Tax Changes Taking Effect from January 1st, 2024 – Legislative Newsletter

tax changes

 

  • 115/2023 Emergency Ordinance 

Emergency ordinance no. 115 published in MO no. 1139 of 15.12.2023 regarding some fiscal budgetary measures in the field of public expenditures, for fiscal consolidation, combating fiscal evasion, for the modification and completion of some normative acts, as well as for the extension of some deadlines, makes the following statements:

Comment:  This Emergency ordinance regulates a series of changes applicable to the budgetary sector, among which:

  • Increasing the salaries of budget workers by 5% from January 1, 2024, with the exception of education personnel who will benefit from an average salary increase of 20% in 2024, granted in two installments;
  • Maintaining increases, allowances, compensations, premiums and other elements of the salary system at the level of the amount granted for December 2023;
  • Additional work, work performed on weekly rest days, bank holidays and other days when work is not carried out according to the law will be compensated only with appropriate free time;
  • The occupation of vacant or temporarily vacant positions by competition or examination is suspended, with certain exceptions;
  • In the year 2024, public institutions and authorities will not grant vouchers to their staff, with the exception of nursery vouchers, regulated by Law no. 165/2018 regarding the granting of securities, with subsequent amendments and additions. At the same time, by way of exception, meal vouchers can be granted, value capped at the level of December 2022;
  • Staff who hold the title of doctor will benefit from an allowance for the scientific title of doctor amounting to 50% of the gross minimum basic salary for the country guaranteed in payment, which is granted monthly only if they carry out their activity in the field for which they hold the title and if the job description provides a set of objective and quantifiable responsabilities that allow the monthly verification of the way in which their is activity is additionally capitalized;

The Emergency ordinance also brings a series of changes to Law 227/2015 on the Fiscal Code, among which we mention:

  • Important changes to Art. 25 – Expenses for determining the fiscal result;
  • According to art. 60 a new article is introduced, art. 601 which clarifies how the tax facilities are granted in the case of IT, construction and agriculture/food industry, as follows: “in the situation where, during the same month, the natural person earns income from wages and wages assimilated to wages for a fraction of the month, for their basic job, at one or, as the case may be, at several successive employers, for the application of the exemption, each employer establishes the value from the capped amount of 10,000 lei per month corresponding to this period and grants the exemption for the monthly gross income achieved, within the fraction of the capped amount thus established .”
  • Clarifications are brought regarding the determination of the capped amount of 3 basic salaries for delegation, secondment allowances, the additional benefits received by mobile workers provided for in Government Decision no. 38/2008 regarding the organization of the working time of people who carry out mobile road transport activities, so that “the capped amount related to the value of 3 salaries/remunerations is calculated separately for each individual month, by relating the 3 salaries to the number of working days in the month respectively, and the result is multiplied by the number of days corresponding to each month of the period of delegation/secondment/performance of the activity in another locality, be it in the country or abroad”.
  • Starting with the income related to the month of January 2024, the telecommuting allowance in the amount of a maximum of 400 lei/month is removed from the category of income exempt from paying tax and social contributions;
  • The monetary value of subscriptions for sports facilities borne by the employer for its own employees is exempted from income tax and social contributions within the limit of the equivalent in lei of 100 euros per year for each person. This amount is non-taxable income for the employee if, accumulated with other incomes, does not exceed 33% of the basic salary.

The limit of 100 euros per year also applies in the case of deducting from the gross income, in view of determining the taxable income, the value of the sports subscriptions borne by the employees for services provided to the employee and/or the persons in his care;

  • The amounts borne by the employer for the placement of the children of its own employees in early education units are exempted from the payment of income tax and social contributions within the limit of 1500 lei/month/child, provided that they fall within the monthly capped amount of no more than 33% of the basic salary.

The amount is granted to a single parent, from a single employer, based on a declaration on their own responsibility that they do not benefit from such amounts from another employer;

  • Clarifications are made regarding the month in which the sums borne by the employer representing per diems, the value of tourist and/or treatment services, contributions to an optional pension fund, voluntary health insurance premiums, medical services provided in the form of a subscription are considered income, the cost of sports facilities, etc.

An important change is the fact that the sick leave allowances granted according to GEO no. 158/2005 are no longer exempt from paying the 10% health insurance contribution. The monthly calculation base of the CASS is the amount of the social health insurance allowance that natural persons benefit from.

Between January and December 2024, the deduction of 200 lei from the basis for calculating social contributions continues to be applied for employees with the minimum gross basic salary for the country and whose gross monthly income does not exceed 4,000 lei.

Other regulations introduced by this Emergency ordinance concern the profit tax, the tax on the income of micro-enterprises, income from independent activities, income from the transfer of the use of goods, VAT, the e-Invoice system, etc.

 

Read also:

 

Changes for parental leave – Legislative Newsletter, October 4, 2023

 

The minimum gross basic salary per country will increase starting October 1 – Legislative Newsletter

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