Suspension of authorization fees during the suspension of the activity by decision of the local authorities
By Teodora Luca, Lawyer, Mihai Catalin LUCA
On July 1, 2020, in the Official Gazette 572 was published Emergency Ordinance no. 106 of June 25, 2020 for amending and supplementing the law on electricity and natural gas no. 123/2012, as well as for the modification of some normative acts.
Although the text does not appear to cover gambling, a provision has been inserted in it which may prove of great interest to traditional gambling organizers, whose activity is suspended in the context of measures to prevent and combat the COVID epidemic. 19, since it expressly provides for the exemption of companies from the payment of authorization fees for periods in which the activity is suspended.
According to the provisions of art. iv) of the O.U.G. 106/2020:
The fees related to the gambling exploitation authorizations provided in the Government Emergency Ordinance no. 77/2009 on the organization and operation of gambling, approved with amendments and completions by Law no. 246/2010, with subsequent amendments and completions, are not due by the operators who exploit traditional games of chance during the alert state, established by Government Decision no. 394/2020 on the declaration of the state of alert and the measures applied during it to prevent and combat the effects of the COVID-19 pandemic, with subsequent amendments and completions, extended by Government Decision no. 476/2020 on the extension of the alert status on the Romanian territory and the measures applied during it to prevent and combat the effects of the COVID-19 pandemic, in which the activity carried out by them is suspended.
The state of alert instituted by H.G. 394/2020 was successively extended after the adoption of the normative act in question, by H.G. 553/2020, H.G. 668/2020 and H.G. 782/2020, the latter being in force on the date of writing this article.
Following the adoption of H.G. 782/2020, the activity of traditional gambling may be restricted by local authorities, depending on the evolution of the epidemiological situation, according to the provisions of art. 6 of Annex 3 to H.G. 668/2020, amended version:
“11. The activity with the public of the licensed economic operators in the field of gambling is allowed in the counties / municipality of Bucharest where the cumulative incidence of the cases in the last 14 days is less than or equal to 1.5/1,000 inhabitants.
12. County emergency committees in counties where the cumulative incidence of cases in the last 14 days is less than or equal to 1.5/1,000 inhabitants may decide to restrict or close in a locality in the area of competence of the activity of licensed economic operators in the field gambling, if the cumulative incidence of cases in this locality, during the mentioned period, exceeds the threshold of 1.5/1,000 inhabitants.
13. County committees for emergency situations in counties where the cumulative incidence of cases in the last 14 days is higher than 1.5 / 1,000 inhabitants may decide to resume the activity of licensed economic operators in the field of gambling, from a locality located in the area of competence , if the cumulative incidence of cases in this locality, during the mentioned period, is less than or equal to 1,5 / 1,000 inhabitants.”
Pursuant to the aforementioned legal provisions, the activity of gambling organizers has been / is temporarily suspended in the localities where the cumulative incidence exceeds the threshold of 1.5 / 1,000 inhabitants.
Obviously, during the suspension of the activity, based on the normative acts issued by the authorities, the authorization fees related to the activities affected by the sanitary protection measures are not due by the gambling organizers, meaning that the provisions of art. iv) of O.U.G 106/2020, previously cited.
Although there is no doubt that the provisions of art. iv) of the O.U.G. 106/2020 enshrines the right of the organizers not to pay the authorization fee for temporarily restricted activities / means of play, in the absence of express provisions, we consider that the exemption will be applied according to the general rules, respectively as follows:
– From the value of the authorization fees due in advance, quarterly, by the gambling organizers, the value of the fees related to the period in which the activity was not allowed will be deducted, according to the sanitary norms.
– In order to determine the amount of fees for the period in which the activity was not permitted, the amount of the monthly fee (1/3 of the value of the quarterly fee) and, subsequently, the amount of the daily authorization fee shall be calculated by dividing the monthly fee by the number average days (30).
– In order to determine the amount of the authorization fee for the period in which the activity was not allowed, the amount of the daily fee shall be multiplied by the number of days in which the operator’s activity was suspended, following the normative acts of the local authorities.
– The resulting value will be deducted from the value of the organizer’s tax obligations, to be returned to him or regularized by offsetting the claim held by the organizer with other tax obligations of the organizer.
Although a number of accusations have been made in the public space against the Government, which has been accused of providing fiscal facilities to a non-essential area, in a difficult period from a financial point of view for the entire economic environment, we appreciate that they prove a superficial analysis of constitutional provisions, worrying in the context in which most of the proponents of this theory are members of Parliament.
In reality, given that the right of gambling organizers to exploit the activity is restricted according to the decisions of central or local public authorities, this situation itself deserves to be analyzed from a constitutional perspective in a separate article, the obligation to pay the tax the operating license, which according to its very name, is due in exchange for this right, is in turn suspended.
Therefore, art.iv) of GEO 106/2020 only enshrines the constitutional principle contained in art. 56 para. 1 of the Romanian Constitution.
Unlike taxes, which are due regardless of the existence of a consideration, fees are conditional on the existence of a consideration by the public authority.
In this regard, the Constitutional Court has ruled in different directions.
Thus, by Decision no. 141 of December 14, 1994, published in the Official Gazette of Romania, Part I, no. 353 of 21 December 1994, the Court ruled that, “in principle, a tax is justified in a service of a public authority”.
In the same sense is Decision no. 176 of May 6, 2003, published in the Official Gazette of Romania, Part I, no. 400 of 9 June 2003, by which the Court held that, “in accordance with the general principles of taxation, any tax imposed on individuals or legal persons must be followed by a service or work performed directly and immediately by public institutions”. It is undeniable that, according to art. 56 para. (1) of the Constitution, the citizens have the obligation to contribute, through taxes and fees, to the public expenses, but, in accordance with the provisions of par. (2) of the same article, the legal system of taxes must ensure the fair settlement of tax burdens. In the same sense, by Decision no. 3 of January 6, 1994, published in the Official Gazette of Romania, Part I, no. 145 of 8 June 1994, the Court held that “[…] taxation must not only be lawful but also proportionate, reasonable, fair and not differentiate between taxes on the basis of groups or categories of citizens”. in which there would be an obvious disproportion between the tax due and the actual public service provided, the tax was not instituted in the respect of the consideration due by the economic operator, the public institution or the public service, which would be contrary to art. 56 para. (2) of the Constitution, according to which “The legal system of taxation must ensure the fair settlement of tax burdens” (in the same sense states the Decision of the Constitutional Court no. 1.202 of October 5, 2010, published in the Official Gazette of Romania, Part I, no. 743 of November 8, 2010).
Therefore, gambling organizers cannot be required to pay the operating license fee for the period in which the activity was restricted as a result of the decision to suspend the gambling activity.
Suspension of authorization fees during the suspension of the activity by decision of the local authorities
By Teodora Luca, Lawyer, Mihai Catalin LUCA
