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Legal Education Programme for Individuals Fleeing Ukraine in Romania: Fiscal Facilities Granted for Supporting Refugees and NGO Initiatives

Fiscal Facilities Granted for Supporting Refugees and NGO Initiatives

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Legislation provides for the following types of aid that may be granted to refugees by individuals or legal entities.

  • Donations in cash, through a specific platform created by IGSU, may be performed online through the website ghiseul.ro or in cash/POS at the Treasury offices
  • goods and services provided free of charge directly to the persons affected by the armed conflict in Ukraine having humanitarian purposes
  • goods, financial means and services provided to UNICEF and other international organizations, which carry out their activities according to special agreements to which Romania is a party

Benefits for the persons granting such support

As a general comment, note that all types of support granted to refugees should be documented so that the nature, value and tax treatment applied to such support can be justified in case of a future tax audit.

Donations

Individuals carrying out economic activities (i.e. freelancers) and legal entities granting donations in cash through the specific platform created by IGSU towards refugees may deduct such value when computing the taxable base for corporate income tax, microenterprise tax and income tax.

Expenses with goods and services - applicable until 31st December 2022

  • CIT payers – (i) limited deductibility considered for social expenses; applicable threshold is of 5% of total salary expenses or (ii) non-deductibility for tax purposes, but considered as fiscal credit and deducted from the corporate income tax liability within one of the limits provided for sponsorships (the minimum value between 0,75% of the annual turnover or 20% of the corporate income tax due)
  • Microenterprise income tax payers – expenses assimilated to sponsorships and can be deducted from the value of the microenterprise tax payable to the state in the limit of 20% of the income tax due for the quarter in which the expenses were incurred
  • Income tax payers (e.g. freelancers)(i) limited deductibility considered for social expenses; applicable threshold is of 5% of total salary expenses or (ii) limited deductibility as sponsorship expenses in the limit of 5% of the base represented by the difference between total income and total deductible expenses (excluding sponsorship, private scholarships, protocol expenses)

VAT – applicable until 31st December 2022

Goods and services granted free of change for humanitarian purposes are not subject to VAT.

Goods, financial means and services provided to UNICEF – no limitation in time

  • CIT payers – non-deductible expenses, tax credit can be claimed in the limits applicable for sponsorships (the minimum value between 0,75% of the annual turnover or 20% of the income tax due)
  • Microenterprise payers – can be deducted from the tax payable to the state in the limit of 20% of such tax  

Meals and accommodation for refugees

Individuals that provide shelter to refugees are entitled to receive from the state budget an amount of RON 20/day for meals and RON 50/day for accommodation per each refugee. The procedure for requesting such amount from the state budget is regulated through specific normative acts.  Such amounts represent non-taxable income from a tax perspective.

Conclusion

Fleeing to neighbouring countries like Poland, Romania or Moldova, Ukrainians need not only shelter, but means to support themselves and their families. Looking for employment or a home, relocating a business and complying with the legal provisions of the hosting countries can be a difficult challenge.

DLA Piper’s office in Bucharest takes a step forward in assisting Ukrainian refugees who decided to settle in Romania find the right answers to their legal concerns. This brochures uncovers the provisions of the Romanian legal system and serves as a guide to any Ukrainian citizen in search for work or a place to stay.

We will continue to support the Ukrainian community in Romania with adequate advice and encourage other organizations in their capacity to offer support.

More articles from this series:

Legal Education Programme for Individuals Fleeing Ukraine in Romania: Employment

Legal Education Programme for Individuals Fleeing Ukraine in Romania: Entrepreneurship

Legal Education Programme for Individuals Fleeing Ukraine in Romania: Establishing a Non-Governmental Organization in Romania ("NGO")

Legal Education Programme for Individuals Fleeing Ukraine in Romania: Living in Romania

By Cristina Popescu, Tax Consultant, DLA Piper

Romanian Knowledge Partner

Țuca Zbârcea & Asociații is a full-service independent law firm, employing cross-disciplinary teams of lawyers, insolvency practitioners, tax consultants, IP counsellors, economists and staff members. It also operates a secondary law office in Cluj-Napoca (Romania), and has a ‘best-friend’ agreement with a leading law firm in the Republic of Moldova. In addition, thanks to the firm’s dedicated Foreign Desks, the team provides the full range of services to international investors seeking to gain a foothold or expand their existing operations in Romania. Since 2019, the firm and its tax arm are collaborating with Andersen Global in Romania.

Țuca Zbârcea & Asociaţii is providing legal services in every aspect of business, covering all major areas of practice: corporate and M&A; litigation and international arbitration; corporate tax; public procurement; TMT; employment; insurance; banking and finance; capital markets; competition; healthcare and pharmaceutical; energy and natural resources; environmental; intellectual property; real estate; regulatory legal services.

Țuca Zbârcea & Asociaţii is a First-Tier law firm in all international legal directories and a multiple award-winning law firm both locally and internationally. It received the CEE Deal of the Year Award (DOTY Awards 2021) and the Law Firm of the Year Award: Romania (IFLR Europe Awards 2021). 

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