PwC analysis: 2022 could mark the transition of amnesty from a tax measure to a support measure. What benefits it can bring to companies

bani, POCU, Ministerul Investiţiilor şi Proiectelor Europene

PwC analysts believe that 2022 should mark the transition of the amnesty from a tax measure that helped taxpayers pay off pre-pandemic tax debts during the pandemic to one that helps them pay off the main tax debts incurred during the pandemic.

“We are trying to decipher why this happened and, more importantly, to anticipate what prospects this legislative change might bring in the coming year. Ordinance 130/2021 seems to reinforce a trend of the last two years in which the Romanian State, in the context of the financial difficulties generated by the COVID pandemic, still gives a chance to its taxpayers to pay their outstanding main tax debts and benefit from the cancellation of accessory tax obligations”, PwC analysts report.

Although the deadline for the application of the amnesty has been extended until mid-2022, the reference date for main tax liabilities falling within the scope of the amnesty has remained at the 2020 level. More specifically, only interest and tax penalties relating to main tax debts falling due before 31 March 2020 can be canceled through applications submitted by 30 June 2022, PwC analysts believe.

“Under these circumstances, even if it is welcome, of course, as any tax facility in favor of taxpayers, we wonder whether this extension of the deadline is likely to maintain the tax amnesty as an effective and useful tool to help taxpayers and, on the other hand, to stimulate the accumulation of revenue from the state budget through the payment of tax debts from tax inspections and voluntary compliance,” the consultancy company states.

What advantages this extension brings to taxpayers:

On the one hand, this extension is beneficial for taxpayers who have not yet “cleaned up” their tax and accounting records in order to identify possible errors that would generate the risk of additional tax liabilities and, therefore, to be rectified, the resulting main tax liabilities – paid, and the accessory ones – canceled. Such taxpayers will again have an extended deadline until 30 June 2022 to apply for amnesty if they have not made corrections in the last two years.
On the other hand, the scope of tax inspections falling within the scope of the tax amnesty is extended and will include inspections started by 30 June 2022, and not only those in progress or started by 31 January 2022.
“The New Year 2022 – the third and, therefore, the one that should, according to local folklore, be the lucky one – should mark the transition of the amnesty from a tax measure (highly beneficial and used both by taxpayers and for the state budget) that helped taxpayers to pay their pre-pandemic tax debts during the pandemic, to one of helping them to pay the main tax debts arising during the pandemic, especially those of the first pandemic year, which proved to be the most difficult and with the most serious consequences for both the state and the taxpayers”, says Dan Dascălu, a partner in charge of tax litigation at D&B David si Baias, PwC’s correspondent law firm in Romania, and Mihail Boian, partner at D&B David si Baias.

From such a perspective, PwC analysts believe that, in addition to the extension of the filing deadline to 30 June 2022, an advancement of the deadline from 30 March 2020 to 30 March 2021 would be an excellent start and would reinvigorate this instrument that has proven to be vital both for the Romanian State and for its taxpayers in these difficult times.

Sursa: Facebook/ Ministerul Investiţiilor şi Proiectelor Europene

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