Important legislative amendments implemented by GEO 130/2021

Published in the Official Gazette no. 1202 of 18 December  2021, Emergency Ordinance no. 130 of 2021 has implemented a series of important amendments to several regulatory documents. The main such amendments are listed below.

1. Changes to the Tax Code

Non-taxable salary income

The threshold up to which no tax and no social security contributions are due for gifts in cash or in kind, including gift vouchers offered to employees and/or their minor children on  Easter, Christmas, respectively the gifts offered to employees on the the 8th of March or granted for the benefit of minor children on the 1st of June has been increased from Lei 150 to Lei 300.

This provision shall apply starting with the income for January 2022.

Gift Vouchers

Gift vouchers offered to individuals other than employees, for marketing campaigns, market research or for promotion purposes shall be excluded from the category of income from other sources.

Gift vouchers offered to employees, other than within the threshold and for the purposes specified above, shall be expressly included in the social security contributions’ computing base.

Law no. 165/2018 on granting value vouchers shall also be amended - please see the details below.

Pension Income

As of 1st January 2022, health insurance contributions shall be owed for the pension income above the amount of Lei 4,000 per month. Previously, these revenues were fully exempted from the payment of health insurance contributions.

Individuals obtaining abroad income from pensions for which the health insurance contribution is due must submit the Single Return Form, by complying with the provisions of the European legislation applicable in the field of social security, as well as according to the agreements on social security systems, signed by Romania, starting with the revenues obtained in 2022.

Social Security Contribution (CAS)

The amounts representing interest and the update with the inflation index, established based on a final court decision, including those issued regarding salaries, military pay, pensions or other social security rights, including their differences shall not be included in the monthly computing base of the social security contributions.

Health Insurance Contribution (CASS)

Where amounts representing salaries or salary differences, as established by law or final and enforceable court decisions, have been granted, these shall be broken down by relevant month and the health insurance contribution percentages applicable at that time shall be used. Health insurance contributions due pursuant to the law shall be withheld on the payment date and shall be paid by the 25th, included, of the month following the months when the relevant amounts have been paid.

VAT

As of January 1st, 2022, the lower percent of 5% shall apply to the taxation base for:

• provision of social housing, when the usable area is of maximum 120 sqm, and the value of the house is below Lei 450,000, VAT free, when the houses are provided to individuals, regardless of the number of houses purchased.
• provision of housing with a maximum usable area of 120 sqm, if the value of the house is between Lei 450,000 and Lei 700,000, VAT free, when the houses are provided to individuals. This VAT exemption shall apply to a single house sold to a single individual or jointly with other individuals.
• supply of thermal energy, after January 1, 2022, during the cold season (November-March), intended for the population, hospitals, education institutions, NGOs or social service providers.

Register of housing purchases with reduced VAT percent of 5%

The “Register of housing purchases with reduced VAT percent of 5%” shall be organized in electronic format, based on the information available in the legal documents entered by the living individuals for the purpose of transferring the ownership right of the above-mentioned houses, authenticated as of January 1, 2022. Public notaries must verify the fulfillment of the requirements related to the application of the reduced percentage and fill in the Register. The register organization procedure shall be established by the order of ANAF Chairman, until December 28th.

By the deadline of 10 days as of the Register commissioning date, the reduced VAT percent of 5% for houses with a value between Lei 450,000  and Lei 700,000, shall apply based on the buyer's affidavit, authenticated by a notary and kept by the supplier.

Facilities for early education expenses

Tax facilities related to the operation of early education institutions, managed by the taxpayer, or the amounts paid  by the taxpayer for placing the employees’ children in early education institutions shall be suspended throughout the whole 2022 year. 

During the suspension period, the expenses for the operation of nurseries and kindergartens managed by taxpayers shall be deemed social expenses with limited deductibility, according to the Tax Code, and fall under the 5% limit established for them, as applied to the value expenses with staff salaries.

 2. Law no. 241/2005 on the prevention and combating of tax evasion

As of  March 1st, 2022, the withholding or collection and non-payment of taxes and/or contributions, within maximum 60 days since the due date established by the law,  shall be deemed crimes and shall be punishable by 1 to 5 years in prison or by fine .

If during the criminal prosecution or the trial the prejudice caused is fully covered and its value does not exceed EUR 100,000, the fine sanction may be imposed. If the prejudice amounts to maximum EUR 50,000, only the fine sanction shall apply.

If the prejudice does not exceed the amount of 100,000 euros, as national currency equivalent, and during the criminal prosecution or  the trial until a final judgment is awarded, the said prejudice plus 20% of the calculation base, also adding the interest and penalties, is fully covered, the crime shall not be punishable.

The two provisions above shall not apply if the perpetrator has committed another crime established by Law no. 241/2005,  within 5 years since perpetrating the crime for which he benefited from these provisions.

 3. Law no. 165/2018 on granting value tickets

Value tickets (for instance, meal vouchers, gift vouchers, nursery vouchers, cultural vouchers) can only be issued on electronic support.

It is prohibited to give gift vouchers to categories of beneficiaries other than own employees, for the purpose of social expenses. Granting gift vouchers to other categories of beneficiaries represents a contravention and is sanctioned with a 14-point fine.

4. Emergency Ordinance no. 69/2020 amending and supplementing Law no. 227/2015 on the Fiscal Code, as well as establishing certain tax measures

With regard to the fiscal amnesty established by the Emergency Ordinance no. 69/2020, the deadline for the submission of applications of taxpayers with budget debts, shall be extended from January 31, 2022 to June 30, 2022.

5. Law no. 53/2003 on the Labor Code

The gross national minimum salary payable may be applied to an employee for a maximum period of 24 months as of the individual employment agreement signing date. After the expiry of the relevant period, during which the employee will either be qualified or not, such person shall be employed with a basic salary higher than the gross national minimum salary payable.

The above provisions shall also apply to the employee with gross national minimum salary payable, who already has an individual employment agreement signed for a period exceeding 24 months.

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