By: Alina Moldovan
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Legal Update – August – November 2022
Some of the pieces of legislation that were published in the Official Journal of Romania during August-November 2022, as mentioned herein, include general interest information, as follows:
I. DE MINIMIS AID SCHEME FOR CONTINUOUS TRAINING AND REQUALIFICATION OF CORPORATE EMPLOYEES
Order No 20953 of July 22nd, 2022, published in the Official Journal of Romania No 770 of August 2nd, 2022, sets forth a de minimis scheme dedicated to undertakings that wish to improve their employees’ competences, titled “Continuous Education/Requalification of corporate employees”.
What is Order No 20953 intended for?
▪ To support small and medium sized enterprises (SMEs) via non-refundable funds, to help improve their employees’ competences, applicable in respect of emerging technologies.
▪ The de minimis scheme is intended to provide funds for the training activities in the following emerging technologies:
– The internet of things;
– The big data;
– The cloud technologies;
– The automated learning;
– The artificial intelligence;
– The automation of robotics processes;
– The blockchain;
– The cyver-physical systems;
– The additive manufacturing.
Who are the beneficiaries and what amounts they benefit from?
▪ The beneficiaries are the SMEs that:
– Have no net budgetary liabilities:
• In excess of 1/12 of the liabilities due over the last 12 months;
• In excess of 1/6 of the total liabilities due over the last quarter;
– Did not benefit from financial support from public funds, including EU funds, for the same activities;
– Are not undergoing insolvency, bankruptcy, judicial reorganization, dissolution, liquidation or temporary suspension of their activity;
– At the time the funds are granted, they are included in one of the following categories of undertakings: micro-enterprises, small-sized enterprises, mediumsized enterprises;
– Are not in one of the situations which are incompatible with the public funding.
▪ The maximum amount of the de minimis funds to be granted to a beneficiary, depending on the number of trained employees, is Euro 17,000.
II. REPRESENTATIVE OFFICES OF FOREIGN CORPORATIONS AND ECONOMIC ORGANIZATIONS IN ROMANIA
Government emergency Ordinance No 18 of August 3rd, 2022, published in the Official Journal of Romania No 779/2022, sets forth a set of new rules for the authorization and operation of the representative offices of foreign corporations and economic organizations in Romania.
What does the ordinance provide for?
▪ The operation permit based on which the foreign corporations and economic organizations may establish representative offices in Romania:
– Is issued via an e-platform, upon request;
– Is issued for minimum 1-year and may be extended for the same period;
– Is subject to payment of a fee worth Euro 1,000 per year;
– May be extended subject to the conditions mentioned above.
▪ For the activity carried out in Romania, the representative offices are under the obligation to register for taxation purposes in Romania, in accordance with the provisions of the Code of Tax Proceedings, and to pay the taxes and fees set out in the Tax Code.
▪ The representative office does not carry out economic operations on its own behalf.
▪ The financial and banking operations of representative offices are performed via accounts opened with bank operating on the territory of Romania.
III. CALCULATION OF CONTRIBUTIONS FOR EMPLOYEES HIRED BASED ON MULTIPLE INDIVIDUAL EMPLOYMENT AGREEMENTS
Order No 1855/2022, published in the Official Journal of Romania No 807/2022 sets forth the procedure applicable to employees who obtain in one month income from salaries or similar to salaries based on two or several individual employment agreements and the monthly calculation basis related to them is at least equal to the minimum national gross salary.
The social insurance contribution and the health social insurance contribution (hereinafter “CAS” and “CASS”) shall be determined based on the calculation basis related to the income obtained (according to the rules applicable to each contribution) and not based on the guaranteed minimum national gross salary, corresponding to the number of business days of the month in which the employment agreement was active.
What are the obligations laid down in Order No 1855/2022?
▪ Employees are under the obligation to provide each employer/income payer a declaration on his/her own liability whereby he/she states that he/she obtains income from salary or similar to the salary based on two or several individual employment agreements and the monthly calculation basis for them is at least equal to the guaranteed minimum national gross salary.
▪ The declaration on one’s own liability shall be filed on a monthly basis, no later than the 5th of the month following the one for which the salary rights are established.
