Entrepreneurs in Romania must comply with a series of fiscal provisions for individuals that came into effect on January 1, 2023.
- Taxation of tips in restaurants
From January 1, 2023, restaurants, bars, and other establishments will be required to include customer tips on tax receipts for taxation at 10%. The new Law 376/2022 applies only to businesses in the restaurant and bar industries and imposes fines of RON 2,000 to 4,000 for companies that violate the new legal provisions.
- Income tax for IT employees
From January 1, 2023, the exemption from the 10% income tax for IT employees has been extended to high school graduates (with a bachelor’s degree) who are studying at accredited universities and have been hired by eligible companies for the fiscal facility.
The exemption has also been extended to IT professionals in public institutions. Software product development engineers have also been added to the list of those exempt from income tax. This profession involves designing, developing, and testing software solutions.
This measure was taken by Order no. 21813/6421/2246/4433/2022.
- Income tax on dividends
The tax on income from dividends has increased from 5% to 8% for both individual and corporate income beneficiaries, from January 1, 2023, according to Ordinance no. 16/2022. In the case of dividends distributed based on interim financial statements prepared during 2022, the dividend tax rate is 5%.
- Income tax on stock exchange transactions
Through Law no. 142/2022, the tax withheld at source for income obtained on the stock exchange by individual investors has decreased to 1% for holdings of over one year and 3% for holdings less than one year.
Losses can no longer be compensated. The goal of this change is to encourage long-term investments in the stock exchange rather than short-term speculation.
- Deductions for low-income employees
Starting January 1, 2023, according to Art. 40 of OG 16/2022, a new set of personal deductions for low-income employees (maximum of minimum wage plus 2,000 lei) has been introduced. Employees who earn the minimum gross wage and do not have dependents are entitled to a 20% personal deduction as a percentage of the minimum wage when calculating the tax base. If the employee has at least four dependents, they are entitled to a 45% personal deduction as a percentage of the minimum wage.
Employees who have a gross salary equivalent to the minimum wage plus 2,000 lei and have at least four dependents been also entitled to a 25% personal deduction as a percentage of the minimum wage. A supplementary personal deduction of 15% of the guaranteed minimum gross national base salary is granted to individuals under the age of 26 who earn salaries equivalent to the minimum wage plus 2,000 lei at most.
- The minimum wage has increased
The minimum gross wage in Romania for 2023 is 3,000 lei. After tax exemptions, employees over the age of 26 without dependents will receive a net salary of 1,898 lei, while the company will pay a total salary of 3,063 lei. Employees under 26 with no dependents will receive 1,943 lei net. Employees with dependents may receive additional deductions. The minimum salary cost for companies has increased by 9.1%.
- The minimum wage in construction companies has increased
From January 1, 2023, the minimum wage for construction companies in Romania has increased to 4,000 lei gross per month. This will result in an increase in salary costs of over 33% for construction companies compared to the previous year.
Employees in this sector will receive a net salary of 3,150 lei and the company will pay a total salary of 4,013 lei per month. Tax exemptions for salaries and income equivalent to salaries up to 30,000 lei per month will continue to be applied in the construction sector according to OUG 114/2018.
- The minimum wage in agri-food sector
The minimum wage in the agri-food sector will not change in 2023 for workers who were exempt from taxes in June 2022. For employees in this sector who are not exempt from taxes, at a minimum gross wage of 3,000 lei, they will receive a net salary of 2,362 lei in hand and the employer will pay a total salary cost of 3,068 lei. The tax exemptions for salaries and salary-equivalent income up to 30,000 lei continue to apply to workers in this sector.
- Income tax from rentals
Starting in 2023, owners in Romania who receive income from renting out properties that are not used for tourist purposes will have to pay a 10% tax on the full value of the rent. Previously, these owners were able to deduct 40% of the tax amount.
The new tax will apply to “income from the transfer of the right to use goods, other than income from leasing and from the tourist rental of rooms in personal dwellings,” according to Article 43 of OG 16/2022. For example, a monthly rent of 1,000 lei will result in an income tax of 100 lei per month, an increase from the 60 lei per month in 2022.
- The fiscal inspection
From January 1, 2023, the central fiscal authority in Romania can issue Compliance Notifications to taxpayers/payers selected for a fiscal inspection.
The notification informs the taxpayer/payer that within 30 days of receiving it, they have the option to file or correct their fiscal declarations. If the taxpayer/payer does not remedy the identified fiscal risks within this period, they will be subject to a fiscal inspection.
The Compliance Notification model and procedure will be approved by the ANAF President. In the case of fiscal claims administered by the central fiscal authority, the selection of taxpayers/payers for a fiscal inspection action will be based on a risk level analysis.
Exceptionally, in the case of fiscal claims administered by the central fiscal authority, taxpayers/payers may also be randomly selected for a fiscal inspection.
- Legal holidays in 2023
In private companies in Romania, the legal holidays for the year fall in 2023 as follows:
- Sunday, January 1 (New Year’s Day)
- Monday, January 2 (day after New Year’s Day)
- Tuesday, January 24, Day of the Union of the Romanian Principalities
- Friday, April 14, Good Friday
- Sunday, April 16, 2023, Orthodox Easter
- Monday, April 17, 2023, second day of Easter
- Monday, May 1, Labor Day
- Thursday, June 1, Children’s Day
- Sunday, June 4, Pentecost
- Monday, June 5, second day of Pentecost
- Tuesday, August 15, Assumption of the Virgin Mary
- Thursday, November 30, Saint Andrew’s Day
- Friday, December 1, Romania’s National Day
- Monday, December 25, 2023, Christmas
- Tuesday, December 26, second day of Christmas.
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