MASSES FOR COMPANIES IN THE CONTEXT OF COVID 19

Measures taken by the Government for companies

The Ministry of Finance announced a support program for companies in Romania affected by the spread of coronavirus, while many have suspended their activity.

These measures are contained in two emergency ordinances, O.U.G. 29 and O.U.G. 30, published in Official Gazette No. 230, respectively Official Gazette No. 231, both dated 21 March 2020, which, in addition to measures relating to technical unemployment during the state of emergency and those relating to days off that employees can take to supervise children as long as the courses are suspended , establish other measures of an economic and fiscal nature.

These are the guarantees of loans, the subsidisation of interest for these financings, facilities for companies experiencing financial difficulties, the extension of the deadlines for the submission of requests for restructuring of budgetary obligations and the deadlines for payment of local taxes due by the population.

1. GARANTED CREDITS FOR SMEs

The implementation of a multiannual programme to support SMEs to mitigate the effects of the spread of COVID-19 by guaranteeing some loans and subsidising interest for these financings is envisaged.

Thus, the Ministry of Finance will guarantee up to 80% of the amount of funding granted to small and medium-sized enterprises. The maximum amount of credit spending in the last two fiscal years may not exceed the average of the expenditure on working capital of the last two fiscal years, up to a limit of 5 million lei. For investment loans, the maximum amount of financing is 10 million lei, according to a press release from the MFP.

The maximum cumulative amount of State-guaranteed funding that can be granted to a beneficiary under this facility is 10 million lei.

For micro or small enterprises, the State will grant guarantees for loans/credit lines for the financing of working capital, excluding interest, commissions and bank charges related to the State-guaranteed loan up to 90%. The maximum amount of funding will be 500,000 lei for micro-enterprises and 1 million lei for small enterprises.

The maximum amount of each financing granted to a beneficiary may not exceed the average of the expenditure on working capital of the last two fiscal years.

The Ministry of Finance will also subsidise 100% of the interest on loans to be guaranteed for both micro-enterprises and SMEs. Interest will be subsidised from the time of granting the loan until 31 March 2021.

The grant could be extended until 2022 if Romania has a lower economic growth forecast than in 2020.

Outstanding tax liabilities and other budgetary claims will be paid out of the credit/line of credit for working capital granted under the programme.

The period of guarantee of loans/credit lines for working capital will be 36 months with the possibility of extension by 36 months. The 120-month period was maintained for investment loans.

The Ministry of Finance will also cover from the budget the administration fee to cover the costs of granting and monitoring the guarantees granted by the National Guarantee Fund.

2. SUSPENDATION OF SILITARY EXECUTIONS

The Government has also decided to suspend or not to commence enforcement measures by way of attachment of natural persons, with the exception of enforcements which apply to the recovery of budgetary claims established by judgments in criminal matters. Measures to suspend enforcement by way of a right to traceable amounts representing income and cash availability shall be applied, by the effect of the law, by credit institutions or third parties, without further formalities on the part of the tax authorities.

Furthermore, during the period of the state of emergency, for tax obligations due from the date of entry into force of the emergency order and unpaid until the end of the measures provided for by the state of emergency, no interest and late payment penalties are due under the Code of Fiscal Procedure. This facility will be maintained for a further 30 days after the end of the state of emergency.

In this way, taxpayers are eligible to participate, for example, in public procurement procedures carried out during this period or not to have various authorisations cancelled.

It was also decided to extend the deadline for submitting the restructuring intention until 31 July 2020 and to extend the deadline for submitting the restructuring application until 30 October 2020

Taxpayers applying the system of declaration and payment of annual corporation tax, with advance payments made quarterly, may make quarterly advance payments for 2020 at the level of the amount resulting from the calculation of the current quarterly corporation tax. The calculation method shall be retained for all quarters of fiscal year 2020.

Similarly, for those who have opted for a financial year other than the calendar year, it applies to advance payments due for the remaining quarters of the amended year ending in 2020, as well as to the calculation of those relating to the quarters of the amended fiscal year beginning in 2020 and being included in the calendar year 2020, the communiqué further states. Therefore, the tax burden for these taxpayers is reduced in view of the decrease in income.