▪ There is an exception from the rule applicable to this declaration, in the event that, for one of the employers, the monthly calculation basis for CAS and CASS related to the income from salaries and similar to salaries, corresponding to the number of days worked during that month, is at least equal to the guaranteed minimum national gross salary, then and in such event the employees shall not be under the obligation to file the declaration on one’s own liability with that employer.
▪ A natural person signs a full-time individual employment agreement with company A and a part-time individual employment agreement with company B.
For the activity carried out with company A, the natural person obtains a gross monthly income of 2,550 Lei and with company B, a gross monthly income of 400 Lei.
The aggregated monthly calculation basis, determined according to the specific rules applicable to each contribution is 2,950 Lei (2,550 Lei + 400 Lei) and the guaranteed minimum national gross salary is 2,550 Lei.
When comparing the aggregated monthly calculation basis worth 2,550 Lei with the guaranteed minimum national gross salary worth 2,550 Lei, it follows that the aggregated monthly calculation basis for the two individual employment agreements exceeds the guaranteed minimum national gross salary.
In this case, the natural person shall file the declaration on his/her own liability only with employer B, because with employer A the monthly calculation basis for the contributions is equal to the guaranteed minimum national gross salary (2,550 Lei).
With each employer, the employee’s CAS and CASS are calculated based on the monthly calculation basis determined according to the specific rules applicable to each contribution, i.e. 2,550 Lei for employer A and 400 Lei for employer B.
IV. MEASURES CONCERNING THE EUROPEAN CROWDFUNDING SERVICE PROVIDERS FOR BUSINESS
Law No 244/2022 regarding the measures for implementation of the Regulation (EU) 2020/1.503 of the European Parliament and of the Council of 7 October 2020 on European crowdfunding service providers for business was published in the Official Journal of Romania No 754/2022.
What is the crowdfunding service?
▪ Crowdfunding is a form of intermediation where a crowdfunding services provider facilitates the matching between the investors interested in offering funds for businesses and the project developers, via a digital platform of crowdfunding.
What does Law No 244/2022 provides for?
▪ The loan agreements and the collateral and/or personal security agreements intended to secure the repayment of the loans offered, signed by and between the investors and the project developers via the crowdfunding services provider authorized according to Regulation (EU) 2020/1.503 are writs of enforcement.
▪ The shares of limited liability companies may be used as instruments for the purposes of crowdfunding provided that they are not subject to restrictions likely to prevent their effective transfer, including restrictions regarding the manner in which they are offered or presented to the public.
V. CHANGES IN THE PROCEDURE FOR SETTLEMENT OF VAT REPAYMENT APPLICATIONS
Order No 1610 of September 5th, 2022, published in the Official Journal of Romania No 888, amended and supplemented Order No 2.809/2016 of the Chairman of the National Agency for Tax Administration approving the Procedure for settlement of VAT repayment applications filed by taxpayers not domiciled/not headquartered in Romania, domiciled/headquartered in other Member States.
What are the most significant changes?
▪ If, during the repayment period, the applicant has been registered for VAT purposes according to article 316 of the Tax Code, the specialized department prepares a report proposing that the VAT refund be refused;
▪ If suspicions do exist regarding some invoices for the purchase of goods/services, the specialized department may request an ad-hoc inspection of the taxable person established in Romania who issued the invoice;
▪ To apply the provisions of the order, the National Centre for Financial Information attached to the Ministry of Public Finance shall provide taxable persons with the necessary IT support for the electronic transmission of the refund application and the information requested.
VI. INTERPRETATION OF LAW NO 85/2014 ON PRE-INSOLVENCY AND INSOLVENCY PROCEEDINGS
The High Court of Cassation and Justice has, via its Decision No 14 of June 27th, 2022, published in the Official Journal of Romania No 902 of September 13th, 2022, admitted the referral in the interest of the law concerning article 169(1)(d), second sentence of Law No 85/2014 on preinsolvency and insolvency proceedings.
How to interpret article 169(1)(d), second sentence of Law No 85/2014 on pre-insolvency and insolvency proceedings?
