During March 2024, there were published updates regarding the reference social indicator and the consumer price index, the rules for applying the pension law, changes regarding the value added tax, the new deadline for the E-invoice and clarifications on related enterprises.
I. Increase of the Social Reference Indicator
Starting from March 1 of each year, the value of the reference social indicator (ISR) is automatically increased, with the average annual rate of inflation from the previous year. The inflation rate for 2023 is 10.4%. Thus, the value of the reference social indicator increases, from March 2024, from 598 lei to 660 lei.
After applying the new value of the reference social indicator, social assistance benefits are increased as follows:
- the minimum amount of the allowance for child rearing is increased from 1,495 lei to 1,651 lei;
- allowances for people with disabilities increase for adults from 599 lei to 662 lei for severe disability, from 449 lei to 496 for severe disability and for medium disability from 72 lei to 80 lei. And in the case of children, the benefit increases from 359 lei to 397 lei for severe disability, from 210 lei to 232 lei for severe disability and from 72 lei to 80 lei for medium disability;
- the minimum amount of the monthly accommodation allowance in case of adopting a child is increased from 2,034 lei to 2,245 lei, and the value of the support allowance from 718 lei to 793 lei;
- the non-refundable monthly aid for refugees increases from 646 lei to 714 lei;
- the minimum inclusion income (VMI): support for inclusion from 313 lei to 346 lei, respectively from 456 lei to 504 lei, in the case of the elderly over 65 years of age and support for families with children from 795 lei to 879 lei lions;
- the monthly placement allowance increases from 1,082 lei to 1,194 lei and from 1,622 lei for a disabled child to 1,791 lei. Added to this is the support allowance, which increases from 479 lei to 529 lei.
II. Decision no. 181 of February 28, 2024, for the approval of the Norms for the application of Law no. 360/2023 regarding the public pension system
Published in the Official Gazette no. 171/01.03.2024
In order to be applied, the new pension law needed a set of application rules. Thus, the Norms for the application of Law no. 360/2023 details the procedures and conditions for:
- conclusion of social insurance contracts,
- declaration of income for the determination of monthly scores for periods prior to April 1, 2001,
- establishing the contribution period in the public pension system,
- the conditions for obtaining different types of pensions.
The rules include regulations on:
Social Insurance Contracts: The rules for concluding social insurance contracts are established, including for those who do not have their domicile or residence in Romania, but are eligible according to international agreements.
Subscription period: The method of calculating the contributory contribution period and the conditions for non-contributory periods or assimilated to the contribution period are defined.
Pensions: The conditions for obtaining the old-age pension are presented, including the standard retirement ages and the minimum periods of contributory contributions required.
Equalization of retirement ages: Equalization of standard retirement ages between men and women will be achieved by 2035, with special provisions for women who have given birth and raised children.
III. Law no. 28/2024 for the modification and completion of some normative acts in the field of foreigners
Published in the Official Gazette no. 176/ 05.03.2024
It makes changes and additions regarding the regime of foreigners, their employment and posting on the territory of Romania.
Foreigners can apply for a long-stay visa for secondment within 180 days from the date of obtaining the secondment notice by the beneficiary of the provision of services, compared to 60 days previously. The visa is processed by the National Visa Centre within 20 days from the date of submission of the visa application, compared to previously deadline of 10 days.
IV. Law no. 33/2024 for the amendment and completion of Law no. 227/2015 regarding the Fiscal Code
Published in the Official Gazette no. 179/05.03.2024
Changes are being made for the transposition of the provisions regarding the value added tax (VAT) regarding the adjustment of the tax base after the delivery with price reductions, because of the decision of the Court of Justice of the European Union in the case C-717/19 Boehringer Ingelheim. Also, European Union Directive 2020/284 of the Council amending Directive 2006/112/EC for the introduction of certain obligations for payment service providers, respectively to keep records related to cross-border payments and data on beneficiaries, is transposed into national legislation payments and making them available to the tax authority to combat VAT fraud in the e-commerce sector.
By Law no. 33/2024, the following changes and additions were made to the Fiscal Code:
- Adjustment of the tax base of the value added tax
The condition regarding the adjustment of the VAT tax base for price reductions granted after the delivery of goods/provision of services directly to customers is removed. Thus, the VAT tax base will be able to be reduced even in the case of granting indirect discounts.
It is stipulated that, to reflect these types of discounts, a centralizing document will be issued to adjust the tax base for each fiscal period.
- Customs and excise duties
In the matter of excise duties and other special taxes, to ensure similar treatment to the consumption of electricity and natural gas, in the case of consumption used to maintain the capacity to transport and distribute natural gas, within the limits established by the National Regulatory Authority in the energy field, the obligation to pay excise duties does not apply.
