Newsletter 3/2020 - Current issues regarding the daily allowance treatment granted to drivers of international transport companies

References: Fiscal Code, Labor Code, Law no. 16/2017

February 4th, 2020

The purpose of this Newletter is to inform the transport companies about the possible re-qualification of the daily allowance granted to drivers who carry out international transports by the public authorities with control powers in the field, respectively the Labor Inspectorat and the National Agency for Fiscal Administration.

1. The practice of economic operators

International transport companies conclude individual employment contracts for the truck driver position and pay the employees a salary, to which is added a fixed amount for each day they are traveling as a day cover which covers all the expenses necessary for accommodation, food and of the discomfort caused. Usually, the amounts granted as a daily allowance are significantly higher than the salary.

2. Fiscal treatment of the daily allowance

According to the provisions of art. 43 of the Labor Code, the delegation represents the temporary exercise, at the disposal of the employer, by the employee, of works or tasks corresponding to the job duties outside his place of work.
The delegated employee has the right to be paid for the transport and accommodation expenses, as well the right to receive a delegation allowance, under the conditions provided by the law or the applicable collective labor contract.
According to art. 76 of the Fiscal Code that establishes the fiscal treatment of the income from the salaries and assimilated to the salaries stipulates that all the income in money and / or any kind obtained by a resident or non-resident carrying out an activity under an individual employment contract are considered as income from salaries, including allowances and any other amounts of the same nature, other than those granted to cover the expenses of transport and accommodation, received by the employees, according to the law, during the period of delegation/detachment, as the case may be, in another locality, in the country and abroad, in the interest of the service, for the part that exceeds the maximum non-taxable ceiling established as follows:
(i) in the country, 2.5 times the legal level established for the allowance, by Government decision for the staff of public authorities and institutions (currently 50 Lei / day);
(ii) abroad, 2.5 times the legal level established for the daily allowance by decision of the Government for Romanian staff sent abroad to carry out temporary missions (currently 87.5 Euro / day).
Consequently, the way of working of economic operators, as described in point 1, is formally correct.

3. Recent opinion of the Labor Inspectorate and ANAF
Following the enactment of Law no. 16/2017 transposing into national law Directives 96/71/EC and 2014/67/EC, the Labor Inspectorate excludes the truck drivers who carry out international races from the application of the provisions of art. 43 of the Labor Code.
Moreover, by making a questionable application of the provisions regarding transnational detachment, it considers that transport companies should:
- to prepare for each displacement an additional document to the individual employment contract at the time of departure, indicating the states in which it will be located,
- to register the additional document in the Revisal (General register of employees),
- to treat the employee's monthly allowance (from a fiscal and contributory point of view) as a share of the salary (unless the economic agent can justify that a part of the daily allowance had been granted to cover the expenses of food or similar cases).
The consequence of the reimbursement of the amounts paid as a daily allowance can significantly influence the activity of the transport companies subject to the controls, as the National Agency for Fiscal Administration will calculate, as already happened, for a period of five previous years (the term of fiscal prescription) for those sums, all contributions and taxes, with related penalties.
We consider this recent practice questionable, but unfortunately, the tax decision that ANAF has the right to issue constitutes an enforceable title and can be suspended by the courts only in an extraordinary procedure, in which the petitioner must prove serious errors of the fiscal entity in the content of the administrative-fiscal acts. The company that is the verification subject will still have the opportunity to challenge the imposition act.


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