▪ If the members of the management and/or supervisory bodies of the company that has become insolvent do not hand over the accounting documents to the insolvency practitioner, after prior notification by the latter, it shall be presumed that all the conditions necessary for the members of the management and/or supervisory bodies of the company to be held liable in tort for the actions referred to in article 169(1)(d) of the same law.
VII. REGISTRAR OF BENEFICIAL OWNERS
Government Emergency Ordinance No 123 of September 14th, 2022, published in the Official Journal of Romania No 906 of September 14th, 2022, amended Law No 129/2019 on prevention and control of money laundering and financing of terrorism, and on amending and supplementing some regulations.
▪ As of September 14th, 2022, the regies autonomes, the national companies and corporations and the full or majority state-owned companies as well are bound to lodge, upon incorporation or whenever a change occurs in the beneficial owner thereof, a declaration regarding the beneficial owner of the legal entity for the purposes of registration with the Registrar of beneficial owners of the company.
VIII. THE FIRE SAFETY PERMITTING/APPROVAL PROCEDURE WAS SIMPLIFIED
Decision No 1181/2022 amending and supplementing the Government Decision No 571/2016 for approval of categories of constructions and installations that are subject to fire safety permitting and/or approval was published in the Official Journal of Romania No 956 of September 30th, 2022.
What are the most significant changes?
▪ The list of buildings and installations subject to the fire safety approval procedure has been amended as follows:
• Categories of buildings and installations which have been excluded from the list of buildings to be approved for fire safety:
– catering premises with a floor area between 200 sq. m. and 600 sq. m.;
– buildings of exceptional and special importance, irrespective of surface area, height or use;
– buildings that host rooms/groups of rooms which are classified as “crowded rooms”, regardless of surface area, height or use.
• Categories of buildings and installations which have been included in the list of buildings to be approved for fire safety:
– Mixed-use buildings with an area of at least 1,000 sq. m., when the component units are not included in other categories provided for in Decision No 571/2016;
– Buildings for secondary, non-university tertiary, university or adult vocational education with a floor area of more than 600 sq. m., including the related accommodation;
– Commercial premises located in underground stations;
– “Crowded” rooms, with an area of at least 100 sq. m., which are part of civil buildings, in the basement, attic or roof terrace.
▪ Changes in the existing provisions of Decision No 571/2016:
– The provision regarding the premises of public authorities with an area of at least 600 sq. m. now covers the premises of the public institution;
– The provisions regarding tourist activities have been extended to include all accommodation buildings with more than 8 rooms and/or capable of accommodating 16 persons, together with the catering facilities therein;
– The provisions regarding production or storage facilities of 600 sq. m. or more now apply only to enclosed premises;
– The storage and distribution facilities for compressed natural gas used as fuel for vehicles subject to the procedure have been limited to those on public premises;
– The permitting procedure includes fire safety installations for existing buildings;
– The rooms or groups of rooms which are classified as crowded rooms and exit routes are included in the permitting procedure, regardless of floor area or purpose.
▪ The following categories of constructions and installations are also subject to the fire safety approval procedure:
– The public liquefied petroleum gas distribution systems for motor vehicles with a storage/storage capacity not exceeding 30 cubic meters if not located in mixed motor fuel distribution stations;
– The portable motor vehicle fuel dispensing stations with a storage/storage capacity not exceeding 30 cubic meters located in public premises;
– The temporary outdoor buildings or installations for shows or meetings with a seating capacity of 200 or more;
– The temporary outdoor constructions or installations for commercial purposes with a floor area of 2,500 sq. m. or more.
IX. THE LABOR CODE WAS AMENDED AND SUPPLEMENTED
Law No 283/2022, published in the Official Journal of Romania No 1013 of October 19th, 2022, significantly amended and supplemented the Labor Code.
What are the most significant changes?
▪ Clarifications regarding the scope of application of the Labor Code
– It is expressly stated that in terms of the scope of application, the Labor Code refers also to the employees (meaning irrespective of their citizenship) who validly work for an employer headquartered in Romania.
▪ Redefining the notion of “victimization” and prohibiting the application of any unfair treatment to employees as a result of their exercise of rights offered by the Law
– Victimization in employment relations is any adverse treatment, including in response to a complaint or referral to the competent bodies, and not only in response to legal action for violation of legal rights or of the principle of equal treatment and non-discrimination, as previously provided for in the Labor Code.
