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Compensation of debts between companies and the state. Implementing guide for companies26 September 2023

Compensation of debts between companies and the state. Application guide for companies

Tax offset is a process that allows companies to balance their tax liabilities with their claims to the state, bringing substantial cash-flow benefits for companies. Simply put, companies that have to pay certain taxes to the state can offset them with certain, liquid and enforceable amounts that the state owes in turn, which allows companies to use compensation as a tool to optimize and stabilize cash flows.

The mechanism is regulated by the Fiscal Procedure Code, in art. 167, which defines compensation as the operation that allows the settlement of the tax debts of companies through the claims they have against the state. These debts include taxes, duties, contributions and other amounts owed to the general consolidated budget.

The procedure is relatively simple and only involves the completion and submission by the willing companies of a standard application, called “Application for the compensation of fiscal/budgetary obligations”. The document model is regulated as an annex to ANAF Order no. 362/2022, and the application is available on the ANAF website or in the Virtual Private Space (SPV).

The application can be completed and sent electronically through the SPV, together with a series of mandatory documents that need to be attached, namely:

• Copy of CUI (Unique Trade Registration Certificate)
• Deed of delegation/power of attorney
• Documents certifying payment / Payment confirmation

Once the application is submitted, the competent tax body has the obligation to resolve the application within 45 days of registration and communicate the decision within seven days of resolution. The decision issued by the fiscal body produces legal effects as soon as it is communicated to the taxpayer. If he is dissatisfied with the content of the decision, the taxpayer has the right, as in the case of any fiscal administrative act, to file an appeal, the term for this procedure being 45 days from the communication of the decision.

If the tax authority accepts the request for compensation, the tax obligations indicated by the applicant company will be extinguished with priority. In the event that certain specific debts have not been indicated or the amount paid is not sufficient to compensate all the main and ancillary tax obligations, they will be extinguished in the order of their seniority (first the main ones, in the order of their seniority, and then the accessories, on the same grid), followed by obligations with future maturities, at the request of the taxpayer. It is also good to know that a compensation procedure can actually start from the date on which the claims are certain, liquid and due.

It is also worth pointing out that the compensation procedure is carried out first between the fiscal debts owed to the same budget, and the remaining difference, if it exists, will be compensated with fiscal debits owed to other budgets, proportionally.
In addition, from this year, by Law no. 93/2023, a new article was introduced in the Fiscal Procedure Code, which also allows the compensation of fiscal claims against local budgets. According to the new regulations, which entered into force as early as April, but which cannot yet be implemented because the authorities have not published a concrete compensation procedure in these situations, taxpayers who have tax claims against local budgets, established through final court rulings, they can request their extinguishment by offsetting their outstanding obligations to the state budget.

This compensation can be achieved both with current obligations to the state budget and with future ones, without compensation between budgets, regardless of the fact that the obligations and claims are administered by the same public authority or not.

The actual procedure for extinguishment and exchange of information between local tax authorities and central tax authorities was supposed to be published by the end of May, but the authorities have not issued it yet, so the new facility, although very useful for companies, cannot still be yet accessed.


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Cristina Săulescu

Tax & Transfer Pricing Partner


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