Last updated: 23 November 2017
The Fiscal Code was recently amended by Government Emergency Ordinance (OUG) no. 79/2017, published in the Official Journal on 10.11.2017.
Through this Ordinance, the Government has made major changes with respect to the tax and compulsory social security contributions payable for salary income. Thus, most of the social security contributions paid by employers were transferred to the employees.
The new provisions will enter into force on the 1st of January 2018 and will apply to income obtained as of this date.
Thus, the income tax applicable from the 1st of January 2018 will be reduced from 16% to 10%.
The calculation and payment of the tax due by employees will be the same, namely it will be calculated and withheld at source by the employer, who will pay the corresponding amounts directly to the State.
The amount of the deduction of maintenance costs which an employee can benefit from will increase from Lei 800 to Lei 1,310, for a maximum of 4 dependents; likewise, the maximum salary to which such deductions may be applied will increase from Lei 3,000 to Lei 3,600.
The same Ordinance transfers most of the employers’ compulsory social security contributions to the employees.
Please find below the table of the social security contributions applicable as of the 1st of January 2018:
(1) This rate includes the 3,75% rate (reduced from 5,1% as of the 1st of January 2018) corresponding to the private pension funds.
(2) As of the 1st of January 2018, for employees working in specific and special conditions, employees have to pay a CAS contribution amounting to 4%, respectively 8% of the gross income obtained by the employee. Until the 31st of December 2017, this rate is 20.8%, respectively 25.8%.
In addition, lease also note that the Government has expressed its intention to increase the guaranteed gross minimum salary at the national level from Lei 1,450 to Lei 1,900i from the 1st of January 2018.