November 17, 2017 Legislative Newsletter



Emergency Ordinance no. 79/2017

Emergency Ordinance no. 79/2017

Emergency Ordinance no. 79/2017, published in the Official Gazette Part I no. 885 of November 10, 2017, amending and supplementing Law no. 227/2015 regarding the Tax Code, brings the following clarifications:

Comment: This Emergency Ordinance brings major changes in the fiscal field by reducing the number of mandatory social contributions, changing their quotas and transferring the social contributions (social security contribution and health insurance contribution) from the employer to the employee.

Thus, the mandatory social contributions regulated by the new Fiscal Code are:

1. The social security contribution, owed to the Social Security State Budget (CAS) in the share of 25%, falls in the employee’s duties.
In the case of special working conditions, the employer owes a social security contribution of 4%, and in the case of special working conditions this shall be of 8%.
2. The social health insurance contribution , owed to the budget of the National Social Health Insurance Fund (CASS) in the share of 10% falls in the employee’s duties;
3. The mandatory insurance contribution for work , owed to the general budget (CAM) and consolidated in the share of 2.25%, shall be the employer’s duty (this contribution replaces the past contributions for unemployment insurance, occupational accidents and occupational diseases, the contribution for medical leaves and compensations and the Guarantee Fund).

The income tax quota is reduced from 16% to 10% for income derived from independent activities, salaries and assimilated to salaries , rental, investments, pensions, agricultural activities, forestry and fish farming, awards and other sources and is applied to the taxable income .

The personal deduction is granted to individuals who have a gross monthly income of up to 1950 lei inclusive, as follows:
– for taxpayers who have no dependent persons – 510 lei;
– for taxpayers with one dependent person – 670 lei;
– for taxpayers with two dependents – 830 lei;
– for taxpayers with three dependents – 990 lei;
– for taxpayers with four or more dependents – 1310 lei.

For taxpayers who earn monthly gross salaries ranging between 1951 and 3600 lei, personal deductions are degressive over the above. For taxpayers who earn monthly gross salaries over 3600 lei, no personal deduction is granted.

In the case of income derived from salaries and assimilated to salaries, the provisions of this Emergency Ordinance apply starting with the incomes related to January 2018.

We highlight, that apart from the above, the employers still have the obligations stipulated by the provisions of Law no. 448/2006 on the protection and promotion of the rights of disabled persons. Thus, public authorities and institutions, legal entities, public or private, having at least 50 employees, have the obligation to employ disabled people in a minimum of 4 % of the total number of employees. Public authorities and public institutions, legal entities, public or private, who do not employ persons with disabilities in the above conditions, pay monthly to the state budget an amount representing the minimum basic salary per country guaranteed in payment multiplied by the number of jobs for which no disabled person was employed.

In addition to the above, this Emergency Ordinance brings amendments and supplements regarding the corporate tax, income tax on micro-enterprises and VAT.

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