▪ Ensuring that additional information is made available to employees
– The possibility to inform the employees of the provisions of the internal regulations, including via electronic media;
– Informing candidates/employees of certain additional aspects, including the rights and conditions relating to vocational training offered by the employer, which should also be mentioned in the employment agreement.
▪ Supplementing the information to be provided to employees prior to employment, i.e. completing the individual employment agreement, as follows:
• The person selected for employment/the employee shall also be informed about:
– The fact that, in the absence of a stable job, the employer may offer him/her the possibility to offer transport or cover the costs of transport to different workplaces;
– The constituent elements of the salary income, shown separately, and the method of payment of the salary;
– The usual work hours, expressed as hours/day and/or hours/week, the conditions under which overtime is worked and compensated or paid and, where appropriate, the arrangements for organizing shift work;
– the duration and conditions of the trial period, if any (e.g. those conditions to be met by the employee in order to pass the trial period);
– the right to and conditions of vocational training offered by the employer;
– the employer’s covering the private medical insurance, additional contributions to the employee’s voluntary pension or occupational pension, and the granting, at the employer’s initiative, of any other rights where these
constitute cash benefits granted or paid by the employer to the employee as a result of the employee’s work.
If the employer fails to inform the employee of all the elements provided for in the Labor Code, the employee may refer the matter to the Labor Inspectorate, and in the case of employers who have in place their own inspection bodies, the employee may refer the matter to them. If the employer does not fulfil its information obligations, the person selected for employment/the employee is entitled to bring the matter before the competent court and seek compensation.
▪ New rights for employees and conditions for granting/maintaining them, such as:
– The employee’s right to apply for a transfer to a vacant position offering more favorable working conditions, if he/she has completed the trial period and has been with the same employer for at least six (6) months;
– The employee’s right to be absent from work in unforeseen circumstances caused by a family emergency due to illness or accident, which make the employee’s immediate presence indispensable, provided that the employer is informed in advance and the period of absence is made up until the employee’s normal working hours are fully covered (according to a schedule agreed between the employer and the employee);
– The employee’s right to carer’s leave for the purpose of providing personal care or support to a relative or a person living in the same household as the employee who is in need of care or support because of a serious medical condition, for a period of five (5) business days during a calendar year, at the employee’s written request;
– The employee’s right to paid paternity leave, with express reference to the provisions of Law No 210/1999.
▪ An express mention is introduced in respect of preservation of employees’ rights whose labor agreement was suspended
– The rights of employees whose employment agreement is suspended at their initiative (e.g. for parental leave, settling-in leave, paternity leave, leave to care for a sick child) and of employees absent from work in unforeseen circumstances caused by a family emergency due to illness or accident, acquired by them prior to the granting of such leave/absence from work, will be preserved for the duration of the leave or period of absence;
– For the purpose of determining the duration of the annual leave, the periods of paternity leave, carer’s leave and periods of unforeseen absence from work due to a family emergency caused by illness or accident shall be regarded as periods of work performed.
▪ Provisions regarding the work hours
– Working time is clarified by specifying that the work schedule is the employer’s way of organizing work, setting the hours and days when work begins and ends;
– With regard to the individualized work time, it is stated that the employer’s refusal to comply with the employee’s request for an individualized work time must be justified in writing within five (5) business days from receipt of the request. The employee has the right to return to the original work schedule at the end of the agreed period or if the circumstances for requesting an individualized work time have changed;
– Flexible working time arrangements give employees the opportunity to adapt their working hours, including through the use of remote working arrangements, flexible work schedules, individualized work schedules or short time working schemes.
▪ Provisions regarding dismissal of employees
– New interdictions regarding dismissal of employees, i.e. the impossibility to dismiss the employee for the exercise of his/her statutory rights, during carer’s leave, paternal leave, and during the period of absence from work for family emergencies.
▪ Provisions regarding the employers’ obligation to update the internal regulation and obtain the proof of acknowledgement by the employees
– Employers have the obligation to update their Internal Regulations. In this respect, two new chapters were added to the Labor Code, namely: a chapter for rules on notice of dismissal and a second chapter for information on general employee training policy, if any.
