A. NEW TAX FACILITIES APPLICABLE TO SALARY INCOME IN THE AGRICULTURAL SECTOR AND IN THE FOOD INDUSTRY
According to Law no. 135/2022, new tax facilities have been entered on income from salaries and similar income for the activity carried out in Romania, (similar to employees in the construction industry) for employees in the agricultural sector and the food industry.
The tax facilities shall apply between 1 June 2022 and 31 December 2028.
Tax facilities:
i) exemption from the income tax from salaries (10% share)
ii) reduction of the share in social security contribution (CAS) by 3.75 percentage points (from 25% to 21.25%);
iii) exemption from the payment of health insurance contribution (CASS - 10% share), the persons being insured in the health insurance system.
Conditions of application to benefit from tax facilities:
a) The company must have one of the following NACE codes:
NACE code 01: Agriculture, hunting and related service activities
- 011 – Growing of non-perennial crops;
- 012 – Growing of perennial crops;
- 013 – Plant propagation;
- 014 – Raising of other animals;
- 015 – Mixed farming;
- 016 – Support activities to agriculture and post-harvest crop activities;
NACE code 10: Food industry.
b) employers must achieve at least 80% of the turnover from activities in the agricultural sector and/or in the food industry, carried out on the territory of Romania;
c) the gross monthly income must be between RON 3,000 and RON 30,000, for working hours of 8 hours/day (the part of the gross monthly income that exceeds RON 30,000 will not benefit from tax facilities).
The facilities are to be applied according to the procedure established by Order of the Ministry of Finance, which will be issued until 17 June 2022.
B. CHANGE IN THE MINIMUM GROSS SALARY GUARANTEED IN PAYMENT FOR EMPLOYEES IN THE AGRICULTURAL SECTOR AND IN THE FOOD INDUSTRY.
Between 1 June 2022 and 31 December 2028, for the agricultural sector and in the food industry, the minimum gross basic salary per country guaranteed in payment will be at least RON 3,000 per month, without including allowances, bonuses and other additions, for normal working hours on average of 167.333 hours per month, representing an average of 17.928 RON/hour.
C. INCREASE OF MINIMUM SALARY BY RON 200 – NON-TAXABLE AMOUNT
According to Government Emergency Ordinance no. 67/2022, for the period between 1 June 2022 and 31 December 2022, the companies that voluntarily increase the gross monthly basic salary by the amount of RON 200, i.e. from RON 2,550 to RON 2,750, shall not owe income tax and mandatory social contributions for the amount of RON 200.
Tax facilities:
i) exemption from the income tax from salaries (10% share);
ii) exemption from social security contribution (CAS - 25% share);
iii) exemption from health insurance contribution (CASS - 10% share).
Conditions of application to benefit from tax facilities:
1. EMPLOYEES WITH AN EMPLOYMENT CONTRACT IN EXECUTION ON 1 JUNE 2022
a) the employee carries out the activity based on the full-time individual employment contract and holds the basic position;
b) the employee has the gross monthly basic salary amounting to RON 2,550 on 1 June, without including bonuses and other additions;
c) the employer voluntarily increases the gross monthly basic salary by the amount of RON 200, i.e. from RON 2,550 to RON 2,750.
2. NEW EMPLOYEES (the period between 1 June and 31 December 2022)
The employee has a gross monthly basic salary amounting to RON 2,750, without including bonuses and other additions.
The amount of RON 200:
- shall not be taken into account for the application of personal deductions;
- shall be granted pro rata to the period worked during a month.
D. TECHNOLOGICAL UNEMPLOYMENT: NEW FACILITIES FOR COMPANIES AFFECTED BY THE CONFLICT IN UKRAINE
Government Emergency Ordinance no. 36/2022 provides, under certain conditions, the settlement by the state of technological unemployment benefits for Romanian companies whose activity is affected by the war in Ukraine and/or international sanctions and who must apply the measure of suspension of employment contracts of employees due to the interruption or temporary reduction of the activity pursuant to art. 52(1)(c) of the Labour Code.
In order to benefit from the payment of the technological unemployment benefit by the state, a company must meet several conditions and follow a special procedure.
Conditions to benefit from settlement of technological unemployment:
a) the employer is directly or indirectly affected by the impossibility of conducting commercial transactions with economic operators in Ukraine, the Russian Federation and Belarus, as a result of the effects of the armed conflict in Ukraine and records a decrease in receipts of at least 20% related to the receipts made in January 2022 or the receipts made in the similar month of 2021, compared to the month for which the technological unemployment is requested;
or
b) the employer is subject to international sanctions or has funds or economic resources blocked by Order issued by the President of ANAF.
