The Romanian Ministry of Finance will introduce a fiscal identification number! What other measures will it implement to combat tax evasion?

The Ministry of Finance announces a series of changes to the fiscal procedure code and introduces a digital identification number (a fiscal CNP), as an alternative to the classic CNP.

This change will be implemented despite Prime Minister Marcel Ciolacu previously stating that no fiscal changes, such as the fiscal CNP, would be introduced without prior debate. Another measure targets the reduction of thresholds for collections and payments for those with bank account garnishments. Additionally, simplified payment rescheduling will be available for fiscal obligations with withholding at the source. Furthermore, the ministry is establishing easier electronic communication channels with the legal or designated representatives of the business community.

“The proposal is for individuals to use a digital identification number as an alternative to the CNP, to ensure the proper functioning of digital systems that require the use of individuals’ CNPs. Thus, an individual may choose to prove their identity in dealings with the tax authority by using the digital identification number instead of the CNP,” stated the Ministry of Finance as one of its proposals, among others.

Prime Minister Marcel Ciolacu announced on Thursday that “no fiscal change can enter the Government from now on without prior public consultation and an agreement with the private sector and civil society,” following new controversies related to the implementation of e-Invoice.

“Neither Mr. Boloș nor any other ministers can bring such projects, like the fiscal CNP, for example, until they go through this process. I believe this is the right approach, and it is what Romanians expect,” Marcel Ciolacu said at the start of the Government meeting on Thursday.

The list of proposed changes by the Ministry of Finance:

The Ministry of Finance proposes amending the Fiscal Procedure Code to enhance the operational capacity of ANAF in preventing and combating non-compliance.

The Ministry of Finance is putting up for public debate the normative act that introduces a series of amendments and additions to Law no. 207/2015 regarding the Fiscal Procedure Code, to adapt fiscal legislation in such a way that the collection and payment compliance rates increase. It is worth mentioning that the amendments to the Fiscal Procedure Code were the subject of extensive discussions on Monday, July 29, 2024, between Finance Minister Marcel Boloș and representatives of the business community, including the Romanian Banking Association, the Employers’ Association of Accountants in Romania, the Chamber of Tax Consultants, CECCAR, ACHAM, the Council of Romanian Investors, and the Foreign Investors Council. At the end of the meeting, the two parties agreed on a 20-day deadline for the business community to submit proposals for any further changes to the draft normative act.

“The synergistic effect of all the measures we are implementing to control tax evasion will be visible in the budget execution account. From our experience in combating tax evasion and considering the mechanisms we are implementing, we have found that the issue must be managed from multiple directions to monitor and return to normality. Our digitalization projects are converging towards the general objective of reducing gaps in various categories of taxes and duties. All countries that have applied such digitalization projects have achieved significant results. All these measures will help us better capitalize on budget claims, reduce the tax burden on taxpayers as much as possible, and thus generate substantial funding to ensure major public services,” emphasized Marcel Boloș.

The main changes include:

Granting simplified payment rescheduling, including for tax obligations with withholding at the source, under certain conditions

It is proposed that the category of tax obligations eligible for simplified payment rescheduling include those with withholding at the source. In fact, through Government Emergency Ordinance no. 20/2023, the possibility of granting simplified payment rescheduling for tax obligations with withholding at the source was removed. This measure affected the business community, which found itself in temporary financial difficulty, so the draft normative act proposes that tax obligations with withholding at the source can be included in the simplified payment rescheduling, provided that at least 15% of the amount of budgetary obligations included in the tax certificate is paid. This measure aims to achieve the most advantageous results, considering both the legitimate and immediate interest of the creditor and the rights and obligations of the debtor.

The possibility of paying tax obligations into budget revenue accounts corresponding to each type of tax obligation

By amending the legal provisions regarding the payment of tax obligations, it is proposed to offer taxpayers/payers the possibility to choose the method of making transfers to pay obligations, either into a single account or into budget revenue accounts corresponding to each type of tax obligation.

Establishing easier electronic communication means with the legal/designated representatives of the business community for periodic information regarding the tax situation

It is proposed that, in their relationship with ANAF, taxpayers/payers enrolled in SPV send through this system a statement on their own responsibility from their legal/designated representatives, signed with a qualified certificate by the legal/designated representatives, in which they declare their own contact information and choose the method of electronic communication with the central tax authority for receiving information about the taxpayer/payer’s tax situation they represent. Additionally, through these communication means, the legal/designated representatives can give their consent for the tax authority to issue a debit order for bank accounts to pay the tax obligations owed by the taxpayers/payers. Moreover, by opting for recurring payments, taxpayers/payers agree that when payment deadlines are reached, their bank account will be debited up to the amounts required to pay declared tax obligations, installments included in payment rescheduling schedules, as well as other obligations that are a condition for maintaining the validity of the granted payment relief.

Simplification of procedures for the disposal of seized and confiscated goods

It is proposed to simplify the principles of auctioning goods, with the aim of, on the one hand, making the conditions for participating in auctions more flexible, and on the other hand, creating the legal framework for publicizing goods through specialized platforms and for digitalizing the auction organization activity through the online platform. In fact, a project to develop an electronic auction platform is financed through the PNRR, which aims, on the one hand, to facilitate the media coverage of goods seized by ANAF, and on the other hand, to dispose of them through a transparent and competitive process, so that the value of the auctioned goods increases.

Measures to strengthen financial discipline regarding cash collection and payment operations in the case of debtors who have garnishments on their bank accounts

It is proposed to reduce the existing thresholds for cash collection and payment operations in the case of debtors who have garnishments on their available funds until the decision to lift them is issued, considering the low recovery rate of debts due to the fact that their financial liquidity is not managed through bank accounts. In this regard, taxpayers mentioned in Article 1 paragraph (1) of Law no. 70/2015, with subsequent amendments and completions, who have bank garnishments established, conduct cash collection and payment operations under the following conditions:

• In the case of large taxpayers for whom garnishments have been established for budget obligations exceeding the amount of 40,000 lei, from the persons mentioned in Article 1 paragraph (1) of Law no. 70/2015, with subsequent amendments and completions, collections are made up to a daily total limit of 5,000 lei, and payments to these are made up to a daily total limit of 5,000 lei;
• In the case of medium-sized taxpayers for whom garnishments have been established for budget obligations exceeding the amount of 20,000 lei, from the persons mentioned in Article 1 paragraph (1) of Law no. 70/2015, with subsequent amendments and completions, collections are made up to a daily total limit of 2,500 lei, and payments to these are made up to a daily total limit of 2,500 lei;
• In the case of other categories of debtors, except for individuals, for whom garnishments have been established for budget obligations exceeding the amount of 10,000 lei, from the persons mentioned in Article 1 paragraph (1) of Law no. 70/2015, with subsequent amendments and completions, collections are made up to a daily total limit of 1,000 lei, and payments to these are made up to a daily total limit of 1,000 lei.

Introduction of a digital identification number as an alternative to the CNP

It is proposed that individuals use a digital identification number as an alternative to the CNP, to ensure the proper functioning of digital systems that require the use of individuals’ CNPs. Thus, an individual may choose to prove their identity in dealings with the tax authority by using the digital identification number instead of the CNP.