days after the communication of the tax decision.

The provisions of the Fiscal Procedure Code art. 156 Payment terms:

• if the communication date is between 1-15 of the month, the payment deadline is until the 5th of next month, including;
• if the communication date is between 16 to 31 month payment term is till the 20th of the following month inclusive.

The amounts that can be cancelled:

• The main obligations outstanding at September 30, 2015 inclusive (such as VAT, income tax, other taxes and fees outstanding at 30 September 2015, which were paid after this date);
• The main obligations additionally declared by the taxpayer in the rectifying declaration which corrects the main tax obligations with maturities prior to September 30, 2015 including (for example, if you declare additional income tax for the year 2014 and the difference is paid after September 30, 2015 );
• The main obligations with payment terms up to September 30, 2015 inclusive and extinguished until that date (eg accessories calculated for taxes that were fully paid by September 30, 2015 for which the taxpayer also paid the delay penalties and the related interest);
• The main obligations established by a tax audit in progress at the effective date of the ordinance (ie if the tax audit was ongoing on 21 October 2015 and it was completed thereafter by establishing the additional taxes and duties related accessories).