Legal & Tax Alerts

New easements regarding rent payment during the emergency state

On May 21, 2020, Law no. 62/2020 on the application of rent payment facilities for the emergency period (“Law no. 62/2020”) was published in the Official Gazette[1]. The normative act will enter into force on May 24. It provides for a series of facilities regarding rents and tax on rental income applicable during the state of emergency and beyond.

Law no. 62/2020 provides that for the entire emergency period, as well as for the month following the month in which the state of emergency ceased, a series of categories of tenants may defer, upon request, without payment of interest and penalties, payment of rent for the use of real estate registered as head or secondary offices or homes.

This measure may benefit economic operators, practitioners of the liberal professions, private legal entities, whose activity has been interrupted or whose income or revenues decreased by at least 15% in March 2020 compared to the average of the last calendar year, during the state of emergency, as well as individuals who were directly or indirectly economically affected during the state of emergency.

The payment of the deferred rents can be made by the competent territorial fiscal body directly to the lessor’s account, provided that the monthly rent complies cumulatively with the following conditions

» to be less than or equal to the rent from February 2020;

» to have a maximum value of RON 10,000 for economic operators for each location, respectively a maximum value of RON 2,000 for individuals for a single location.

In order to obtain the payment of rent by the competent territorial fiscal body, the lessee must submit a request accompanied by:

» the lease agreement concluded between the lessor and lessee;

» the addendum to the lease agreement, by means of which the parties agree to defer the rent payment and specify the duration of the deferral period, the amount of rent-related to this period, the bank account of the lessor, the execution date and signatures of both parties;

» any kind of document of the lessee that proves the impossibility of paying the rent within the period specified in the addendum concluded between the lessor and the lessee.

The lessees who benefit from this deferral from rent payment will be obliged to pay the deferred monthly rents to the competent territorial fiscal body after the period for which the payment was deferred, in equal instalments, until December 31, 2020.

Additionally, a series of fiscal facilities were adopted, by derogation from the current provisions of Law no. 227/2015 regarding the Fiscal Code:

» the taxpayers who have reduced the value of the use of the real estate as per the parties’ agreement by at least 30% compared to February 2020, will benefit from the income tax exemption for the income from the assignment of use of this property, for the period for which the value decrease for the use of real estate was negotiated, but not more than December 31, 2020;

» if the value of the use of the real estate as per the parties’ agreement has been reduced by at least 30% compared to February 2020, this value will not be included in the annual computation threshold of at least 12 gross minimum wages set forth by the legal provisions as the basis for calculating the social health insurance contribution for 2020;

» taxpayers who have reduced the value of the use of the real estate as per the parties’ agreement by at least 20% to February 2020 will pay profit tax or income tax for micro-enterprises, only for 80% of the income from the assignment of use of this property, for the period for which the value decrease for the use of real estate was negotiated, but not more than December 31, 2020.

[1] Official Gazette of Romania, Part I, no. 425 dated 21.05.2020.

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