Main legislative changes introduced by Law nr. 296/2023, published in MO no. 977/27.10.2023 with impact on the business environment.
Changes effective entering into force as of November 1st, 2023
- Changes regarding the salaries of employees in the IT, construction and agro-food sectors, as follows:
- For IT employees:
- tax exemption applies only to gross salaries up to RON 10,000 (so far there is no limit). Any amount exceeding this threshold shall be taxed;
- applies exclusively to a single employment contract, where the employee has the main function;
- CAS contribution will decrease by 3.75% (and 4.75% from January 1, 2024, according to GEO 23/2022). The retained CAS will be 21.25% (and 20.25% from January 1, 2024). The employee can opt for the full payment of 25% CAS;
- For employees in the construction and agri-food sector:
- tax exemption applies, as before, only to gross salaries up to RON 10,000. Any amount exceeding this threshold shall be taxed;
- apply for only one employment contract, according to the affidavit submitted to the employer;
- CAS decreased by 3.75% continues to apply, but from January 1, 2024, a decrease of 4.75% will apply, with the possibility to opt for the full payment of 25%;
- 10% CASS exemption is eliminated as of 1 November 2023;
The exemptions apply under the law until December 31st, 2028.
Changes effective entering into force as of November 11th, 2023 (15 days after the publication of the law in the Official Gazette)
- new national system, RO e-Seal/Sigiliu, is introduced, a system based on the use of electronic devices and an IT application that allows competent authorities (e.g. National Agency for Fiscal Administration, Customs Authority Romanian) to determine potential points of diversion of road transport of goods, regardless of whether they are in transit or have as final destination an economic operator on the national territory. e-Seal is the responsibility of the drivers of the carriers. Drivers are responsible for preserving the integrity of the seals affixed. If they do not fulfill this responsibility, they can be sanctioned with fines ranging from RON 20,000 to 50,000;
- option to pay fines in half within 15 days for fines provided for in acts such as the Tax Code, the Tax Procedure Code, the Accounting Law, the Cash Register Ordinance and the Law on cash operations is eliminated;
- new rules on cash receipts and payments are introduced, as follows:
- receipts from various categories (legal entities, freelancers, etc.) have a daily ceiling of RON 1,000 (compared to 5,000 so far);
- receipts from cash and carry stores have a daily ceiling of RON 2,000 (compared to 10,000 so far);
- Payments to the same categories have a daily ceiling of RON 1,000/person, with a total of 2,000/day (previously 5,000/person, respectively 10,000/day);
- payments to cash and carry stores are limited to RON 2,000/day (before 10,000);
- advance payments for settlement have a daily ceiling of RON 1,000 (previously 5,000);
- fragmented cash receipts for invoices over RON 1,000 (before 5,000) and 2,000 for cash and carry stores (before 10,000) are prohibited;
- fragmented cash payments for invoices over RON 1,000 (before 5,000) and 2,000 for cash and carry stores (before 10,000) are prohibited;
- invoices over the ceiling of RON 1,000/ 2,000 can be paid partially in cash (up to the ceiling) and the rest through cashless instruments;
- cash receipts and payments between companies, PFA, etc. and individuals are limited to RON 5,000/day until December 31st, 2024 and RON 2,500 starting January 1st, 2025; Fragmented cash payments and receipts to/from an individual for transactions higher than these limits are prohibited. Supplies of goods and services that are made with payment in installments, under the existence of a sale-purchase contract with payment in installments, are exempt;
- cash amounts in the companies’ cashier must not exceed RON 50,000 at the end of each day, except for the amounts for salaries and other personnel rights, where it is allowed to exceed for a period of three working days. Cash amounts exceeding the ceiling of RON 50,000 shall be deposited in the bank accounts of these persons within two working days;
- operations of cash receipts and payments between individuals performed as a result of the transfer of ownership of goods or rights, the provision of services, as well as those representing the granting/repayment of loans may be performed within a daily ceiling of RON 10,000/transaction, until December 31st, 2024, and RON 5,000/transaction, from 1st of January 2025. Fragmented cash receipts and payments for transactions greater than RON 10,000, until December 31st, 2024, and RON 5,000, starting with January 1st, 2025, as well as fragmentation of a transaction greater than RON 10,000, until December 31st, 2024, and RON 5,000, starting with January 1st, 2025, are prohibited;
- failure to comply with the provisions regarding payments/receipts within the limits provided by law is sanctioned with a fine of 25% of the amount collected/paid, respectively held in the cashier, which exceeds the ceiling established by law for each type of operation, but not less than RON 500.
Changes effective entering into force as of January 1st, 2024
- taxation of micro-enterprises changes as follows:
- a rate of 1% applies to micro-enterprises with revenues of up to EUR 60,000, if they do not carry out the activities specified below;
- a rate of 3% applies to micro-enterprises which:
- have revenues exceeding EUR 60,000; or
- works in areas such as: software publishing, IT services, hotels and accommodation, restaurants, catering, bars, legal services (only for law firms with legal personality), or medical and dental assistance;
- If, in a fiscal year, a micro-enterprise exceeds the ceiling of EUR 60,000 or falls within the mentioned areas, the 3% rate will be applied starting with that quarter.
