Important legislative changes! According to Ordinance no. 16/2022 for the amendment and completion of Law no. 227/2015 regarding the Fiscal Code, no less than 8 changes were made to the income tax. Also, there have been changes regarding the Social Insurance Contribution (CAS) and the Social Health Insurance Contribution (CASS).

Below we present the main provisions of this normative act:

Income tax

1. Individuals are no longer exempt from income tax for income earned as a result of carrying out activities on the basis of CIM with Romanian legal entities that carry out seasonal activities specific to HoReCA domains.

Date of entry into force: 01.01.2023.

2. New provisions regarding the calculation of turnover for the application of fiscal facilities in the construction sector.

Date of entry into force: 18.07.2022.

3. The income tax exemption for the construction sector no longer applies for income of up to 30,000 lei, but up to 10,000 lei inclusive. The part of the gross monthly income that exceeds 10,000 lei no longer benefits from tax facilities (applies starting with the income related to the month of August 2022).

Date of entry into force: starting with the income of August 2022.

4. New provisions regarding the calculation of turnover for the application of fiscal facilities in the agricultural and food production sector.

Date of entry into force: 18.07.2022.

5. Income tax exemption for the agricultural sector and prod. maintenance no longer applies for incomes up to 30,000 lei, but up to 10,000 lei inclusive. The part of the gross monthly income that exceeds 10,000 lei no longer benefits from tax benefits.
The condition regarding the minimum gross employment salary for 8 hours of work/day of at least 3,000 lei per month is maintained.

Date of entry into force: starting with the income of August 2022.

6. Income from wages, additional benefits received by employees based on the mobility clause according to the law, other than the additional benefits received by mobile workers provided for in Government Decision no. 38/2008 regarding the organization of the working time of people who carry out mobile road transport activities, for the part that exceeds 2.5 times the legal level established for the delegation/posting allowance, by decision of the Government, for the staff of public authorities and institutions.

Date of entry into force: starting with the income of January 2023.

7. The following accumulated monthly income does not represent taxable income in the sense of income tax, within the limit of the monthly ceiling of no more than 33% of the basic salary corresponding to the job held:

a) the additional benefits received by employees based on the mobility clause according to the law, other than those provided for in article 76 paragraph 2 letter k, within the limit of 2.5 times the legal level established for the delegation/secondment allowance, by Government decision, for the staff of public authorities and institutions;

b) the value of the food provided by the employer for its own employees, natural persons who earn income from wages or similar to wages, in other situations than when, according to the relevant legislation, it is prohibited to bring food into the premises, as provided for in the employment contract or in the internal regulations, within the limit of the maximum value, according to the law, of a meal ticket/person/day, provided for on the date of award, in accordance with the legislation in force.

c) accommodation and the value of the rent for accommodation/living spaces made available by employers to their own employees, natural persons who earn income from wages or similar to wages, as provided for in the employment contract or in the internal regulations, within the limit of a ceiling non-taxable of 20% of the gross minimum basic salary per country guaranteed in payment/month/person, under the following conditions:
(i) the employee, his/her spouse do not own a home in personal ownership or use in the locality where they work;
(ii) the accommodation/living space is in its own units, including hotel type or in a building rented for this purpose from a third party, by the employer;
(iii) the rental contract between the employer and a third party is concluded in accordance with the law;
(iv) the non-taxable ceiling is granted to one of the spouses, if both spouses work in the same locality, with the same employer or with different employers, based on their own declaration. When determining the ceiling of 20% of the gross minimum basic salary per country guaranteed in payment, the lowest value of the gross minimum salary per country, in force in the month for which the advantages are granted, is taken into account. Verification of the fulfillment of the conditions is carried out on the basis of supporting documents and is the responsibility of the employer;

d) the consideration of tourist and/or treatment services, including transport, during the leave period, for own employees and their family members, granted by the employer, as provided for in the employment contract, the internal regulations, or received on the basis of certain laws special and/or financed from the budget, within the limit of an annual ceiling, for each employee, representing the level of an average gross salary used to base the state social insurance budget for the year in which they were granted;

e) contributions to a voluntary pension fund according to Law no. 204/2006, with subsequent amendments and additions, and those representing contributions to optional pension schemes, qualified as such in accordance with the legislation on optional pensions by the Financial Supervisory Authority, administered by authorized entities established in member states of the European Union or belonging to European Economic Area, borne by the employer for its own employees, within the limit of 400 euros per year for each person;

f) voluntary health insurance premiums, as well as medical services provided in the form of a subscription, borne by the employer for its own employees, so that the annual equivalent in lei of 400 euros for each person is not exceeded;

g) the sums granted to employees carrying out telework activities to support utility expenses at the place where the employees work, such as electricity, heating, water and data subscriptions, and the purchase of furniture and office equipment, within the limits established by employer through the employment contract or the internal regulation, within the limit of a monthly ceiling of 400 lei corresponding to the number of days of the month in which the natural person carries out telework activity. The amounts are granted without the need to present supporting documents.