Finally, the provisions of the Fiscal Code regarding the revocation of the certificate of consignee or certified consignor are repealed, as the procedure and conditions for resolving appeals in these situations is regulated by order of the President of the Romanian Customs Authority.
- Other changes
Law no. 33/2024 also clarifies what is the deadline for submitting declarations specific to special VAT regimes, this being the last calendar day of the month, even if it is a non-working day.
In addition, the provisions relating to the possibility of appointing an authorized fiscal representative, to fulfil VAT obligations by non-established and unregistered taxable persons for VAT purposes in Romania, are repealed, considering that these obligations can be fulfilled through the fiscal representative.
V. Order no. 355/2024 of the National Fiscal Administration Agency for the approval of the model and content of form 107 “Informative declaration regarding the beneficiaries of goods / services / sponsorships / patronage”
Published in the Official Gazette no. 205/12.03.2024
The declaration is completed and submitted by taxpayers paying profit tax, including if they owe profit tax at the level of the minimum turnover tax, who carry out sponsorships and/or acts of patronage, as well as expenses regarding goods, financial means and the services provided to the United Nations Children’s Fund — UNICEF, as well as to other international organizations that operate according to the provisions of special agreements to which Romania is a party.
The last fiscal year in which the amounts representing scholarships, remaining to be carried forward, according to the law, are deducted from the profit tax is fiscal year 2023, respectively the modified fiscal year that ends in 2024.
According to the provisions of the Fiscal Code, corporate taxpayers have the obligation to submit an informative declaration regarding the beneficiaries of goods/services/sponsorships/patronage, by the deadline for submitting the annual corporate tax return.
In this context, the new normative act approves the model and content of form 107 “Informative declaration regarding the beneficiaries of goods/services/sponsorships/patronage”, in order for the profit taxpayers to submit the declaration obligations established by law. The form is used to declare the goods/services/sponsorships/patronages granted to the beneficiaries, by the profit taxpayers, starting from January 1, 2024/the amended fiscal year starting in 2024, with the first submission deadline in 2025.
VI. Decision no. 4/2024 of the Chamber of Fiscal Consultants for the approval of the sectoral professional norms regarding the establishment of measures to prevent and combat money laundering and the financing of terrorism, specific to the activity of fiscal consultancy
Published in the Official Gazette no. 223/18.03.2024
These rules establish the measures and activities to prevent and combat money laundering and terrorist financing, which must be carried out at the sectoral level by tax consultants and tax consulting companies, entities supervised and controlled by the Chamber of Fiscal Consultants.
In application of art. 24 para. (1) from Decision no. 4/2024 of the Superior Council of the Chamber of Fiscal Consultants, the tax consulting companies which, on the date of entry into force of these rules, are registered in the Register of fiscal consultants and tax consulting companies have the obligation to notify the Chamber, within 60 days, regarding the person designated with responsibilities in the application of Law no. 129/2019, as provided for in art. 7 para. (7) of these rules.
We specify that this obligation does not apply to tax consultants, members of the Chamber, who have the status of a regulated entity.
VII. Order no. 475/2024 on the consumer price index used to update advance payments in the annual profit tax account
Published in the Official Gazette no. 248/22.03.2024
For fiscal year 2024, the consumer price index used to update annual income tax prepayments is 106%.
According to the Fiscal Code, taxpayers who apply the annual profit tax declaration and payment system, with advance payments made quarterly, determine the quarterly advance payments in the amount of one fourth of the profit tax due for the previous year, updated with the consumer price index, estimated on the occasion of the preparation of the initial budget of the year for which advance payments are made.
VIII. Emergency ordinance no. 25 of March 21, 2024 for the amendment and completion of some normative acts in the field of foreigners and the border
Published in the Official Gazette no. 250/22.03.2024
It updates the provisions contained in the legislation regarding the regime of foreigners in Romania, in terms of granting/extending the validity of visas.
New rules for employers:
- The employer has the obligation to conclude the individual employment contract within 15 working days from the foreigner’s entry into Romania, or, as the case may be, from obtaining the new employment permit.
- The employer must have actually carried out activity in the field of activity for which he is requesting the employment permit for at least one year.
- The host entities are obliged to inform the territorial formation of the General Inspectorate for Immigration regarding the termination or suspension of the legal relationship with the foreigner, within 5 working days from the date of occurrence of the event.
IX. Order no. 497/660/2024 of the Ministry of Finance and the Ministry of Labor and Social Solidarity regarding the establishment of the value of the indexed monthly amount that is granted in the form of nursery vouchers for the first semester of 2024
Published in the Official Gazette no. 268/28.03.2024
The value of the nursery voucher increased from 620 lei to 640 lei per month. The new value will apply starting from April, as well as for the first two months of the second semester of 2024, namely August and September.