- new additional taxes are introduced for taxpayers who register a turnover of more than EUR 50,000,000, as follows:
- minimum tax of 1% on turnover:
- applies to taxpayers (excluding credit institutions and companies in the oil and gas sectors) who have a turnover over EUR 50,000,000 in the previous year;
- applies if the corporate tax is lower than the minimum tax calculated on turnover;
- taxpayers will pay corporate tax at the level of the minimum tax calculated on turnover;
- additional tax for credit institutions:
- applies to both Romanian credit institutions and Romanian branches of foreign credit institutions;
- in addition to corporate tax, they will owe a turnover tax:
- 2% for the period from 1st of January 2024 to 31st of December 2025;
- 1% from 1st of January 2026;
- tax is calculated, declared and paid quarterly, with different terms in quarter unit;
- specific tax of 0.5% on turnover for the oil and gas sector:
- applies to companies with activities in the oil and gas sectors that have a turnover over EUR 50,000,000 in the previous year;
- this specific tax is calculated, declared and paid quarterly, with different deadlines depending on the quarter;
- specific turnover tax is considered a non-deductible expense;
- meal vouchers and holiday vouchers collected by employees, regardless of the field in which they operate, are charged with 10% CAS;
- individuals who obtain income from independent activities will pay the CAS of 10% applied to an annual calculation base equal to the annual net income / gross or the annual income norm, respectively the adjusted annual income norm, but within the limit of 60 gross minimum wages per country;
- social security contribution is deducted when calculating the income tax for the income obtained by an individual and which is declared through the single declaration;
- special tax for high-value immovable and movable property has been introduced, which entails the following:
- individuals who own residential buildings in Romania, with a taxable value exceeding RON 2,500,000, calculated until December 31st of the previous fiscal year, owe a tax of 0.03% applied on the value exceeding the ceiling;
- individual and legal persons who own cars in Romania, with a purchase value exceeding RON 375,000, owe a tax of 0.3% applied on the value exceeding the ceiling. The tax is applicable for 5 years from the date of purchase;
- tax is due for the entire tax year;
- taxpayers must declare and pay tax by April 30 for buildings and by December 31st for cars;
- model of the tax return will be established by the National Agency for Fiscal Administration within 60 days from the publication of the law;
- value added tax changes:
- increase from 9% to 19% for deliveries of non-alcoholic beer and foods with added sugar (over 10g/100g product), excluding cake and biscuits;
- increase from 5% to 9% for eco/bio/high-quality food, social policy housing, renewable energy equipment and access to various recreational and sports events;
- increase from 5% to 19% for the use of certain sports facilities and transport for tourism or leisure purposes;
- VAT exemption for services (construction, rehabilitation, modernization, supply of medical equipment, appliances, devices, etc.) offered to state hospitals is eliminated, except in cases where these services are offered to non-profit entities supporting hospitals;
- transitional measures have been implemented on housing supplies for which contracts were signed by the end of 2023, but which will be completed in 2024, in order to benefit from reduced VAT rates;
- changes regarding excise duties:
- non-harmonised excise duties are introduced for various products, as follows:
- for products containing tobacco and intended for inhalation without combustion, including those used in electronic cigarettes and similar vaporisation devices;
- for liquids, with or without nicotine, for inhalation without combustion, including those used in electronic cigarettes and similar vaping devices;
- for non-burning inhalation products containing tobacco substitutes, with or without nicotine;
- for non-alcoholic beverages with added sugar, having a sugar level between 5g and 8g per 100ml;
- for non-alcoholic beverages with added sugar, having a sugar level above 8g per 100ml;
- the production, intra-Community acquisition or import of these non-harmonised excise goods requires prior notification (for non-alcoholic beverages with added sugar) or authorisation (for other products) to the competent customs authority;
- level of excise duties on alcohol, alcoholic beverages and manufactured tobacco will increase from 1st of January 2024. Between January 1st, 2024 and December 31st, 2024, the level of excise duty on alcohol and alcoholic beverages will not update according to the increase in consumer prices. Between 1st of January 2024 and 31st of March 2024, the specific excise duty for cigarettes will be RON 540,938 for every 1,000 cigarettes;
- national system regarding the electronic invoice RO e-Invoice extends to B2B relationships:
- all economic operators in Romania (regardless of VAT registration) and economic operators not established in Romania but registered for VAT purposes will have to submit invoices issued for B2B operations in the RO e-Invoice system for supplies of goods and services that have the place of delivery / provision in Romania. Exceptions are invoices for transactions exempt from VAT (according to art. 294 para. (1) letters a) and b) and para. (2) of the Tax Code) are not subject to this obligation;
- invoices must be submitted within 5 working days of issuance;
- failure to comply with the transmission obligation may result in fines ranging from RON 1,000 to 10,000, depending on the category of taxpayer;
- between 1st of January and 31st of March 2024, no sanctions will apply.
Changes effective entering into force as of June 1, 2024
- income identified by the tax authorities, the provenance of which cannot be determined, is subject to a 70% tax applied on the corrected taxable base. The tax authorities will determine the amount due as tax and any additional taxes through a tax assessment;
- for B2B transactions between taxable entities in Romania, only invoices submitted through the RO e-Invoice system are recognized as valid. If recipients – taxable entities in Romania – receive and register invoices sent in a manner other than through the RO e-Invoice system, they will be sanctioned with a fine equivalent to the VAT noted on that invoice;
- in the context of B2G transactions, if a recipient who makes payments from his own budget relies on invoices not registered in the RO e-Invoice system, he will be penalized with a fine between RON 500 and 1,000. The amount will then have to be recovered. These amounts, considered as damages or illegitimate payments from public funds, will be reimbursed together with interest, late payment penalties or other increases, according to the regulations for budget revenue, for the period between the moment of damage and the moment of recovery.
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