The order in which the above-mentioned incomes are included in the monthly ceiling of no more than 33% of the basic salary corresponding to the job held is established by the employer.

Date of entry into force: starting with the income of January 2023.

8. Personal deduction

(1) Individuals have the right to deduct from the monthly net income from wages an amount in the form of a personal deduction, granted for each month of the taxable period only for income from wages at the place where the basic function is located.

(2) The personal deduction includes the basic personal deduction and the additional personal deduction and is granted within the limit of the monthly taxable income achieved.

(3) The basic personal deduction is granted for natural persons who have a gross monthly income of up to 2,000 lei above the level of the gross minimum basic salary per country guaranteed in payment approved by Government decision, in force in the month of income realization . In the event that, during the same month, several values of the gross minimum wage per country are used, the lowest value of the gross minimum wage per country is taken into account.

(4) The additional personal deduction is granted as follows:
a) 15% of the minimum gross basic salary per country guaranteed in payment for natural persons up to the age of 26, who earn income from salaries whose level is up to the level provided for in paragraph. (3);
b) 100 lei per month for each child up to the age of 18, if he is enrolled in an educational institution, to the parent who earns income from wages, regardless of their level.

Date of entry into force: starting with the revenues related to January 2023.

Social insurance contribution (CAS)

1. For natural persons who earn income from wages and wages assimilated to wages on the basis of individual employment contracts concluded with employers who carry out activities in the construction sector and fall under the conditions provided for in art. 60 point 5, the social insurance contribution rate is reduced by 3.75 percentage points. The provision applies until December 31, 2028.

Date of entry into force: starting with the revenues related to January 2023.

2. For natural persons who earn income from salaries and salary-related income based on individual employment contracts concluded with employers who carry out activities in the agricultural sector and in the food industry and fall under the conditions provided for in art. 60 point 7, the social insurance contribution rate is reduced by 3.75 percentage points. The provision applies until December 31, 2028.

Date of entry into force: starting with the revenues related to January 2023.

3. The following incomes accumulated monthly within the limit of the monthly ceiling of no more than 33% of the basic salary corresponding to the job held are not included in the CAS tax base:
(same as income tax)

4. Special provisions for part-time CIM

The social security contribution owed by natural persons who obtain income from wages or wages assimilated to wages, based on an individual full-time or part-time employment contract, cannot be lower than the level of the social security contribution calculated by applying the CAS rate on the minimum gross basic salary per country in force in the month for which the social insurance contribution is due, corresponding to the number of working days in the month in which the contract was active.

Date of entry into force: It applies starting with the income related to the month of August 2022.

Social health insurance contribution (CASS)

1. Changes regarding the persons exempted from paying the contribution:

a) children up to the age of 18, young people from the age of 18 to the age of 26, if they are students, including high school graduates, until the beginning of the academic year, but no more than 3 months after the end of their studies, apprentices or students, doctoral students who carry out teaching activities, according to the doctoral study contract, within the limit of 4-6 conventional teaching hours per week, as well as people who follow the individual training module, based on their request, to become soldiers or graduates professionals. If he achieves income from those provided for in art. 155 para. (1) lit. a), b) and f) (salaries, independent, agricultural activities), for these incomes they owe a contribution, according to the specific rules of this title;

Date of entry into force: starting with the revenues related to the year 2023.

b) young people up to the age of 26 who come from the child protection system. If he achieves income from those provided for in art. 155 para. (1) lit. a), b) and f), for these revenues they owe a contribution, according to the specific rules of this title;

Date of entry into force: a and b- starting with 18.07.2022.

r) natural persons for the income from wages and wages similar to wages obtained on the basis of individual employment contracts concluded with employers who carry out activities in the construction sector and fall under the conditions provided for in art. 60 point 5. The provision applies until December 31, 2028 inclusive;

s) natural persons who obtain income from salaries and assimilated to the salaries made in the base individual employment contracts concluded with employers who carry out activities in the agricultural sector and in the food industry and which fall under the conditions provided for in art. 60 points 7.

The provision applies until December 31, 2028 inclusive.

Date of entry into force: r and s – starting with the income related to January 2023.

In order to be able to understand more clearly the changes that were made to the Fiscal Code by Ordinance 16 of July 15, 2022, you can consult HERE a comparative table showing the provisions of the Fiscal Code in force before and after the changes made by Ordinance no.16.