The present Ordinance introduces a series of important amendments and completions to the Fiscal Code, which mainly target the following specific aspects:
Measures applicable starting with July 18th, 2022
- Tax on dividends – there are introduced clarifications and completions regarding the conditions under which the dividends paid by a Romanian legal person to another Romanian legal person are non-taxable;
- Tax incentives applicable in the construction / agricultural field / food industry – in case of the already existing employers at January 1st of each year, the tax incentives for the employees acting in the construction / agricultural field and the food industry are applicable only if the turnover’s condition is fulfilled for the current year (and not for the previous year, as it was regulated before the amendments brought by Ordinance no. 16/2022); In case of the construction field, only the income from the activities performed on the Romanian territory is reported to the total turnover, which includes both the income from the activities performed on the territory of Romania, as well as outside Romania
- Non-taxable income from personal income tax standpoint – the allowance obtained by individuals for the care of patients with oncological affections/diseases is included in the category of non-taxable income.
Measures applicable starting with August 1st, 2022
- Taxation of income from gambling activities – for the income derived from gambling activities paid starting with August 1st, 2022, the taxation will be made through withholding at source, through the application of a new tax bracket, which establishes increased tax rates for gambling income. The minimum tax rate will be of 3%, applicable on income up to 10.000 RON, while in case of income that exceeds the threshold of 66.750 RON, the tax will be computed by adding the amount of 11.650 RON to 40% of the amount that exceeds 66.750 RON.
- Excise duty – during the period between August 1st, 2022 and March 31st, 2023, the specific excise for cigarettes is of 459,386 RON/1.000 cigarettes. Also, amendments are brought to the manner in which the ad valorem excise for cigarettes is computed.
- Annex no. 1 and Annex no. 2 from Title VIII “Excise Duty and Other special Taxes” are updated with the value of excises applicable during the period 2022-2026.
Measures applicable starting with the income related to August, 2022
- Tax incentives applicable in the construction / agricultural field / the food industry – the tax incentives for these sectors are applicable only for the monthly gross salary income of up to 10.000 RON inclusively, obtained from salary and assimilated income (previous, the maximum threshold was in amount of 30.000 RON). The amounts exceeding 10.000 RON does not benefit from the tax incentives;
- Taxation on the income derived based on part-time labour agreements – for full-time or part-time labour agreements, the social security and health insurance contributions cannot be lower than the ones resulting from the application of the social security contributions rates on the amount representing the minimum gross salary. There are few exceptions applicable on certain categories of individuals (for example: students, aged up to 26 years old, in a form of schooling).
Amendments and completions applicable starting with January 1st, 2023
- Tax on dividends – the rate of tax on dividends is increased from 5% to 8% (applicable in the case of dividends income distributed starting with January 1st 2023). Also, the dividends distributed / paid by private pension funds will be subject to dividends tax.
- Microenterprise tax – the conditions regarding the applicability of the microenterprise tax regime are fundamentally modified, among others, the new conditions that need to be fulfilled in order to be able to apply the microenterprises tax regime are: the annual turnover should not exceed 500.000 EUR, the existence of at least one employee, the income derived from consultancy and management activities should not exceed 20% of total income;
- The maximum number of companies, applying the microenterprises tax regime that can be owned in a proportion of more than 25% by the same shareholder is limited to a maximum three;
- The tax rate applicable by the microenterprises will be an unique tax rate of 1%, the tax rate of 3%, currently applicable to microenterprises without employees, will be eliminated;
- The companies acting in HoReCa sector will be able to apply the microenterprise tax regime, irespectiv of fulfilment of the conditions regarding the level of annual turnover, the number of employees, as well as the other specific conditions that apply to the microenterprises tax regime;
- The tax regime applicable to microenterprises will become optional starting with January 1st, 2023, the companies being able to opt to apply this regime, subject to fulfilment of certain conditions.
- The specific tax (HoReCa field) – starting January 1st, 2023, Law no. 170/2016 on tax specific to certain activities will be repealed. Therefore, the specific tax owed by the companies acting in HoReCa filed will be completely removed from the fiscal legislation;
- Additionally, starting with January 2023, the income tax exemption applicable on the employees from the HoReCa sector, which are remunerated based on labour agreements concluded on a determined period, will be removed.
- The tax due for income derived from transfer of immovable properties from personal patrimony – the non-taxable threshold applicable in case of income from transfer of immovable properties from personal patrimony is removed. The personal income tax will be computed by application of a 3% rate in case of properties owned for less than 3 years, respectively 1% for the ones owned for more than 3 years.
- VAT – starting January 1st, 2023, for the delivery of non-alcoholic (with added sugar) falling under NC codes 2202 10 00, respectively NC 2202 99, the standard VAT rate of 19% will be applied, these products being removed from the category of goods on which the VAT reduced rate of 9% is applied;
- The VAT rate applied on the restaurant and catering services, respectively for accommodation in the hotel sector, as well as sectors with a similar function, including the rental of land arranged for camping is increased from 5% to 9%;
- The VAT reduced rate of 5% will be applied for the delivery of buildings having a value which does not exceed 600,000 RON, excluding VAT (at this moment, the threshold is 700,000 RON, excluding VAT), the other conditions remaining unchanged. Transitory measures have been introduced for sale-purchase agreements concluded before January 1st, 2023.