3. CERTIFICATE FOR THE PAYMENT OF UTILITIES

Also, during the state of emergency, small and medium-sized enterprises holding the emergency certificate issued by the Ministry of Economy, Energy and Business Environment benefit from the deferral of payment for utilities – electricity, natural gas, water, telephone and internet services, as well as the deferral of payment of rent for the building intended for head office and secondary offices.

By way of derogation from other legal provisions, force majeure against them, other than those previously concluded by small or medium-sized enterprises holding the emergency certificate issued by the Ministry of Economy, Energy and Business Environment, may be invoked only after the test, proven by documents communicated between the parties by any means, including electronic means. , to renegotiate the contract, to adapt their terms with taking into account the exceptional conditions arising from the state of emergency.

• Aspects of the state of emergency certificate

Romanian firms will be able to apply online for emergency certificates (SUCs) to be able to obtain state aid for companies affected by the economic situation generated by the COVID-19 coronavirus crisis in Romania.

The Emergency Certificate (CSU) will be issued free of charge to firms affected by the COVID-19 coronavirus situation in order to receive state support.

Thus, the Ministry of Economy, Energy and Business Environment grants, upon request, to applicants, economic operators, whose activity is affected in the context of the SARS-CoV-2 pandemic,
emergency certificates.

The order for the granting of emergency certificates to economic operators provides that such certificates shall be issued in two forms:

1. TIP 1 (ALBASTRU) – issued in the form set out in Annex I to Regulation (EC) No 1493/1999. 1 of the order, for applicants requesting its grant on the basis of the declaration of liability issued in the form set out in Annex No.3, resulting in the total or partial interruption of the activity, as a result of decisions issued by the competent public authorities, in accordance with the law during the period of the state of emergency decreed;
2. TIP 2 (GALBEN) – issued in the form set out in Annex I to Regulation (EC) No 1493/1999. In the case of applicants applying for it on the basis of the declaration of liability issued in the form set out in Annex I to Regulation (EC) No 1493/1999, the Commission shall, in accordance with the order of the first paragraph of the second paragraph of the order, take the place of the application for grant of the declaration of liability issued in the form set out in In Article 3, the amount of the revenue decrease in the amount of the revenue shall be recorded in March 2020 by a minimum of 25 % in relation to the average of the receipts for the period January to February 2020.

An applicant may apply for the issue of a single type of emergency certificate. The application for the issue of the CSU shall be submitted by the applicant, exclusively electronically, through the
http://prevenire.gov.ro/, and the issue of certificates will be done automatically, electronically, after the system validates the request.

To obtain the TIP 1 emergency certificate (ALBASTRU)/TIP 2 (GALBEN), the applicant shall upload the following information and documents to the platform:

1. identification data;
2. the declaration on his own responsibility by the legal representative, certifying that all the information and documents underlying the application for the certificate are in conformity with reality and comply with the legislation in force in relation to the type of certificate applied for, in accordance with the requirements laid down in Article 5 of Regulation (EEC) No 2081/92. In the case of a total or partial closure of the activity or the reduction of receipts in the amount indicated, the amount referred to in Article 2 shall be reduced. In the event that the legal representative does not have the electronic signature, he may sign the handwritten signature, and all documents uploaded to the platform http://prevenire.gov.ro (including the declaration on his own responsibility) shall be signed electronically by the designated representative.

Applicants who are not registered with the Trade Registry Office shall provide the information and documents indicated and documents on the authorisation of the activity. The model of the affidavit is posted by the Ministry of Economy, Energy and Business Environment on the http://prevenire.gov.ro platform.

The Ministry of Economy, Energy and Business Environment issues emergency certificates only during the existence of a state of emergency in Romania. They are valid without signature and stamp, and their verification can be carried out on the platform
http://prevenire.gov.ro/, by series and number.

In the event of any reasonable suspicion of obtaining emergency certificates in breach of the incidental legal provisions or by failing to attest to the applicant's actual and/or factual situation, the bodies empowered to determine the measures shall be referred, in accordance with their powers.

Within 5 days of the approval and publication in the Official Gazette of Romania, Part I, of this order, the Ministry of Economy, Energy and Business Environment will ensure
adaptation and operation of the electronic platform http://prevenire.gov.ro/ for the purpose of complying with this order.

