Government Decision no. 628/2020 amending and supplementing Government Decision no. 807/2014 establishing state aid schemes intended to stimulate investments with a major impact on the economy, was published in the Official Gazette no. 711 dated 7 August 2020, and came into force as of the date of publication (“GD 628/2020”).
The state aid scheme established in the normative act amended by GD 628/2020 is intended to stimulate investments with a major impact on the economy, so companies which intend to invest at least 1 million EUR for capacity growth, modernization etc., may obtain financial facilities in the form of state aid, according to Government Decision no. 807/2014 establishing state aid schemes intended to stimulate investments with a major impact on the economy (“GD 807/2014”).
GD 628/2020 brought in amendments relating to the qualifying conditions that the future beneficiaries of the aid scheme should meet in order to benefit from state aid. The need to revise such conditions resulted from the current context of the economic evolution affected by the Covid-19 pandemic.
The amendments adopted are intended to clarify the current provisions of GD 807/2014 and to simplify the procedure for granting the state aid, as summarized below.
The extension of the period for issuing funding agreements, as well as of the period for making the payment of the state aid
• In order to align the provisions of GD 807/2014 with the new provisions under the European legislation , based on which the state aid scheme was prepared, the following were amended:
- the initial period for issuing funding agreements so as to extend it until 31 December 2023;
- the payment of the state aid is performed until 2028, up to the annual budget allotted to the scheme.
Establishing the gross amount of the state aid
• GD 628/2020 regulated the manner for establishing the gross amount of the state aid that an undertaking may benefit from in the aid scheme in the period 2021-2023, by reference to the eligible expenses, which will be implemented based on the regional charts approved by the European Commission for the period 2021-2023.
• According to GD 807/2014, eligible expenses are deemed to be the costs without VAT related to the execution, respectively purchase of tangible and intangible assets (up to maximum 50% of the total costs), as well as the expenses for the lease of the buildings related to the initial investment. The tangible and intangible assets should be operated exclusively for accomplishing the goals of the investment, should be included in the assets of the undertaking and should remain associated to the investment for 5 years from the completion of the investment and should be purchased at market value. Furthermore, the beneficiary should ensure a financial contribution of 25% of the eligible costs, from its own funds or from external refinancing (which should not be subject to any public aid).
Minimizing the bureaucracy in order to obtain the state aid
• Another amendment under GD 628/2020 is related to the conditions to be fulfilled for the financing granted through the state aid.
Until GD 628/2020 was adopted, the financing granted through the state aid were deemed as stimulating if two conditions were fulfilled, namely:
- submission by the beneficiary, before the commencement of the investment, of a written application sent to the Ministry of Public Finance in order to grant the state aid;
and
- proving, based on a documentation, that the investment would not be profitable for the undertaking in that region or the undertaking would not have made the investment in that region, without the state aid.
GD 628/2020 simplified the procedure for granting the state aid, so that an aid is deemed to be stimulating, if the undertaking sends to the Ministry of Finance Public a written application to grant the state aid, before the commencement of the investment;
• In regards to the documentation accompanying the application to grant the state aid, the new regulation simplifies the procedure provided under GD 807/2014, by giving to the beneficiary the possibility to submit the trade registry certificate issued by the trade registry no more than 10 working days before the registration of the application, either in original or in electronic form, obtained on the service portal of the National Trade Registry Office – RECOM online;
• In order to make the payment of the state aid, the beneficiary sends to the Ministry of Public Finance the application for payment of the state aid and the settlement form, accompanied by supporting documents, according to the Payment guidelines, which is to be prepared;
• The removal of the annual deadline for submission of the application for payment of the state aid set on 30 September, as well as of the obligation of the beneficiary to submit a notice for reallocating the amounts unused until the end of the current year, in case the application is not submitted until 30 September ;
• The form of the application for funding agreement and the manner of submission and registration of the supporting documents provided under GD 807/2014 are provided in the Applicant’s Guidelines;
Amendment of the provisions on the economic sectors exempted from the applicability of GD 807/2014
• GD 628/2020 clarifies the economic sectors exempted from the application of the provisions of GD 807/2014, meaning that they do not apply to the primary agricultural production;
• It repeals Annex no. 1 to GD 807/2014 with the list of industries exempted from state aid (including the real estate buildings and transactions).
