Last updated: 27 July 2022
The procedures for granting tax incentives, benefitting the workers in the agricultural field and the food industry who have a 3,000 lei monthly minimum basic gross wage, were published early this July in the Official Journal, after the approval of the Orders of the Ministry of Public Finances no. 1525 and no. 1528 of June 29, 2022.
Just as in the case of employees in constructions, the Law no. 135 of May 13, 2022, comes with incentives but also with a 3,000 Lei gross minimum wage for the full-time workers in agriculture and food industry. For employees who have part-time employment agreements, incentives are granted only and if the basic gross earnings coming from wages are set proportionally with the base gross earnings for full time jobs, namely 8 hours / day.
Tax incentives may benefit those whose salary related incomes based on management, mandate and other contracts and whose monthly gross income is not calculated considering the minimum gross salary of 3,000 Lei for an 8-hour daily schedule, only to the extent that the gross income is at least 3,000 Lei. However, starting with January 1st, 2023, incentives are limited to revenues coming from employment agreements.
Just as employees in constructions, natural persons obtaining salaries and salary related income from working in the agricultural field and in the food industry benefit of tax incentives until the 31 of December 2028, provided that a series of cumulative conditions are met, as following:
- Their activity falls within the CAEN Codes provided for under article 60, point 7 of the Fiscal Code : • CAEN code 01: Agriculture, hunting and related services ; 011 - Growing of other non-perennial crops; 012 - Growing of perennial crops; 013 - Growing of plants for breeding; 014 – Livestock farming; 015 - Mixed farming (crop farming mixed with livestock farming); 016 - Agriculture related and postharvest activities; • CAEN code 10: Food industry;
- These activities account for at least 80% of the overall turnover.
The tax incentives are granted only for the activity carried out in Romania, including to natural persons on secondment in the Romanian territory, if the taxpayer they are seconded to acts in the agricultural field and in the food industry and meets the hereinabove conditions. Natural persons gone on secondment outside Romania do NOT qualify for tax incentives.
Tax incentives for the agricultural field and the food industry, just as in the constructions field, consist of:
- Exemption from income tax. According to the GO no. 16/2022, starting with August 1st, 2022, the tax exemption only applies to monthly gross income under 10,000 Lei, a much lower threshold than the current 30,000 lei reference in the construction field ;
- Reduction of social insurance contribution ;
- Exemption from health insurance contribution ;
- Reduction of the percentage of work insurance contribution ;
- Exemption from social insurance contributions due by employers for special working conditions.
Natural persons who are paid salaries for performing in the agricultural field and in the food industry, may opt for payment of the 3,75% contribution due to the privately managed pensions fund.
For newly incorporated employers, namely those registered to the Trade Registry starting with June 2022, the turnover accounting for the hereinabove mentioned activities is calculated cumulatively starting with the registration date and including the tax-exempt month, whereas for the employers existing on June 1st, 2022, the turnover considered is the overall turnover since the beginning of the year, or the registration date, for those incorporated between the beginning of the year and June 1st, 2022, including the tax-exempt month.
The turnover accounting for the said activities is calculated, for employers existing on January 1st of each year after June 1st, 2022, cumulatively for the corresponding period of the current year, including the tax-exempt month.
Important
When determining the turnover accounting for activities carried out in the agricultural field / food industry, qualify as incomes from the sale of products only those coming from the sale of finite products, semi-finite products, residual products, and goods resulting from own production. Incomes from the sale of products purchased to be resold do not qualify.
The turnover considered for benefitting of the tax incentives must result from a contract or order, account for activities covered by the CAEN Codes provided for the fiscal code, and may include: manpower, materials, gear, transport, equipment, endowments, as well as other ancillary activities relating to those provided for the article 60, point 7, letter a) of the Fiscal Code. The turnover includes finite production even if not invoiced.
Constructions field
When it comes to the construction field, pursuant to Order no. 1528/2022, specific activities include current and / or periodic road maintenance works, as defined by the Regulation on maintenance and repair of public roads Ind AND 554-2002.
Also, the turnover considered for benefiting of the incentives may refer to other types of specific contracts and activities aimed at this sector, such as services and supply contracts.
The GO no. 16/2022 changes the rules for calculation of the turnover in the constructions field, which means that the turnover considered, even in the case of employers that exist on January 1st, is no longer the one of the previous year, but the one of the current year, including the tax exempt month.