The year 2017 brought a lot of important fiscal changes to Romania. Local TPA tax advisors on the latest amendments to the Fiscal Code and Fiscal Code Procedure and the Labour Act in Romania, and made a summary of the main changes on tax rates and tax laws in Romania with beginning of 2017
Find out more about current tax rates in Romania:
Investing in Romania 2017
1. Amendments to the Fiscal Code in Romania
A series of amendments have been made to the Fiscal Code in Romania, the most important fiscal changes include:
- the introduction of a deductibility limitation of 30% for costs representing the value of receivables assigned (starting 1 January 2018)
- a change in the annual tax on representative offices operating in Romania from EUR 4,000 to RON 18,000 (starting 1 January 2018)
- a gradual increase in excise duties on gas and diesel (starting 15 September 2017).
2. Amendments to the Fiscal Procedure Code
A series of amendments have been made to the Fiscal Procedure Code that will enter into force upon approval in law of the corresponding Romanian Government Ordinance. The most important of these amendments to the Romanian Fical Procedure Code are as follows:
- changes to and supplementation of the procedures for communication between the tax authorities and taxpayers in respect of administrative fiscal acts, procedures of foreclosure, etc.
- new rules and clarifications with respects to tax audits
- the obligation on taxpayers, where requested by the tax authorities, to submit documents in the Romanian language (failure to do so will result in the tax authorities not taking into account any documents not written in the Romanian language)
- clarifications as regards the confidentiality of information
The Ordinance also includes certain amendments that will enter into force on specific dates, such as:
- the extension of the Virtual Private Space, starting 1 January 2018
- the amendment of the procedure for the rescheduling of fiscal obligations, starting as of the date of publication of the Ordinance in the Official Gazette
3. Amendements to the Labour Code in Romania
The Romanian Government has introduced a number of amendments and additions to Law no. 53/2003 (Labour Code) through the adoption of Emergency Ordinance no. 53 of 4 August 2017 that will bring new obligations and offences for Romanian employers.
3.1 Labour Code: Undeclared Work
According to the preamble of Emergency Ordinance no. 53, the purpose of the amendments is to adapt the national legislation to meet the challenges faced by the authorities in their efforts to prevent and combat the phenomenon of undeclared work.
In view of this, the first article of the Emergency Ordinance contains a definition of the phenomenon of undeclared work, which can mean any of the following:
a) the employment of a person without the conclusion of a individual labour contract in written form by latest one day before the start of the employment
b) the employment of a person without communicating the employment status of this person to the General Register of Employees by latest one day before the start of the employment
c) the allowing of an employee to attend the workplace while his/her individual labour contract has been suspended
d) the allowing of an employee to attend the workplace outside of the working hours established under the individual part-time labour contracts
3.2 New obligations for Romanian employers
Moreover, the text of the Emergency Ordinance amends Article 16 of the Labour Code by introducing the obligation of the employer to keep a copy of individual labour contracts at the workplace where the employees in question perform their work.
Article 17 para. (5) of the Labour Code was also amended such that, in the case of changes to an individual labour contract, the corresponding contract addendum must now be concluded before the changes take place – as opposed to within 20 days of the date of the change, as was previously the case.
At the same time, the content of Article 119 of the Labour Code has been clarified and now reads: “The employer has the obligation to keep records of the daily hours worked by each employee, showing the start and end times of the work programme, and to present these records to the labour inspectors whenever required.”
3.3 Labour Inspections in Romania: Fines
Furthermore, the Emergency Ordinance changes the amounts of the fines that can be applied by the control bodies, as follows:
a) under letter (e) of Article 206, para. 1 of the Labour Code, the minimum fine of RON 10,000 applicable in the case of the employment of up to 5 persons without an individual labour contract has been abolished and replaced with a fine of RON 20,000 for the employment each identified person working without an individual labour contract
b) Article 206, para. 1 of the Labour Code also introduces new contraventions, with letters e1) – e3) and q) having the following content:
- e1) the employment of a person without the conclusion of an individual labour contract in written form, by latest one day before the start of the employment, with a fine of 20,000 lei for each identified person
- e2) the allowing of an employee to attend the workplace while his/her individual labour contract has been suspended, with a fine of 20,000 lei for each identified person
- e3) the allowing of an employee to attend the workplace outside of the working hours established under the individual part-time labour contracts, with a fine of 10,000 lei for each identified person
- q) violation of the provisions of Article 16, para. 4 (according to which the employer is obliged to keep a copy of the individual labour contracts at the workplace where the employees in question perform their work), with a fine of 10,000 lei.
After the amendments introduced by Emergency Ordinance no. 53/2017 come into force, offenders will have the option to pay only half of the amount of the fine(s) stipulated under letters e) -e3), provided payment is made within 48 hours of the date of completion of the report by the labour inspector or, where applicable, the date of communication of said report, with the labour inspector being duly obliged to state this possibility in the report.
In respect of the contraventions described in para. 1 (e) to (e2), the labour inspector may also choose to apply a supplementary penalty in the form of a cessation of activity at the place of work under investigation. In this case, the employer may resume its activity only after paying the relevant fine and only after remedying the deficiencies that led to the cessation of activity – i.e. by concluding the relevant individual labour contracts, communicating the corresponding employment statuses to the General Register of Employees and, where applicable, terminating any suspension of individual labour contracts and establishing and paying the social security contributions and income tax relating to the salary accrued by any workers during the period in which the undeclared work was performed.
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