Amendment of the qualifying criteria
• Before the entry into force of GD 628/2020, one of the qualifying criteria which should be fulfilled by the beneficiary in order to benefit from state aid based on GD 807/2014 was a turnover above zero, in the last financial year concluded. The new regulation sets forth that the beneficiary is eligible if it achieves a turnover above zero in the last three financial years.
• The qualifying criteria of the investments remain unchanged (i.e. to be deemed initial investments, to have a total value, without VAT, of RON 4.5 million, i.e. the equivalent of approximately EUR 1 million, to prove the economic efficiency and viability for the implementation period of the 5-year investment, to fulfill the conditions regarding the stimulating effect, to meet the quantity and quality indicators, to generate contributions to the regional development and to have a multiplying effect in the economy).
Extension of the period to maintain the investment
• The beneficiaries of the state aid have the possibility to request the extension of the minimum 5-year period for maintaining the investment in an operational condition by a period of maximum 2 years, established after the analysis and approval by the Ministry of Public Finance of the plan to recover the additional time difference determined only by the effects of the Covid-19 pandemic, provided by the beneficiary;
• The application may be sent to the Ministry of Public Finance until 31 December 2021.
Standardization of the legal deadlines provided under GD 807/2014, for both the Ministry of Public Finance and the beneficiary
• The application for funding agreement, along with the supporting documents will be verified and solved by the Ministry of Public Finance within 30 working days from its registration with the Ministry of Public Finance;
• If following the analysis, the Ministry of Public Finance ascertains the need for the beneficiary to provide additional documents and information, in accordance with the provisions of GD 807/2014, such will be verified within 30 working days calculated from the date of registration with the Ministry of Public Finance;
• The Beneficiary has the obligation to provide the Ministry of Public Finance with the additional documents and information requested, within 30 working days from the receipt of the request.
Increase of the deadline for the beneficiary to commence the investment
• The deadline provided under GD 807/2014 for commencing the investment for which the beneficiary requested funding is increased from 4 months to 6 months, calculated from the date of issuance of the funding agreement.
Establishment of a deadline to analyze the application for payment
• The application for payment, accompanied by the supporting documents will be verified and solved by the Ministry of Public Finance within 30 working days from its registration with the Ministry of Public Finance;
• If following the analysis, the Ministry of Public Finance ascertains the need for the beneficiary to provide additional documents and information, in accordance with the provisions of GD 807/2014, such will be verified within 30 working days calculated from the date of registration with the Ministry of Public Finance.
Amendments regarding the actual payment of the state aid
• Pursuant to the new regulation, for making the payment of the state aid by the Ministry of Public Finance, it is set forth as a condition that the beneficiary should not have outstanding debts to the budget forming the general consolidated budget;
• The actual payment of the state aid by the Ministry of Public Finance will be made within maximum 15 working days from the date when the application for payment of the state aid is deemed to be complete and the on-site verification was performed;
• The undue amounts collected are repaid according to the provisions regulating certain financial measures in the budgetary field.
Settlement of the applications to amend the implementation calendar of the investment
• It is set forth that the Ministry of Public Finance has the possibility to request additional information for solving the applications to amend the implementation calendar of the investment, with the obligation of the beneficiary to provide the additional documentation within 10 working days from the receipt of the request.
Amendments on the revocation of the funding agreement
• As opposed to the previous regulation, as a result of the amendments made, the sanction of revoking the funding agreement also occurs in the following cases:
- the beneficiary informs the Ministry of Public Finance that it is in the impossibility to perform the investment or requests the revocation of the funding agreement;
- the Ministry of Public Finance ascertains after the issuance of the funding agreement that the investment was commenced before the submission of the application for funding agreement;
- the beneficiary fails to prove the existence of the funding source within 6 months from the issuance of the funding agreement;
- the beneficiary fails to prove the existence of a real right over the place of the investment, within 6 months from the issuance of the funding agreement.
• The amount of the contribution to regional development is established, which the beneficiary is bound to make, in an amount equal to the state aid paid in full.
The Ministry of Public Finance shall issue guidelines for the application of GD 807/2014 within 30 days from the entry into force of GD 628/2020.