▪ Informing the employees about the new conditions applicable to the labor relation
– As regards the employee who has an employment relationship established prior to the date of entry into force of this law, additional information on the conditions applicable to the employment relationship shall be communicated by the employer, upon request, no later than thirty (30) business days from the date of receipt of the employee’s written request.
▪ Setting out the sanctions for failure to observe the newly introduced rights and/or obligations
– The failure to grant carer’s leave or parental leave to employees who meet the conditions laid down by law is punishable by a fine varying between 4,000 Lei and 8,000 Lei. The same fine is also applicable for the failure to comply with the legal obligation to treat employees equally.
X. REGISTRATION FORMALITIES FOR THE WHOLESALE DISTRIBUTION AND TRADING OF ALCOHOL AND/OR PROCESSED TOBACCO
Order No 5697/2022, published in the Official Journal of Romania No 1062 of November 2nd, 2022, approved the procedure for registration of wholesale distribution and trading of alcohol and/or processed tobacco.
What does Order No 5697/2022 provides for?
▪ The wholesale distribution and trading of alcohol and/or processed tobacco are registered upon request of the economic operators via an application form for the registration of wholesale distribution and trading of alcohol and/or processed tobacco to be filed with the customs authority.
▪ For this purpose, the economic operators must:
– Hold proper storage premises;
– Be equipped with the means necessary to identify forged or counterfeited markings;
– Not be declared tax-inactive and be in operation;
– Not have outstanding tax liabilities to the general consolidated budget of the type administered by the National Tax Administration Agency.
▪ The marketing permit is not transferable and can only be used by the holder.
XI. THE REFERENCE INTEREST RATE IS 6.75% PER ANNUM
As of November 9th, 2022, the monetary policy interest rate is 6,75% per annum (increased from 6.25% per annum).
XII. REMOVAL OF ILLEGALLY PARKED VEHICLES BY TRAFFIC POLICE
Law No 302/2022 which amends paragraph (1) of article 64 of Government Emergency Ordinance No 195/2002 regarding the traffic on public roads, was published in the Official Journal of Romania No 1107/2022.
What does Law No 302/2022 provide for?
▪ The road police are entitled to order the removal of vehicles illegally parked.
XIII. SUPPORT FOR TOURISM OPERATORS TO DEVELOP THEIR INCOMING ACTIVITIES
Order No 1759/2022 approving the de minimis scheme intended to support the tourism operators in their efforts to develop the incoming activity was published in the Official Journal of Romania No 1080/2022.
What is the incoming tourism?
▪ A branch of national tourism dealing with bringing foreign tourists to Romania via organization and sale of tourist packages in Romania for foreign tourists.
Who are the beneficiaries?
▪ Any entity that carries out an economic activity that meets the following requirements:
– It is licensed as a tour operator;
– Has no outstanding debts to the general consolidated budget;
– Is not undergoing dissolution, judicial reorganization, liquidation, enforcement, operational closing, insolvency, bankruptcy or temporary suspension of its business;
– Carried out incoming tourism activities during the previous year for more than 200 foreign tourists.
What does the aid consist of?
– Financial support of 40 Euro for each foreign tourist who has purchased and paid, prior to the application, via an incoming travel agency in Romania, a tourist stay or tour of at least 4 nights’ accommodation in Romania;
– Additional financial support of 2 Euro for each extra night spent beyond the 4 nights mentioned above.
XIV. ANAF’S LIST OF GOOD TAXPAYERS
ANAF shall publish on a quarterly basis a list of taxpayers who declared and paid when due their tax liabilities and have no outstanding debts.
Conditions to be cumulatively met in order to be included in the list
▪ To file, during the limitation period applicable to the right to determine tax liabilities, all tax returns according to the tax vector (this condition is also met if, for the periods in which tax returns have not been filed, tax liabilities have been determined, by a decision of the tax authority);
▪ To pay the principal and accessory tax obligations when due, in the quarter for which the list is published;
▪ To have no outstanding budgetary obligations at the time of listing.
▪ The taxpayers who are included in this list include the taxpayers that benefit from payment incentives according to the law, which are currently ongoing.