4. DEFERRAL OF THE PUBLICATION OF IMPACTS

The Government has also decided to extend the payment deadline for building tax, land tax and transport tax from 31 March 2020 to 30 June 2020, during which time local councils will continue to receive bonuses.

In these circumstances, the Government has approved that the payment of the rates and interest on loans from privatisation revenue granted by the Ministry of Public Finance to administrative-territorial units may be deferred, at their request, for a period of three months from the date of entry into force of this emergency ordinance. For this period the Ministry of Public Finance does not calculate interest and late interest. The facility is not granted to loans with arrears on payment, the Ministry of Finance says.

In addition to these measures, other provisions were provided, so that in view of the need to continue to purchase the necessary sanitary materials and equipment, the Ministry of Public Finance grants a loan of the proceeds from privatisation of 1.15 billion lei to the National UNIFARM S.A. for a period of 6 months.

From the date of entry into force of the emergency ordinance, during the state of emergency established in Romania, the main authorising officers shall be authorised to make transfers of unused budgetary appropriations and commitment appropriations, as appropriate, in order to ensure the necessary funds for the implementation of measures to combat and prevent the spread of CLIVED infection 19.

The Ministry of Public Finance will approve the quarterly allocation of transfers of budgetary appropriations and commitment appropriations, on the basis of communications sent by the main authorising officers of the transfers within 5 working days from the date of completion.

In view of O.U.G. 30/2020, the most important measures envisaged are technical unemployment and the possibility of parents taking days off while the courses are suspended.

1. TECHNICAL SOMAJ

One of the most important measures provided for in O.U.G. 30/2020 is the possibility for employers to use technical unemployment, which is a temporary interruption of activity, without termination of the employment relationship, mainly for economic, technological, structural or similar reasons.

Thus, during the period of the state of emergency established by Decree No 1/2002 of the European Parliament and of the Council, the Council of 22 December 1996 on the common organisation of As a result of the effects of the COFID virus 19, affected companies which are in a situation of interruption of activity or reduction thereof may unilaterally suspend employment contracts pursuant to Article 19 of Regulation (EEC) No 2081/92. Article 52(2) shall be replaced by the following: Article 1(a) shall be replaced by the c) Labour Code.

In order to benefit from this protection measure, both for employers and employees, employers must fulfil one of the following conditions laid down in Article 5 of Regulation (EEC) No 2081/92. Article XI (1) shall be replaced by (2) of the OUG, namely:

1. the total or partial interruption of the activity on the basis of decisions issued by the competent authorities in accordance with the law, during the state of emergency decreed and the holding of the emergency certificate issued by the Ministry of Economy, Energy and Business Environment referred to in Article 3 (1) (a) and (b) of Regulation (EEC) No 2081/92. Article 12 of Annex I shall be amended as last amended as last amended by Regulation Article 1 of Decree No 1/2002 shall apply mutatis mutandis. 195/2020;
2. reduction of activity as a result of the effects of the COVID-19 epidemic and do not have the financial capacity to pay all salaries to their employees. This will prove to be proven by a declaration on its own responsibility that the employer is experiencing a decrease in the revenue from the month preceding the filing of the declaration, at least 25% compared to the average of the receipts between January and February 2020 and that it does not have the financial capacity to pay all employees. In accordance with Article 5 of Regulation (EEC) No XIV of the Ordinance, by joint order of the Minister of Labour and Social Protection and the Minister of European Funds, a model of the declaration on his own responsibility will be established.

This stage of the framework gives rise to discussions in relation to decisions issued by the competent authorities.

In the first part, the relevant decisions issued by the competent authorities to which the provisions of the OUG relate are, to date, represented by Military Ordinance No. 1/2020 and the recently issued Military Ordinance No. 2/2020.

Military Ordinance No. Article 1/2020 provides for Article 4 of Regulation (EEC) No 2081/92. 1 suspension of the service and consumption of food and alcoholic and non-alcoholic beverages organised by restaurants, hotels, cafes or other public places. At the same time, Article 5 of Regulation (EEC) No 2 2 provides that all cultural, scientific, artistic, religious, sporting, entertainment or gambling, spa treatment and personal care activities carried out in enclosed spaces shall be suspended.