- Local taxes (building tax) – starting with January 1, 2023, the tax on residential buildings will be computed by applying a tax rate of at least 0.1% on the value of the building, while the tax on non-residential buildings will be computed by applying a tax rate of at least 0.5%;
- The taxable value of the buildings will be computed based on the Market Studies regarding the indicative values regarding the real estate properties in Romania, administered by the National Union of Public Notaries in Romania;
- The differences regarding the computation of the building tax depending on the natura of the building owner (natural or legal person) will be eliminated.
Amendments and completions applicable starting with the income related to January, 2023
- Income from independent activities – the threshold from which an individual who earns income from independent activities has the obligation to switch from taxation based on the income norms to taxation in the real system is reduced from 100,000 EUR to 25,000 EUR. If such threshold is exceeded, the switch to real system will be performed starting to the next year to the one during which the threshold of 25,000 EUR is exceeded.
- Tax incentives applicable in the construction / agricultural field / food industry – the tax incentives are applicable for the activity carried out in Romania, only on the basis of the individual labour agreements (previously the incentives were also applied for the amounts assimilated to salaries paid under other types of contracts).
- Income of salary nature (personal income tax and social security contributions) – the additional benefits received by the mobile workers stipulated in GD no. 38/2008 on the organization of the working time of the persons who perform mobile road transport activities are expressly provided in the category of incomes assimilated to salaries and which also fall into the base for computing of social contributions when they exceed certain limits;
- Non-taxable benefits – there are introduced six type of benefits which are non-taxable from personal income tax perspective, respectively there are not included in the computation of social security contributions, as long as their cumulated monthly value is within the limit of 33% of the basic salary corresponding to the occupied position:
- the benefits received based on the mobility clause under certain conditions and limits;
- the value of the food granted to own employees under certain conditions (among which we mention the limitation to the maximum value of a meal ticket / person / day and provided that the employee does not receive meal tickets);
- accommodation and the equivalent value of the rent under certain conditions and limits (e.g. 20% of the minimum gross salary / month / person);
- touristic or treatment services, including transportation, during the holiday under certain conditions and limits (e.g. capped annually at the value of an average gross salary for each employee);
- contributions to a facultative pension fund within an annual limit of 400 euro for each person;
- voluntary health insurance premiums and medical services provided in the form of subscription within an annual limit of 400 euro for each person;
- amounts granted to employees who carry out teleworking activities, under certain conditions, within the limit of a monthly threshold of 400 RON depending on the days worked in teleworking regime.
- Personal deductions– the system of personal deductions for determining the taxable income from salaries income is amended: the basic personal deduction (for individuals with a monthly income of up to 2,000 RON above the level of the minimum gross salary) and additional personal deduction (15% of the minimum gross basic salary for persons up to 26 years old who earn income from salaries within the limit of 2,000 RON over the minimum gross salary, respectively 100 RON per month for each minor child enrolled in a school).
- Rental income – the expenses rate of 40%, which is deducted from the gross rental income in order to determine the taxable income is eliminated. Thus, in the case of rental income, the gross income represents the taxable income.
- The computation base for the social insurance contribution – the rules on the basis for calculating the social insurance contribution due by individuals who derive income from independent activities and intellectual property rights are amended: annual ceilings of 12 or, as the case may be, 24 minimum gross salaries, depending on the level of income derived;
- The computation base for health insurance contributions – the rules for calculating the health insurance contribution due by individuals who derive income mentioned at art. 155 (1) b)-h) of the Fiscal Code (for example: independent activities, intellectual property rights, association with a legal person, rents, investments, other sources) are amended: annual ceilings of 6, 12 or, as the case may be, 24 gross minimum wages, depending on the level of realized income.
- Ordinance no. 193/2002 regarding the introduction of modern payment systems – starting with January 1st, 2023, the legal persons that carry out retail and wholesale activities, as defined by Government Ordinance no. 99/2000 on the commercialization of products and services, as well as those that carry out activities of providing services, which realize a turnover of more than 10.000 EUR, have the obligation to accept as payment method debit, credit and prepaid cards, through a POS terminal and / or other modern accepted solutions, including application which facilitate the acceptance of electronic payments.
- Government Ordinance no. 15/2022 (Official Gazette no. 716 of July 15th, 2022) – separate from the amendments and completions introduced by the Government Ordinance no. 16/2022 at the level of the Fiscal Code, through the Government Ordinance no. 15/2022 certain amendments and completions have been introduced at the level of Government Emergency Ordinance no. 77/2019 regarding the organization and exploitation of gambling, which, among other, refers to the introduction of a tax on the marketing of gambling activities, due by the gambling organizers, as well as the increase of the taxes related to the licences on the gambling activities.
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