EY retrospective: 2023 Fiscal changes on natural persons' incomes in Romania

Characterized by many Fiscal Code changes, 2023 prefers, between “given”and “taken”, the latter category, but in 2024 the fiscal burden will be acutely felt by tax payers, since most legislative changes are going to come into force after January 1, according to EY consultants who released a retrospective about fiscal changes.   The first fiscal limitation of 2023 was adopted in the first month, when the fiscal facility for employees in constructions was restricted, so that the activity carried out outside Romania was reoved from the category of activities for which tax exemptions and reductions stipulated by law could be accessed, according to EY consultants.   However, IT fiscal faciliites were extended in January so that income tax exemptions for employees of the public system could be obtained.An important addition, which corrected a provision which could have been considered discriminatory before was the facility for IT specialists could be also accessed by non-EU citizens employed in Romania, if they met all necessary conditions. Previously, only Romanian or EU citizens were eligible.   On the other hand, the government tried to reduce the impact felt by employees in the field of constructions and food sector and increased, by emergency order, the reference value of basic monthly salaries from 4,000 to 4.583 lei for constructions and from 3,000 lei to 3,436 lei for agriculture and food industry, so that the lowest net income should not be affected by the reintroduction of compulsory payment of the health share.   So, we could say that the authorities gave with one hand a higher salary but equally took with the other hand by introducing 10% for health contribution. Finally, the additional fiscal burden was indirectly placed with employers, he source mentions. According to EY consultants, fiscal treatment changes appeared for certain benefits assimilated to salaries could be alco considered.   Referring to payment for working from home, the amounts granted to employees who worked from home were exempted from the payment of social contributions and income taxes, in the limit of a monthly level of 400 lei. The government eliminated this fiscal facility as of January 2024 by government order 115/2023.   According to the source, although there were many fiscal amendments with impact on the tax payer's pocket in 2023, the following should be pointed out: the introduction, as of 2024, a new level of 60 gross lowest salaries for which health shares are paid for independent activities and the introduction of a special tax on goods of great value, a first in the field.   The list also include the higher taxes for incomes whose source has not been odentified ( as of July 2024, from 16% to 70%, applicable to the adjusted taxable base) and significant fiscal amendments for small companies in fields like IT, HoReCa, juridical activities, medical care.   Present in Romania since 1992, EY supplies, with the aid of over 1,000 employees in Romania and Moldova, full services for audit, fiscal, juridical assistance, strategy and transactions, consulting to multinational and local companies.