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Tax Code changes impact on employees

As it was already announced, starting with the year 2016, the Tax Code will have some changes. Some of them have a direct impact on employees. An amendment provides that the tickets gift in the value of maximum of 150 lei, will no longer be taxed starting with 2016. Another change is linked to the personal deductions.

Regarding the amendment about the gift tickets, nowadays, in accordance with the tax code (Article 55, paragraph 4, letter a), only the gifts consisting in money or in goods offered by employers for the benefit of the minor children of the employees, on the occasion of Easter, the 1st of June, Christmas and other similar holidays of other religious denominations and also the presents offered to female employees for 8 of March are non-taxable, to the extent that the value of the gift offered to every person on every occasion from the above, will not exceed 150 lei. In children case, the ceiling set will apply for every minor child of each employee. Thereby, on the establishment of the tax on income from wages will be taken into account these benefits which are covered by the income of the montly gross salaries, advantages that will be taxd up to 16%.

Expenditures on gifts in cash and in kind are placed in the category of social expenditure, which are tax deductible in the calculation of the tax on profit within the limit of the A quota of up to 2% applied on the amount of expenditure with the staff wages. 

Beginning with 2016, this dimension increases to 5%. Thereby, it will be possible to deduct a greater amount for these kind of purposes.

In article 76, paragraph 4, letter a, of the new Tax Code, gifts including gift vouchers, offered by employers to their employees, as well as those offered for the benefit of the minor children, on the occasion of Easter, 1st of June, Christmas and similar holidays of other religious denomiations and gifts, including gift vouchers, for female employees offered for 8 of March are non-taxable, to the extent that their value for each person in part, on each occasion from the above, shall not exceed 150 lei. If the gift tickets are granted for those special occasions, will no longer be considered salary revenues and will no longer be taxed by 16%. 

It's very important to observe and remember that these gifts offered on the situations above are non-taxable for all employees, not only for the children of employees and the rules for non-taxation on these occasions shall apply for gift vouchers as well.

As I said at the beginning of the article, personal deductions of employees will change as well.  To benefit from personal deduction, the employees must meet all the following:

  • must have the main labor contract with that employer;
  • must have a gross monthly income lower than 3.000 lei.

Personal deduction will be granted for individuals who have a gross monthly income of up to 1.500 lei:

  • for taxpayers who do not have any dependants - 300 lei;
  • for taxpayers who have one dependant - 400 lei;
  • for taxpayers who have two dependants - 500 lei;
  • for taxpayers who have three dependants - 600 lei;
  • for taxpayers who have four or more dependants - 800 lei.

For the taxpayers who have gross revenues of montly wages between 1.501 lei and 3.000 lei,  personal deductions are degressive from those above and will be determined by the order of the minister of public finance. Personal deduction will be governed by the fiscal code on Article 56. The calculation of the personal deduction was establised by joint order number 1016 of 2005.

These amendments will enter into force on 1st of January 2016.






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