GEO no. 138/2024 – tax changes that will enter into force from 01.01.2025 (e-Transport, e-VAT, e-Invoice, accounting changes, etc.)

Cancellation of Accessories and Principal Debts through GEO 107/2024: What Taxpayers Need to Know

Recently, the Romanian Government adopted Emergency Ordinance no. 107/2024, a regulatory act aimed at cancelling ancillary and, under certain conditions, main debts for certain categories of taxpayers. The measure comes as a support for individuals and legal entities affected by financial difficulties and aims to facilitate tax compliance and reduce arrears to the state budget.

What does GEO 107/2024 provide?

GEO 107/2024 offers a unique opportunity for taxpayers to cancel their accessory debts (interest and late fees) and, in some cases, even outstanding principal debts.

1. Cancellation of accessories related to outstanding main budgetary obligations on August 31, 2024.
2. Cancellation of a percentage (25% or 50%) of the main budgetary obligations outstanding on August 31, 2024

Who can benefit from GEO 107/2024?

The ordinance is addressed to both individuals and legal entities that have outstanding debts to the state budget. Through this measure, the tax authorities want to reduce the level of indebtedness and support voluntary compliance of taxpayers.

Main categories of beneficiaries:

• Individuals who have accumulated debts from taxes or contributions owed;
• Legal entities, including SMEs, that have outstanding debts to the state budget;
• Other entities that may demonstrate financial difficulties or have payment arrears.

The main provisions include:

• The accessories related to the main budgetary obligations outstanding on August 31, 2024 inclusive are canceled if several conditions are cumulatively met.

• Debtors, individuals, who register outstanding main budgetary obligations on August 31, 2024 inclusive in an amount of less than 5,000 lei inclusive, may benefit from: a) cancellation of a percentage of 50% of the main budgetary obligations, outstanding on August 31, 2024 inclusive, in the event that they are settled in a percentage of 50% by the date of submission of the cancellation request, but no later than November 25, 2024; b) cancellation of interests, penalties and all accessories related to the main budgetary obligations, outstanding on August 31, 2024 inclusive, if the condition in letter a) is met.

• Debtors, individuals, who register outstanding main budgetary obligations on August 31, 2024 inclusive in an amount greater than 5,000 lei, may benefit from: a) cancellation of a percentage of 25% of the main budgetary obligations, outstanding on August 31, 2024 inclusive, in the event that they are settled in a percentage of 75% by the date of submission of the cancellation request, but no later than November 25, 2024; b) cancellation of interests, penalties and all accessories related to the main budgetary obligations, outstanding on August 31, 2024 inclusive, if the condition in letter a) is met.

• Taxpayers paying profit tax, as well as taxpayers paying microenterprise income tax, benefit from a 3% bonus on the annual profit tax and microenterprise income tax, for the fiscal year 2024.

How is the measure applied and what are the necessary steps?

To benefit from the cancellation of accessories and/or main debts, taxpayers must follow a series of steps, including filing an application with the competent tax authority, paying the main debts (where applicable) and complying with the deadlines imposed by the ordinance. It is essential that taxpayers are informed of the deadlines and consult a tax advisor to ensure compliance.

Material prepared by the Regional Directorate of Public Finance Ploiești – AJFP Dâmbovița

Impact on taxpayers and the economy

Through this measure, the government is trying to reduce the financial pressure on taxpayers and increase the level of voluntary compliance, thus contributing to the reduction of tax arrears. In the long term, it is anticipated that this measure will improve the financial stability of taxpayers and facilitate receipts to the state budget.

Interested taxpayers are advised to consult GEO 107/2024 and contact a tax expert to understand exactly what steps they need to follow to benefit from the cancellations provided for in this ordinance.

Material prepared by the Regional Directorate of Public Finance Ploiești – AJFP Dâmbovița