Military Ordinance No. 2/2020 also provides for the suspension of activity in dental practices and the suspension of retail marketing activities, products and services, in shopping centres where several economic operators operate, with the exception of the sale of food, veterinary or pharmaceutical products and cleaning services.

Military Ordinance No. 3/2020 complements Military Ordinance No. 2/2020 and provides for restrictions on the movement of all persons, with some exceptions. In particular, it is addressed to persons over 65 years of age who can only travel between 11 and 13 hours, carrying the declaration on their own responsibility where they must state the reason for the trip.

In this context, it may be considered that only employers whose activity has been suspended in the situations previously mentioned can use the measure of technical unemployment, as is subject to the OUG.

Continuing, the employer, pursuant to Article 5 of Regulation (EEC) No 2081/92, shall be Article 52(2) shall be replaced by the following: Article 1 (1) (b) shall be replaced by the following c) of the Labour Code will issue the decision to suspend the contract which will be communicated to the employees. It should be noted that employers may only benefit from the payment of the allowance for up to 75% of employees who have individual active employment contracts at the date of entry into force of the OUG.

Annexes 1 and 2 are replaced by the following: 1, 2 and 3 of the OUG are represented by the standard requests for payment of the consideration of the allowance, as well as the list of employees on whom a decision to suspend the CIM has been issued, which must be submitted to the County Employment Agency/ Bucharest Municipality, providing in their content and the attachment of the emergency certificate/declaration on their own responsibility whose methodology is not yet approved.

Article. XII of the OUG provides that such documents shall be submitted by e-mail to the agencies within the scope of which they have their registered office, but also that the documents shall be submitted in the current month for the payment of the allowance in the previous month, in accordance with Article 5 of Regulation (EEC) No 2081/92. XIII of the OUG.

In relation to the amount of the allowance, perhaps the most important aspect, the provisions of the OUG rule on the fact that it is set at 75% of the basic salary corresponding to the job occupied and is borne from the unemployment insurance budget, but not more than 75% of the average gross earnings for 2020 provided for by Law No. 6/2020 of the state social insurance budget.

The allowance shall not be exempt from the withholding and payment of income tax, the State social security contribution and the health insurance contribution. The filing of the declaration of payment obligations shall be made in accordance with Article 5 of Regulation (EEC) No 2081/92. 147 of Law No 147 of the European Parliament and of the Council of 17 May 227/2015 on the Tax Code, the payment being made by the employer from the allowances received from the unemployment insurance budget on the 25th including the month following that in which the payment is made. It should also be noted that, in accordance with Article 5 of Regulation (EEC) No 2081/92, the Member States are required to provide for the Article XI (1) shall be replaced by (8) of the OUG, no insurance contribution is due to work.

Last but not least, the OUG also provides that professionals, as regulated by Law No. 287/2009 on the Civil Code which do not have the status of employers and interrupt the activity in whole or in part on the basis of the decisions of the authorities taken in the context of the establishment of the state of emergency shall receive an allowance equal to the gross minimum basic salary per country guaranteed in payment established for 2020, allowances borne from the consolidated general budget.

2. LIBERAL DAYS FOR PARENTS

Law No. 19/2020 on the granting of days off to parents for the supervision of children, in the event of temporary closure of educational establishments, shall be amended and supplemented. Thus, in Article 1, after paragraph 1, the following paragraph shall be added: (3) four new paragraphs concerning the parent or legal representative caring for, supervising and maintaining children or adults classified as disabled shall be introduced.

Another change assumes that the days off are granted at the request of one of the parents, filed with the employer of the person who will supervise the child, accompanied by a declaration on the other parent's own responsibility, showing that he has not applied at his place of work for days off under this law and a copy of the child's birth certificate/certificates/children. These provisions do not apply to the single person in the single parent family.

The granting of days off shall be carried out only with the agreement of the employer for the employees of:

• units of the national energy system;
• from the operational units of the nuclear sectors, of the units with continuous fire;
• social assistance, telecommunications, radio and television units
  transport on the railways;
• units providing public transport and sanitation of localities, as well as
  and the supply of gas, electricity, heat to the population
  and water, food trade, drug production and distribution and
  sanitary equipment, fuel distribution, staff in the
  pharmaceutical units.

For further details please write to your official emails or social media page.

Thank you very much.