The technological unemployment benefit that is settled from the unemployment insurance budget:
- is 75% of the basic salary corresponding to the job occupied, but not more than 75% of the average gross earnings in the economy amounting to RON 6,095;
- is calculated and granted pro rata to the number of days in which the activity was interrupted or temporarily reduced;
- is subject to the taxation and payment of mandatory social contributions, but no insurance contribution is due for work;
- is granted until 31 December 2022.
The procedure to be followed by the employer for the settlement of the allowance
Employers shall submit by e-mail to the County Agency for Employment (AJOFM) within which they have their registered offices, in the current month for the payment of the allowance from the previous month:
- application signed and dated by the legal representative;
- affidavit stating that they were directly or indirectly affected by the impossibility of conducting commercial transactions with economic operators in Ukraine, the Russian Federation and Belarus, as a result of the effects of the armed conflict in Ukraine, to which is attached the statement of revenue and expenditure related to the month for which the allowance is requested, as well as the statement of revenue and expenditure to which the decrease is related;
or
- copy of the order to block funds or economic resources in the field of international sanctions, issued by the President of ANAF;
- list of persons to benefit from this allowance.
The Unemployment Agency will pay the technological unemployment benefits within 15 days from the submission of documents.
E. THE NATIONAL AGENCY FOR FISCAL ADMINISTRATION (ANAF) AND THE LABOUR INSPECTORATE CARRY OUT A LARGE CONTROL ACTION TO PREVENT AND COMBAT EVADING FROM DECLARATION AND TAXATION OF WORK.
In the next period, mixed teams of labour inspectors and ANAF inspectors will check companies specialised in areas such as: construction and related services, HORECA, vehicle maintenance and repair, transport, protection and guard, beauty and body care, public catering, trading, cleaning services and other relevant areas.
Are taken into account the companies that pay underdeclared salaries compared to the average per branch, that have a significant percentage of employees within the national minimum wage, have a high turnover, but a very low declared profit, benefit from significant loans from associates without income credentials or discrepancies between the information declared on the transactions made and those declared by business partners.
The controls cover both the undeclared work and underdeclared work, respectively, cases of work in which the real salary level is partially declared.
We recommend that you make sure that you comply with all your legal obligations as an employer!
The main points to be taken into account in order to ensure a good development of employment relationships:
The individual employment contract shall be concluded in writing, in Romanian, no later than the day before the start of the activity by the employee. The obligation to conclude the individual employment contract in writing and the handing over of a copy to the employee is incumbent on the employer.
Prior to the start if the activity, the individual employment contract is registered within the General Register of Employees, which is sent to the Territorial Labour Inspectorate, no later than the day before the start of the activity.
The probationary period takes place after the conclusion of the individual employment contract.
The duration of the working time:
- full time - 8 hours a day (for 5 days) and 40 hours a week;
- maximum duration - 48 hours a week, including overtime;
- the rest between two days of work cannot be less than 12 consecutive hours;
- the daily working time of 12 hours must be followed by a rest period of 24 hours.
Overtime is the work performed upon the employer’s request and with the employee’s consent, during the work week, and is compensated by paid time off in the next 90 calendar days after its completion. If that compensation by paid time off is not possible, the employer must grant a bonus of at least 75% of the basic salary, corresponding to its duration.
The weekly rest is of 48 consecutive hours, usually on Saturdays and Sundays. The weekly rest may be granted on other days, in which case it is mandatory to grant a salary bonus.
The employer must keep at the workplace the real record of the hours worked by each employee, highlighting the start and end times of the working hours.
The original staff files are kept at the employer’s registered office (they must contain the employment contract, addenda, suspension/termination decisions, job descriptions). A copy of the employment contract must also be kept at the place where the activity is carried out, if different from the employer’s registered office.
The proof of payment of the salary must be kept by the employer.
The annual scheduling of annual leave must be prepared by the employer.
The start of the collective bargaining in order to conclude the Collective Bargaining Contract, for companies with at least 21 employees.
The Internal Regulations for companies with more than 9 employees.
The files for applying the tax exemption in the IT field, in the case of companies that benefit from this facility.
The proof of fulfilment of the condition regarding the turnover achieved in the construction industry (at least 80% of the total turnover must be the turnover made from construction activities carried out on the territory of Romania), in the case of companies benefitting from the facilities in the construction industry.
The employer must communicate to county agencies for employment all job vacancies, within 5 business days from their vacancy. Also, employers must communicate the filling of the job vacancies that have been declared to the AJOFM, within 1 day from the date of their occupation, according to the law.