The central tax authority (Ministry of Public Finance and the National Tax Administration Agency, through specialized structures with responsibilities for managing tax claims, including units subordinate to the Ministry of Finance or ANAF) grants, upon the debtors’ request, installment plans for a period of up to 5 years.

For debtors who do not own assets to provide collateral in the amount specified by the Fiscal Procedure Code and cannot provide any form of guarantee, or if the amount of the guarantees provided is less than 50% of the outstanding tax obligations subject to the facilitation of payment, the installment plan is granted for a maximum of 6 months.

Instalment plans are not granted for tax obligations totaling less than 500 lei for individuals, 2,000 lei for unincorporated associations, and 5,000 lei for legal entities.

For outstanding tax obligations, local public authorities (specialized structures within the authorities of local public administration with responsibilities for managing tax claims) grant, upon the debtors’ request, facilitations for payment in the form of installment plans for local budget taxes and other local revenues.

In this regard, upon the well-justified request of the taxpayer, the local tax authority may grant the following facilitations for outstanding tax obligations:

a) installment plans and/or deferrals of tax obligations, as well as budgetary obligations (fines of any kind administered by the tax authority, budgetary claims established by other authorities and transmitted for recovery to tax authorities according to the law, including budgetary claims resulting from contractual legal relationships established by court decisions or other documents that, according to the law, constitute enforceable titles).

b) exemptions or reductions of late payment penalties.

Installment plans are granted for a period of up to 5 years, and deferrals are granted for a period of up to 6 months but cannot exceed December 20 of the fiscal year in which they are granted.

During the period for which deferrals or installment plans are granted, for the principal tax obligations that are scheduled or deferred, late payment penalties of 0.5% per month or fraction of a month are due, representing the equivalent of the damages.

During the installment or deferral period, 50% of the late payment penalties, representing their penalty component, related to the scheduled or deferred tax obligations, are deferred for payment, and if the scheduled or deferred amounts have been fully settled, the deferred late payment penalties are canceled.

For local tax obligations scheduled and/or deferred, taxpayers must provide guarantees as follows:

a. In the case of individuals, an amount equal to two average installments, representing scheduled local tax obligations and calculated late payment penalties, in the case of installment plans, or an amount resulting from the ratio between the value of deferred debts and late payment penalties calculated and the number of approved months for deferred payment, in the case of deferrals.

b. In the case of legal entities, the guarantee must cover the total scheduled and/or deferred tax obligations.

The request for installment plans, hereinafter referred to as the request, is submitted to the competent tax authority’s registry or sent by mail with acknowledgment of receipt and is resolved by the competent tax authority within 60 days from the date of the request’s registration.

In the case of debtors who do not own assets or if the amount of the guarantees provided is less than 50% of the outstanding tax obligations subject to the facilitation of payment, the request may be accompanied by a proposed installment schedule.

Within a maximum of 5 working days from the registration of the installment request, the competent tax authority issues, ex officio, the tax certification in which the outstanding tax obligations are specified as of the issuance date, and communicates it to the debtor.

The debtor’s request is resolved by the competent tax authority through a Decision on installment or a Decision of rejection.

If the installment decision is issued, the amount and terms of payment of the installment rates are determined by installment schedules that are an integral part of the installment decision. In this case, the rates are due on the payment dates specified in the Decision.

If the amounts scheduled for payment are fully settled, the competent tax authority communicates to the debtor the Decision on the completion of the installment.

Author: Atty. Ionut Sfetcu