The beginning of this year brings a series of legislative changes in fiscal matters, most of which are outlined in Law no. 296/2020 for amending and supplementing Law no. 227/2015 regarding the Fiscal Code. Below, I have summarized the main measures impacting the payroll process:
1. The deadline for granting the technical unemployment allowance under GEO 30/2020 and the reduced working time allowance (Kurzarbeit law) has been extended until June 30, 2021. Read more details on these topics in the following article: www.smartree.com/articol/smartree-update-oug132-prelungire-facilitati-angajati.
2. Regarding telecommuting, the Fiscal Code now allows employers to reimburse employees working remotely up to 400 lei per month without requiring supporting documents. This law stipulates that amounts granted to employees for covering utility costs at their place of work, such as electricity, heating, water, and data subscriptions, as well as for the purchase of furniture and office equipment, will not be subject to income tax, CAS, and CASS, within a monthly limit of 400 lei corresponding to the number of days the individual works remotely. This expense is deductible for profit taxpayers. Read more details on these topics in the following article: www.smartree.com/articol/smart-update-modificari-cod-fiscal-codul-muncii.
3. The coverage of costs for epidemiological testing and/or vaccination of employees to prevent the spread of the SARS-CoV-2 virus is not considered taxable income and is also exempt from social contributions. For profit taxpayers, this represents a deductible expense. We detailed this topic in a previous article, which you can access at the following link: www.smartree.com/articol/regim-fiscal-teste-covid.
4. Adoption assistance is now included in the category of non-taxable income from salaries and will not be subject to mandatory social contributions (CAS and CASS), similar to the other types of income mentioned above.
5. The amounts paid by the employer for the early education of employees’ children are not included in the monthly calculation base for social insurance contributions. This regulation came into force on November 9 and is stipulated in Law no. 239/2020. We detailed this topic in a previous article, which you can access at the following link: www.smartree.com/articol/reglementari-fiscale-cheltuieli-educatie-timpurie.
6. A new situation is introduced in the Labor Code, in article 52, where the individual employment contract can be suspended at the employer’s initiative, specifically during the temporary suspension of activity and/or its reduction due to the declaration of a state of siege or emergency according to art. 93 para. (1) of the Romanian Constitution, republished. This amendment came into force on December 27, and we detailed it in the following article: www.smartree.com/articol/smart-update-modificari-cod-fiscal-codul-muncii.
7. The fiscal regime for gift vouchers granted by a company to other categories of beneficiaries (e.g., individuals who are not employees) is clarified. These are considered income from other sources, for which only income tax (10%) is owed.
8. The fiscal regime for medical subscriptions covered by the employer is clarified. Thus, the 400-euro limit on health insurance premiums to be non-taxable is determined per person.
9. Non-taxable income includes benefits in kind granted to individuals earning salary income or similar income due to holding positions considered essential by the employer for the conduct of activity and who are in preventive isolation at the workplace or in specially designated areas where no outsiders have access for a period established by the employer and during the alert state. Previously, the article only referred to the state of siege and emergency, making it impossible to apply the exemption during this period.
10. A new provision is introduced that addresses the situation of monetary and/or in-kind benefits received from third parties as a result of the provisions of the individual employment contract, a service relationship, a secondment act, or a special status provided by law or a contractual relationship between the parties, as applicable. In this case, the obligation to calculate, withhold, pay, and declare the tax is as follows:
a) To the Romanian tax-resident employer when the monetary and/or in-kind benefits are granted by other entities than the employer, and the payment is made through the employer;
b) To the Romanian tax-resident income payers when the monetary and/or in-kind benefits are granted by entities other than the employer, except in cases where individuals earn income from salaries and similar income in Romania under employment contracts concluded with employers that do not have a registered office, permanent establishment, or representative in Romania, to which the provisions of art. 82 apply.
11. A new provision is introduced concerning the fiscal situation of taxpayers who receive monetary and/or in-kind benefits from third parties who are not Romanian tax residents. In this case, the tax is calculated, declared, and paid by the taxpayer. By exception, in the case of taxpayers who receive monetary and/or in-kind benefits from third parties who are not Romanian tax residents, the resident employer may opt to calculate, withhold, and pay the income tax due.