During January 2024, updates were published regarding the global minimum tax for multinational enterprise groups, sustainability reporting, employment classification of foreigners in Romania, and the establishment of the quota for newly admitted foreign workers in the labor market.
I. Government Decision No. 1338/2023 regarding the establishment of the quota of foreign workers newly admitted to the labour market in 2024
Published in Official Gazette No. 7/04/01/2024
The Government Decision establishes the quota of foreign workers newly admitted to the labour market in Romania for the year 2024 at 100,000. The contingent remains the same as the previous year.
II. Law No. 3/2024 for the ratification of the Agreement in the field of social security between Romania and the United States of America, signed in Bucharest on March 23, 2023
Published in Official Gazette No. 7/04/01/2024
The purpose of the agreement is to regulate relations between the two states in the field of social security, to ensure equal treatment and the export of benefits, to determine the applicable laws, and to provide for the totalization of insurance periods.
The Agreement applies to all persons who are or have been subject to the laws of one or both Contracting States, as well as to other persons whose rights derive from them. Applicable laws are determined based on each individual’s situation. If a person has worked or lived in both contracting states, the applicable laws will be determined by totalling the insurance periods. This means that periods of insurance in both countries will be considered to determine pension rights.
The pension will be granted proportionally by each state, depending on the insurance periods achieved in each pension system.
III. Government Ordinance no. 6/2024 for completing Government Ordinance no. 25/2014 regarding the employment and posting of foreigners on the territory of Romania and for the modification and completion of some normative acts regarding the regime of foreigners in Romania
Published in Official Gazette No. 69/25.01.2024
Simplifies the procedure for obtaining the employment or secondment notice through the possibility of communicating the employment or secondment notice in electronic format if the applicant has indicated the appropriate data for this purpose. The employment or secondment notice will be signed with the qualified electronic signature of the issuing territorial unit of the General Inspectorate for Immigration.
IV. Law no. 431/2023 regarding ensuring a global minimum level of taxation for multinational enterprise groups and large national groups
Published in Official Gazette No. 8/05.01.2024
The law transposes internally Directive no. 2022/2523/EU, thus instituting in Romania both an additional tax and a national additional tax for multinational enterprise groups and large national groups, which reach an annual threshold of consolidated revenues of at least 750 million euros recorded in at least two of the four financial years preceding the reference year, namely:
- The Income Inclusion Rule (IIR) – according to which a parent company of a multinational or large national enterprise group is obligated to calculate and pay its allocable share of the additional tax for the constituent entities of the group that are subject to low taxation; – applies starting from 1st January, 2024
- The Under-Taxed Profits Rule (UTPR) – according to which a constituent entity of a multinational enterprise group owes a tax that is recorded as an additional expense equal to its share of the additional tax not levied under the IIR at the level of the parent company for the constituent entities of the group that are taxed at a low level; – applies starting from 1st January, 2025
- The Qualified National Additional Tax (QDMTT) – is calculated and paid in the jurisdiction where entities are taxed at a low level (where the effective tax rate is less than 15%). – applies starting from 1st January, 2024
V. Order no. 6/2023 of the National Agency for Fiscal Administration approving the model, content, submission method, and management of form 212 “Single Declaration regarding income tax and social contributions due by individuals”
Published in Official Gazette No. 14/09.01.2024
The new model of the single declaration for individuals (form 212) has been published. The new form of declaration 212 is used by individuals to finalize taxes on income earned in 2023, as well as to estimate taxes on income estimated in 2024.
VI. Order no. 5394/2023 of the Ministry of Finance regarding the main aspects related to the preparation and submission of annual financial statements and annual accounting reports by economic operators to the territorial units of the Ministry of Finance
Published in Official Gazette No. 11/08.01.2024
In drafting the regulatory act, consideration was given to the type of accounting reporting that economic operators must prepare, namely annual financial statements or annual accounting reports.
The new Order proposes the separate reporting of the following categories of expenses:
- Expenses related to royalties; expenses related to management locations;
- Rental expenses;
- Expenses related to intellectual property rights;
- Management expenses;
- Consulting expenses;
- Similarly to interest expenses, for the mentioned expenses, it is also proposed to present separately those arising from transactions with affiliated entities.
VII. Order no. 85/2024 of the Ministry of Finance regarding the regulation of aspects related to sustainability reporting
Published in Official Gazette No. 75/26.01.2024
This order provides for the elimination of current provisions regarding the non-financial statement, which is mandatory for entities exceeding an average number of 500 employees during the financial year and is included in the management report, and introduces sustainability reporting.
The new provisions will be gradually implemented, starting with the financial year corresponding to 2024.
The new reporting will include information regarding environmental factors, social factors including human rights, and governance factors, including sustainability factors. It will be part of the management report and will need to comply with certain standards set by European authorities.
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