The Avalanche of Fiscal Changes and State Aid Schemes
How do we manage them?
In the past months, there have been several changes and changes of the changes to the legislation. These affect most companies. Some of the changes are of a fiscal nature. Others, such as various state aids, are not, but are easily mistaken by many people.
The following period is expected to be very rich in legislation updates. The year 2021 started with around 100 changes with major impact for the companies. You can read about all that here.
Small and medium sized companies usually have an accountant and/or an external accounting and taxation consultant. And possibly a law firm to help them. But it is good to have your own overview of what’s happening and to ask for the support (if needed) of the specialists that you trust.
Frequently asked questions
How can all these changes and their impact be successfully managed? How can state aid schemes be used effectively? Is it reasonable to expect a good accountant or an accounting firm to solve all the problems for you?
In theory, a good accountant is (or should be) well prepared primarily in his field – consulting in accounting and tax expertise.
The wrong perception is to consider that being a good accountant should also include the ability to manage everything bureaucratic or all the processes involving financial resources and the relationship with different government institutions.
Even if an accountant has the ability and the skills to provide such advice and help, it is almost impossible to find the time to manage on his own each and every situation generated by the legislative changes.
Accounting and tax advice
There is a clear difference between accounting and tax advice and the various state aids schemes that have emerged recently. Among the fiscal changes that are now coming into force are the following:
- the limit of V.A.T. upon collection has increased from 2 250 000 RON to 4 500 000 RON;
- the limit for the delivery of housing with low VAT rate (5%) for individuals remains 450 000 RON;
- regarding the V.A.T., from the beginning of 2021, transactions with the UK will follow the non-EU rules;
- Kurzarbeit – 2 000 euro for some companies without employees, 2 500 RON/employee working remote, aid for technical unemployment, aid for fixed-term employment and so on.
The first three examples can benefit from tax advice. The last point concerns state aids. Meaning that they involve reading and understanding the legislation, preparing the documentation, following the (often purely bureaucratic) procedures and contacting state institutions to apply for state aids. So, most of them imply legal and administrative work. Which, you guessed it, is not the accountant’s job to do.
The many legislative changes at the moment are due to the pandemic. Although the services provided by a good accounting firm require some additional knowledge (legal, HR etc.), this cannot replace, in all cases, the advice that only a qualified lawyer can provide.
The above relate in particular to situations outside a “normal” course of business. For example:
- coverage of the risk of litigation in case of dismissal of employees;
- relationship with the employees based on the law of social dialogue;
- tax disputes;
- the relationship with the Trade Register;
- preparation of employment contracts with special clauses;
- challenging the decisions of various state institutions;
- the understanding of all legal implications of different state aid schemes etc.
These situations can also occur in small and medium-sized companies. Of course, you can also involve the accountant in the process. But, in order to have everything in place, you cannot rely only on his expertise.
The consulting team
There is one way to successfully manage the issues related to the avalanche of fiscal changes and state aids schemes. You have to have the team effort of several departments or several experts. Often, the accountant is only consulted, without being the person in charge to manage such a process.
Therefore, the people responsible for the management of the company have a significant role here. For example, various state aid schemes only involve the preparation and submission of documentation to a state institution, according to the specific requirements.
In many cases, a good lawyer’s advice means everything. An HR specialist can be used to manage “sensitive” situations in relationship with the employees. Companies specialized in writing projects for accessing European funds and state aids can be of a major importance, too.
As a conclusion, finding and contracting qualified suppliers in these areas, and a good collaboration between them, can be the key to successfully manage and implement any tax and accounting changes that occur constantly and often in an “avalanche” form. And if you are looking for such suppliers, ENSO can be the best starting point for your needs.
Sorin Moldovan – CFO ENSO Business Services