XV. NEW RULES ON EMPLOYMENT AND TRANSFER OF FOREIGNERS IN ROMANIA
Government Emergency Ordinance No 143/2022 amends article 17 of Government Ordinance No 25/2014 on the employment and transfer of foreign citizens on the territory of Romania and on amending and supplementing some regulations governing the foreign citizens’ presence in Romania.
▪ A foreign citizen employed based on the employment permit (except for the seasonal workers) may take up a new job with the same or another employer, at any time during the validity of their single permit or the EU blue card.
Condition to be met to obtain an employment permit for the same employer
▪ If the foreign worker changes jobs but remains with the same employer who obtained the original employment permit, the employer no longer has to prove the following for the new permit to be issued:
– it has paid its obligations to the state budget for the last quarter prior to submitting the application;
– the foreign worker has applied for a job vacancy for a Romanian citizen, for a citizen of another Member State of the European Union or of the European Economic Area, for a citizen of the Swiss Confederation or for a foreigner holding the right of long-term residence in Romania;
– that the annual quota per type of worker newly admitted to the labor market must not have been exhausted;
– the foreign worker is in possession of a valid document for crossing the state border, the fact that no alerts have been entered in the National Information System for alerts for the purpose of refusing entry into the territory of Romania, the fact that he/she is not reported by the competent authorities as a danger to national defense and security, etc.
What other changes are introduced by Government Emergency Ordinance No 143/2022?
▪ If no more than one year has passed since the registration of the individual employment contract with the previous employer, a new job with another employer can only be taken on the basis of the written agreement of the previous employer, which is submitted by the new employer to the General Inspectorate for Immigration.
▪ However, the above provision does not apply where the termination of the individual employment contract was required by the previous employer or following the agreement of the parties.
XVI. IMPORTANT CHANGES IN THE COMPANY LAW
Law No 265/2022 on the registrar of companies and amending and supplementing other regulations applicable to the registration with the registrar of companies (“Law No 265/2022”), which basically refers to the procedure for registration with the registrar of companies, was published in the Official Journal of Romania No 750 of 26th July 2022.
What are the most important changes?
▪ The appointing of a new director, manager, member of the managing committee or of the supervisory board of a company shall be valid only if the newly appointed person expressly accepts it – this is a validity condition for the mandate of that person to be effective.
In this respect, new provisions are introduced, which refer to the undertaking to meet the conditions laid down in article 6 of Company Law No 31/1990, which shall be carried out as follows:
– Founding members undertake liability by signing the articles of incorporation;
– The directors, the members of the board of directors, the managers, the members of the managing committee, the auditors undertake liability by expressly accepting their mandate;
– The financial auditor undertakes liability by signing the services agreement.
▪ The articles of incorporation shall include two new elements, that is:
– The passing of decisions in the general meeting of shareholders with the vote of all shareholders, in the event that, because the contribution to the share capital is tied, no absolute majority can be established; and
– The identification data of the beneficial owners and of the manner in which they control the company.
▪ In case of limited liability companies, a new obligation is introduced, i.e. to pay up at least 30% of the amount of the subscribed share capital no later than three (3) months after the date of registration, but in any case, before commencing operations in the name of the company. The difference in the subscribed share capital will be paid up, as appropriate:
– For contributions in cash, within twelve (12) months from the registration date;
– For contributions in kind, no later than two (2) years from the registration date.
▪ As regards the increase in the share capital of all companies, the decision of the general meeting of shareholders approving such increase shall be valid and effective only insofar as it is implemented within eighteen (18) months from its passing (the current timeframe is 12 months).
▪ The company’s representative shall no longer be under the obligation to file their specimen signatures with the registrar of companies.
▪ A new procedure is introduced, according to which dissolution may be initiated and subsequently ordered by the registrar of companies (and not by the Tribunal, as it was until now) in the event that:
– the conditions regarding the corporate seat are no longer met, because the validity of the document certifying the right of use of the premise registered as corporate seat expired;
– the company’s activity was terminated or was not resumed after the elapse of the temporary inactivity period, notified to the tax bodies and registered with the registrar of companies, period which cannot exceed three (3) years from the date of registration with the registrar of companies;
– the duration set out in the articles of incorporation elapsed, in case of companies incorporated for a limited period.