The amount that can be redirected

With the entry into force of OPANAF no. 1679/2022, taxpayers who pay income tax or micro-enterprise income tax may request the redirection of certain tax amounts due within 6 months from the statutory deadline for submitting the annual income tax return, respectively, the tax return on incomes of micro-enterprises for the IV quarter by submitting form 177 “Application for recalculation of income tax/income tax of micro-entrepreneurs”.

Thus, until December 27, 2022, taxpayers of income tax that is a tax year that is a calendar year / taxpayers of income tax of micro-enterprises, who in 2021 provided sponsorship assistance below the calculated maximum amount, according to the provisions of the Fiscal Code, have the opportunity to redirect the difference up to the maximum amount established by law. Similar to sponsorship/patronage/private scholarship contracts for which expenses have been incurred during the year, the redirection must be carried out in accordance with the provisions of Law 32/1994, Law 334/2022 or the relevant provisions of the National Education Law No. 1/2011, depending on the circumstances. If the beneficiary entity is a non-profit legal entity or a religious organization, the redirection can only be made if the beneficiary of the sponsorship is registered on the date of payment of the amount in the Register of religious organizations/cells for which tax deductions are calculated. are provided

Conclusion of an agreement on sponsorship / patronage / private scholarship

Although there is no OPANAF. 1679/2022 does not clearly stipulate the obligation to conclude an agreement on sponsorship/patronage/private scholarship, form 177 provides a separate column in which the number and date of the agreement on the provision of sponsorship/patronage/private scholarship must be entered. is completed for each beneficiary.

In addition to the mandatory elements that must be taken into account when concluding such a sponsorship agreement in accordance with the provisions of the law, it is recommended that these agreements also include a reference to OPANAF no. 1679/2022. In particular, it should be noted that the purpose of the agreement is to redirect amounts from income tax/microenterprise income tax and that the payment to non-profit organizations will be made by ANAF by redirection from income tax/paid microenterprise income tax.

Although taxpayers will enter into sponsorship/patronage/private scholarship contracts in their own name for the amounts they intend to divert, given that the making of payments related to diverted income tax/micro enterprise income tax amounts remains the responsibility of the fiscal authority, these redirections will not be reflected in the accounting of taxpayers, the contract is drawn up to confirm the application on form 177.

Correction of amounts declared to ANAF

Taxpayers can correct a filed Form 177 by submitting a Clarification Request.

In practice, there may be situations where, after filing Form 177, it is necessary to correct the income tax/micro enterprise income tax for the year for which the redirection was made. When the correction is made in the sense of reducing the tax debt, it can end up in a situation where the tax authority redirects, based on the 177 return originally submitted by the taxpayer, an amount greater than the amount that the taxpayers would have had the right to redirect. In such situations, taxpayers will owe to the state budget the difference between income tax/micro enterprise income tax, which was diverted additionally.

Correlations between Form 177 and other existing data in the ANAF database

Given the ANAF’s goal to centralize the data transmitted through the mandatory declaration forms and make preliminary correlations based on them, we can expect such checks between the data contained in the Form 177 and the information already in the ANAF databases. Such prior correlations may include:

• verification of identification data of the beneficiaries specified in the form 177 and subjects included in the Register of religious organizations, in respect of which a tax discount is granted; this condition is also mentioned separately in OPANAF no. 1679/2022;
• The ratio of the maximum amount that can be redirected according to the law, declared in the form 177, with the maximum amount that can be redirected according to the law, calculated on the basis of the amount of taxes included in the income tax return 101 / 100 income tax returns of micro-enterprises and based on the value of the business indicator presented in the annual financial statements of taxpayers.

At the moment, the legislation only mentions the condition of repayment of income tax/micro enterprise income tax debits in order to initiate the process of redirection and settlement within the statutory period of 45 days. Otherwise, for taxpayers who have defaulted on income tax/microenterprise income tax arrears, the 45-day period starts from the day the arrears are settled. It remains to be determined what will be the reasons for the rejection of these requests.

Separately, it should be taken into account that amounts paid for sponsorship/patronage/private scholarships up to and including the end of 2021, in excess of the limits provided by the Fiscal Code, may be transferred for deduction from income tax/income tax of micro-enterprises for the next 7 consecutive years. Starting in fiscal year 2022, in the event that sponsorship/patronage/private scholarship payments made during a fiscal year exceed the maximum limit that can be deducted from income tax calculated in accordance with the provisions of the Fiscal Code, they will no longer be carried over to subsequent years .

The article is signed by Diana Lupu, Global Compliance and Reporting Partner, EY Romania and Ana-Maria Nicu, Senior Global Compliance and Reporting Manager, EY Romania

Article supported by EY Romania