TAX ALERT – Government Emergency Ordinance (GEO) No. 118/2020
Government Emergency Ordinance (GEO) No. 118/2020 – SME Leasing Program for Equipment and Machinery
The Goverment Emergency Ordinance no. 118/2020 regarding the Program supporting small and medium enterprises named “SME Leasing Program for Equipment and Machinery” (hereinafter “GEO 118/2020”) entered into force on the 24th of July 2020. The program is intended to provide guarantee facilities by the state in the form of making available to non-bank financial institutions registered in the Special Register at the National Bank of Romania of annual guarantee ceilings for financial leasing for the purchase of new or second-hand goods necessary to carry out the activities of SMEs, as well as the activities of the affiliated enterprises with or more than 250 employees, as users.
The program will be a multi-annual one and consists in granting the state guarantees, through the Ministry of Public Finance, in the favor of each beneficiary participating in the program for the leasing financing intended for the purchase of new and / or second-hand movable property through financers, as follows:
a) A maximum of 80% of the financing amount, excluding interest, commissions and other expenses related to the guaranteed financing, for the purchase of IT equipment in a financial leasing operation;
b) A maximum of 60% of the financing amount, excluding interest, commissions and other expenses related to the guaranteed financing, for the purchase of technological machinery and equipment, vehicles for the transport of goods and persons, used for commercial purposes in a financial leasing operation.
The maximum cumulated value of the state-guaranteed financing that can be granted to a beneficiary within this facility is 5,000,000 lei.
In order to be eligible, the beneficiaries must meet a series of conditions expressly mentioned in the Ordinance.
Beneficiaries from the following sectors/areas are not eligible for guarantees under the program:: financial intermediation and insurance, real estate transactions, gambling and betting activities, production or sale of weapons, ammunition, explosives, tobacco, alcohol other than wine and beer, substances under national control, narcotic and psychotropic plants, substances and preparations, rental and leasing activities, investigation and protection activities.
The characteristics of the movable goods that can be purchased within the program, the conditions for granting state guarantees, the rules for managing the annual ceilings and guarantees as well as the mechanism for organizing the execution of the Ordinance will be established by the methodological application rules.