Tax alert 19 – Order for the approval of the Norms for the application of the provisions of art. I and III of Government Emergency Ordinance no. 3/2018 on tax and budgetary measures

The implementing norms published by Order no. 1450/2018 define the competent central tax authorities and contains specifications regarding the persons to whom the provisions of art. I of GEO no. 3/2018 apply. The persons to whom these norms apply are:

  • Accentuated or severely disabilities individuals;
  • Individuals carrying out computer program creation activities;
  • Individuals pursuing research and innovation activities;
  • Individuals carrying out activities on the basis of an individual labor contract concluded for a period of 12 months, with Romanian legal persons carrying out seasonal activities.

The rules also apply to persons in the categories listed, who change their employment relationship by posting, suspending or terminating.

The rules clarify the inclusion of the amounts deducted by employers / payers in the Form 112 but also the verification of how the amount deducted by the tax authorities is based on a specific risk analysis.

Risk analysis implies:

  • Identification of taxpayers / payers, as the case may be, who have the obligation to establish, withhold and pay the social health insurance contribution according to the calculation formula: Social security contribution withheld = 2018 gross income – social security contribution due in 2018 – the net wage for December 2017;
  • To carry out a specific risk analysis (to identify the risks of non-compliance by taxpayers), including: examining how to declare, the time variation of the number of persons exempt from income tax on salaries and how to calculate the amount deducted in Form 112 ;
  • Establishing the degree and level of risk for each taxpayer under analysis and, depending on them, measures will be taken regarding the assessment, management and treatment of established risks.

As a result of the specific risk analysis, the tax authority will carry out the verification in several stages, as the case may be:

  • Notification of the taxpayers / payers concerned, in order to rectify the statements for the correct setting of the social health insurance contributions;
  • Carry out tax inspections in case of non-compliance of taxpayers.

According to the these Rules, in order to benefit from the provisions of Government Emergency Ordinance no. 3/2018, in the case of income from salaries and assimilated salaries in 2018, before the date of entry into force of the Ordinance, the employer / employee may make the adjustment by submitting an amended statement by 31 December 2018.

 

Author:

Andreea Cosmanescu – Manager, People Advisory Services

 

For additional information, please contact:

Alex Milcev, Partner – Head of Tax & Legal

Email: office@ro.ey.com



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