The Government has adopted new amendments to the tax Code. Fees to be increased from 1 August 2022

There has been a lot of discussion in recent days about the proposals for amending the fiscal Code. Finally, the Government adopted their final form, through Government Ordinance 16/2022.

The normative act provides for changes with effect after January 1, 2023, but also changes with immediate application, from August 1, 2022, which will generate an overflow for many companies and negative effects for some categories of taxpayers.

Below are the main changes that will come into effect immediately, respectively on August 1, 2022.

Part-time salary surcharges

One of the fiscal changes most criticized by the business environment is the CAS and CASS taxation of part-time wages that have a value below the minimum wage in the economy at the full value of the minimum wage in the economy according to OG 16/2022.

Thus, social security contributions (CAS) and health contributions (CASS) due by individuals who earn income from salaries or assimilated to wages, under an individual employment contract full-time or part-time, they may not be lower than the CAS and CASS level calculated at the level of the minimum gross basic salary per country (i.e. 2550 lei) in force in the month for which the social security contribution is due, corresponding to the number of working days in the month in which the contract was active.

Practically, starting August, for part-time contracts, the mandatory CAS and CASS contributions will relate to the minimum gross salary per country.

If the calculated fees relative to the number of hours are lower than the CAS and CASS level calculated at the level of the minimum gross basic salary per country, the difference is borne by the employer/income payer on behalf of the employee/income beneficiary.

These provisions SHALL NOT apply to natural persons in one of the following situations:

• are students up to 26 years of age in a form of schooling;
• are apprentices, according to the law, aged up to 18 years;
• are persons with disabilities or other categories of persons who are recognized by law to be able to work less than 8 hours a day;
• have the status in retirement in the public pension system, with the exception of pensioners who benefit from service pensions under special laws/statutes, as well as those who cumulate the  pension in the public pension system with the pension established in one of the non-integrated pension systems of the public pension system;
• during the same month, earns income from salaries or assimilated to wages on the basis of two or more individual employment contracts, and the cumulative monthly basis of calculation related to them is at least equal to the minimum gross basic salary per country.

For those who earn during the same month income from salaries or assimilated to salaries on the basis of two or more contracts, the application procedure will be established by order of the Minister of Finance.

Tax exemptions for workers in construction, agriculture, food sector are also reduced.

Also from August 1, 2022, the monthly income ceiling until which employees in the agri-food and construction sector benefit from tax exemptions and reductions and contributions decreases from 30.000 lei to 10.000 lei. For the part of the gross monthly income exceeding 10.000 lei, the tax facilities no longer apply.

There are new provisions on the calculation of turnover for the application of tax incentives in the construction sector

In order to determine the share of the turnover actually realized from the construction activity in the total turnover, the indicator CA actually realized from the construction activity includes only the revenues from the activity carried out on the territory of Romania, and the total turnover indicator includes both the revenues from the activity carried out on the territory of Romania, as well as outside of Romania.
The activity carried out on the territory of Romania means the activity actually carried out in Romania for the purpose of producing products and services.
For newly established employers, respectively registered with the trade register, the turnover is calculated cumulatively from the date of registration, including the month in which the exemption applies, and for existing employers on 1 January of each year, the turnover shall be calculated cumulatively for the corresponding period of the current year, including the month in which the exemption applies. This turnover is made on a contract or order basis and covers labor, materials, machinery, transport, equipment, facilities, as well as other ancillary activities. The turnover will include the production realized and not invoiced.

These provisions shall apply within 3 days of the publication of the ordinance in the Official Gazette.