X. Emergency Ordinance no. 30/2024 amending and supplementing Law no. 227/2015 regarding the Fiscal Code and Article LIX of Law no. 296/2023 regarding certain fiscal-budgetary measures for ensuring the long-term financial sustainability of Romania
Published in the Official Gazette no. 272/29.03.2024
Government Emergency Ordinance no. 30/2024 extends the grace period during which no fines will be applied for non-transmission of invoices in the national electronic invoicing system RO e-Invoice. Additionally, changes are introduced in the sphere of excise duties, both harmonized and non-harmonized, including the obligation to mark tobacco products intended for non-combustible inhalation.
RO e-Invoice
The grace period during which taxpayers will not be penalized for non-transmission of invoices in the national electronic invoicing system RO e-Invoice in the B2B relationship has been extended until May 31, 2024. The previous deadline was March 31, 2024.
The penalty for non-transmission of invoices in the national electronic invoicing system RO e-Invoice applies when taxpayers fail to report one or more invoices whose deadline for transmission into the national electronic invoicing system RO e-Invoice occurs during a calendar month.
Excise duties and other special taxes
For registered recipients, the obligation is introduced to store the received products only in the spaces declared and authorized for the reception of excisable products, in case the option of direct delivery is not used. Failure to comply with this obligation constitutes a crime and is punishable by imprisonment from two to seven years.
An alternative procedure for using the reserve receipt report or the reserve export report, as applicable, is introduced for concluding the movements of excisable products under excise suspension arrangements in the event that the computerized system, the Excise Movement and Control System (EMCS), is not available.
Delivery of sparkling wines, fermented beverages other than beer and wines, except those for which a zero excise level is provided, intermediate products, and ethyl alcohol from fiscal warehouses or from places where they have been received by the registered recipient without the supplier holding the payment document confirming the transfer of the excise duty value related to the quantity to be invoiced to the state budget is introduced into the sphere of offenses and punishable by imprisonment from two to seven years, similar to the case of energy products.
As of May 20, 2024, the regime of marking with fiscal stamps of products containing non-combustible inhalation tobacco, similar to that applied to processed tobacco products, comes into effect. The request for stamps is made by non-harmonized excise duty payers for such products by submitting an application to the competent customs authority.
XI. Emergency Ordinance no. 31/2024 regarding the regulation of certain fiscal-budgetary measures and amending and supplementing certain normative acts
Published in the Official Gazette no. 274/29.03.2024
The definition of related enterprises is modified, such that a Romanian legal entity is related to another person if any of the following relationships exist:
- The microenterprise is considered related to a subsidiary company that it directly and/or indirectly owns over 25%, or where it has the right to appoint or revoke the administrator/majority of the members of the board of directors, management, or supervision;
- The microenterprise is considered related to a parent company that directly and/or indirectly owns over 25%, or has the right to appoint or revoke the administrator/majority of the members of the board of directors, management, or supervision;
- Two companies are jointly owned by the same shareholder – whether they are a natural person or a legal entity, directly and/or indirectly owning at least 25%, or when this person has the right to appoint or revoke the administrator/majority of the members of the board of directors, management, or supervision in both companies;
- The associate of the microenterprise, who directly and/or indirectly owns over 25% of the value/number of shares or voting rights of this Romanian legal entity, also engages in economic activity organized in one of the forms taxed as income from independent activities, e.g., Sole Proprietorship (PFA), Individual Enterprise (II), etc.
Thus, to decide whether a company meets the conditions to continue applying the microenterprise taxation regime in 2024, it will verify the fulfillment of the conditions provided in Article 47 of the Fiscal Code as of December 31, 2023, including whether, as of December 31, 2023, the total revenues level, combined with those of its related enterprises, is below the threshold of EUR 500,000.
Furthermore, throughout the year, a microenterprise will need to constantly verify that it does not exceed the threshold of EUR 500,000 in total revenues, taking into account the revenues of its related enterprises, and will switch to the corporate income tax regime starting from the quarter in which it exceeds this threshold (calculated together with the revenues of related enterprises).
If a microenterprise is related to a form of organization for independent activities (e.g., Sole Proprietorship), it must cumulate its revenues throughout the year with one-quarter of the annual income standard established/adjusted/reduced for the current fiscal year for individual authorized persons/individual enterprises/family enterprises/other forms of organization of economic activities without legal personality, authorized according to the laws in force, in order to verify compliance with the income ceiling of EUR 500,000.
Romanian legal entities communicate to the competent tax authorities the application of the taxation system for microenterprises’ income until March 31 inclusive of the year for which the tax for microenterprise income is paid.
For the year 2024, these obligations will be fulfilled until April 15, 2024, inclusive.
Contact:
