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Homeowners to receive compensation from ANAF for reduced rents due to Covid 19

Landlords will be able to receive money from ANAF and will be able to benefit from tax exemptions for reduced rents

The draft law adopted by the Chamber of Deputies in the meeting of 29.04.2020 provides for the possibility of requesting the postponement of rents, but also certain exemptions from paying taxes.

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Postponement of rent

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Some categories of people will be able to request the postponement of the rent payment, for the period of the state of emergency and one month after its termination.

What does rent deferral mean?

It means that this amount of money will be paid by the tenants, but not now and not to the landlord.

Thus, unlike the suspension (as provided in the original text of the bill), the postponement of the rent payment implies that it is due, but its payment will be made later, not now.

Moreover, the subsequent payment will be made to ANAF (romanian IRS), not to the owner, in equal installments, in the manner established after the publication of the law in the Official Gazette.

What does the draft law adopted by the Chamber of Deputies in the meeting of 29.04.2020 stipulate?

“Tenants: economic operators, practitioners of the liberal professions, legal entities under private law, whose activity has been interrupted or whose income or revenues have decreased by at least 15% in March 2020 compared to the average of the last calendar year in the period of application of the state of emergency, natural persons economically affected directly or indirectly during the period of application of the state of emergency, may postpone on request, without payment of interest and penalties, the payment of rent for the use of real estate registered as offices, workplaces or dwellings.

“Tenants who benefit from the deferral of rent are obliged to pay the monthly rents, the payment of which was deferred by additional act between the landlord and tenant, to the competent territorial tax authority, which paid these rents to the landlord, in equal installments, after the period in which the payment was postponed until December 31, 2020, otherwise they will be enforced by ANAF. ”

At the same time, the tenants must submit a series of supporting documents in order to benefit from the facilities
The tenant’s application will be accompanied by the following:

a) the lease contract between the lessor and the lessee.

b) additional document between the lessor and the lessee to the lease contract, which will contain the following:

– the agreement of the parties to defer the payment of the rent, the duration of the period of deferment of the payment of the rent, the amount related to this period of deferral.

– identification data of the lessor and the lessee.

– the data of the bank account of the lessor in which the payment is to be made by the competent territorial fiscal body.

– date of signing and signatures of both parties.

c) any kind of deed of the lessee that proves the impossibility of paying the rent during the period specified in the additional deed between the lessor and the lessee.

Basically, the tenants will have a moment of respite for a short period of time, will not pay interest and penalties and will be able to pay the arrears in installments.

On the other hand, the rents will eventually have to be paid and you will not have debts to the landlord, but to ANAF, and if you do not pay, you will be able to be directly enforced directly by the tax authorities.

The owners will be able to receive the rents owed by the tenants from ANAF
Regarding the owners, the law states that “Lenders who cumulatively meet the following conditions may apply for payment to the competent territorial tax operator

a) the monthly rent specified in the additional act between the landlord and the tenant is lower, at most equal to the rent from February 2020.

b) the maximum value of the monthly rent from the additional act is of maximum 10,000 lei for the economic operators for each location and maximum 2,000 lei for natural persons for a single location.

Tax exemption due

Landlords (landlords) who will be able to be exempted from paying taxes related to the period of rent reduction.

The owners (lessors) who reduce during the period 2020 the value of the use of the real estate, established in money and / or in kind, according to the contract concluded between the parties, by at least 30% compared to the value of the use of the real estate for February 2020, will be exempted from rental / sublease or usufruct income tax. This facility will be valid until the end of 2020 and applies only for the period for which the rent reduction was applied.

Individuals who in 2019 made income from the transfer of the use of goods from a number of 5 leases, and, starting with 2020, qualified these incomes in the category of income from independent activities will also benefit from the exemption.

In the case of taxpayers who pay corporate income tax and those who owe income tax to micro-enterprises, income from the transfer of the use of real estate obtained under lease / sublease or usufruct contracts is taxable only in proportion of 80% of their value, subject to the reduction of at least 20% of the lease, compared to February.

The facilities provided shall apply for the entire period of the state of emergency, as well as for the month following the month in which the state of emergency ceased.

The law was sent to the President of Romania for promulgation, and will be published later in the Official Gazette.

Finally, the norms of effective implementation will be elaborated within 15 days from the publication of the law in the Official Gazette of Romania.

Gabriel Olteanu

lemonaid – property management solutions.

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