Tax amnesty has made taxpayers, companies and individuals alike, to react to the announced measures, and eight out of ten companies that request legal advice on the amnesty intend to pay their tax debts, according to a specialist survey released on Thursday.

After the public announcement of tax amnesty, the number of requests for legal advice on taxation tripled from a normal period.

At the same time, some of the good payer companies want to know if from a legal point of view the new measures are discriminatory and if there is a legal way to challenge the tax amnesty.

„In the last few days, once the tax amnesty was announced, there has been a wave of requests regarding the legal understanding of the new measures. In fact, there is a significant increase in interest in voluntary tax compliance. Many taxpayers, both legal entities and individuals, are showing an increased willingness to pay their outstanding debts in order to benefit from Government Emergency Ordinance 107/2024. Most requests (80%) came from companies, in most cases companies with arrears in the payment of taxes that are interested in taking full advantage of the discounts offered by the tax amnesty. These are from fields such as IT, transport or HoReCa,” according to Laurentiu Mihai, a lawyer specialising in tax law and founding partner of the LMVD law firm.

According to the lawyers, the tax amnesty may possibly violatethe principle of fair contribution to public expenditures provided for in Article 56 of the Constitution, in terms of the fair allocation of tax burdens. Although taxpayers who have paid their taxes on schedule may perceive this measure as discriminatory, their possibilities to legally challenge the tax amnesty are limited.

„The direct challenge of the emergency ordinance in court by a taxpayer who has no debts is unlikely, as a strict litigation with a constitutionality challenge cannot be initiated,” according to the firm.

Good payers call tax amnesty discriminatory, want to challenge it (analysis) As for companies and individuals calling on tax lawyers to find out if they qualify for the discounts offered by the amnesty and how these measures can be as advantageous as possible for them, a legal advice involves a complex and personalised analysis of the situation of each taxpayer.

The process begins with a detailed assessment of the taxpayer’s tax history, including all tax liabilities, potentially time-barred or disputed, to determine eligibility and benefits for the amnesty.

„In practice, we frequently encounter cases with complex legal and tax nuances. (…) The purpose of legal advice is to explain to the client the legal implications of the different options available, to help better understand their legal situation, as well as the incumbent rights and obligations in the specific context of the tax amnesty. (…) The final decision on the payment of debts always belongs to the customer. There are also taxpayers who want to benefit from amnesty, but who will not have the money to pay the outstanding principal debt. But most taxpayers have expressed their intention to pay their tax debts.”

LMVD anticipates an improvement in voluntary tax compliance, at least in the short term, as taxpayers are taking advantage of this opportunity to regularise their tax situation.

In the short term, the new tax amnesty will have the expected effect of tax compliance and maximisation of the collection of outstanding tax debts, but it is also seen as a sign of „weakness” of the state in the face of tax evasion and its inability to secure efficient levers for the collection of tax debts.

„If the Romanian government regularly adopts such amnesty measures, there is a risk of creating a dangerous precedent. That could encourage certain categories of taxpayers to deliberately postpone voluntary tax compliance in the hope that they will benefit from future amnesties.”

Tax audits have increased significantly amidst an increasingly pressing national government deficit. According to lawyer Laurentiu Mihai, in recent months the number of customers of individuals who got checked by the ANAF tax administration has increased and a further increase in control actions by ANAF is expected, as the tax on income from non-identifiable sources has increased from 16% to 70% as of July 1, 2024. At the same time, VAT paying companies will experience a greater number of tax inspections on value added tax in order to reduce the difference between what is collected and what is due.

Laurentiu Mihai, Vicentiu Dine – Law Firm (LMVD ) is specialising in tax law, civil law, intellectual property law, public procurement law, competition law, consumer protection law and international arbitration and other diverse and complex areas of law. The company offers legal advice and specialist assistance to companies in areas such as IT, transport, HoReCa, entertainment, film production and others, and also to individuals.

AGERPRES