The procedure regarding the exemption from income tax for IT employees was modified by Order of the Ministry of Finance no. 835/2015 which replaces the old legal framework (MFP Order no. 1479/2013 – repealed). The new regulations stipulate that the employees in this sector may be exempt from income tax only if they occupy certain positions, as defined by the law.

Starting July 30, the alumni working in this sector must be in one of the eight functions, as defined in the Annex of the Order 835/2015:

• Database Administrator
• Analyst
• System Engineer in Computer Science
• Software System Engineer
• IT Project Manager
• Programmer
• Information System Designer
• Computer System Developers

In the old regulation, the provisions established that the IT employees can benefit from exemption if, besides the specific jobs, they graduated with bachelor certain specialties such as automation, mathematics, physics or chemistry informatics, cybernetics, accounting and management information systems etc.

The new regulation makes no reference to the graduate specialization, but specifies the requirement of higher education: IT employees "holds a diploma awarded after completion of a higher education long-term form or a diploma awarded after the completion of the first cycle of the collage studies, issued by an accredited higher education institution, and actually provides one of the activities listed in the Annex", according to the Order 835/2015.

But there are no changes on the rest of the conditions to be met for the IT employees to benefit from income tax exemption:

• the posts including the occupations correspond to the aforesaid;
• the post is part of a specialized compartment, highlighting in the organizational chart;
• the employer has made in the previous fiscal year and recorded separately in analytical balances as a result of a creative activity of computer programs for trading on a contract basis, an annual income of at least the equivalent of 10,000 US dollars (calculated on the average monthly exchange rate by the National Bank of Romania related to each month which saw income) for each employee who is exempt from income tax.

 

As with the previous order, the employer must have one of the CAEN codes: 5821, 5829, 6201, 6202, 6209.

Documents required for IT employees to be exempt from paying income tax

The supporting documents for IT employees not to pay income tax are defined as such in the new order and are in accordance with Law no. 571/2003 updated:

• memorandum of association, in case of commercial companies;
• organizational chart;
• job description;
• the authenticated copy of the diploma awarded after completing university studies accompanied by an authenticated copy of the transcript or, if applicable, the supplement to the diploma or the certified copy of the diploma awarded after completing the first cycle undergraduate degree, accompanied by authenticated copy of the diploma supplement or certified copy of the diploma equivalency certificate issued by the Ministry of Education and Scientific Research structures for citizens of member states of the European Union, European Economic Area and Swiss Confederation;
• authenticated copy of the individual labor contract;
• the paysheet compiled separately for employees who benefit from the exemption from tax on income from salaries, in accordance with Law no. 571/2003, with subsequent amendments;
• the builtin, approved by the authorized management staff of the employer, stating the creation of computer programs;
• the analytical balance to be reflected in revenues distinctly from creative computer programs.

These documents are kept at the employer office, in order for inspection. Meanwhile, the setting of an employee in the category of exemption from income tax is the responsibility of the employer.

The citizens of the states member of the European Union, European Economic Area and Swiss Confederation also benefit from this exemption of income tax, if their degrees are equated by the structures of the Ministry of Education and Scientific Research.

 

The income tax exemption, applicable per month only for income from salaries obtained under a labor contract is not the subject of the individual employment date or the employee contribution to achieving the minimum level of income.

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