April 2018, tax and business news
Business News
Modification of the Work Code: increased penalties for using employees without work contract
Law no 88/2018 modifying the Work Code brings new obligations regarding the compliance of companies with the labor legislation.
The Law defines the undeclared work as being:
the receiving to work of a person without concluding the individual labor contract in written form, at the latest on the day preceding the start of activity;
the receiving to work of a person without transmitting the individual labor contract / general ledger records of employees (REVISAL) to Work Chamber the day before beginning work at the latest.
Law no 88/2018 punishes employers with fine of 20,000 RON for each person working for it without contract of employment, but it shall not exceed the aggregate amount of 200,000 lei.
The employers which receive to work one or more persons having work contracts but without transmitting them in the general ledger records of employees (REVISAL) to the Work Chamber at the latest on the day preceding the starting day of activity, as well as employees having the work contract suspended, shall be punished with a fine of 20,000 RON for each person identified, but it shall not exceed the aggregate amount of 200,000 RON.
In the event of irregularities committed of one of the facts set out above, the work inspector also declares the cessation of the activity of that workplace.
The employer may resume the activity only after paying the fine, and only after correcting the deficiencies which have led to the cessation of activity, including the payment of the salary taxes for the period which the employee(s) run undeclared activity.
Tax news
Romanian companies are allowed again to choose to become profit tax payer
The Government recently issued a decision modifying the Fiscal Code allowing the companies to opt to become profit tax payer (as of 01.01.2018 this option was cancelled).
According to this modification, a company having the share capital over 45,000 RON and at least two full time employees can apply to become profit tax payer starting the trimester when both conditions are met cumulatively.
This option is definitive and the company cannot apply to become microenterprise anymore.
In case one of the conditions are not met anymore, the company becomes microenterprise again as of 01.01 of next year, without having the right to apply to become profit tax payer again.
Macroeconomic indicators
RON / EUR ex-rate evolution
30.12.2012: 4.4287
31.01.2013: 4.4847
31.12.2014: 4.4821
31.12.2015: 4.5245
31.12.2016: 4.4511
31.12.2017: 4.6597
31.01.2018: 4.6474
28.02.2018: 4.6564
31.03.2018: 4.6569
Inflation rate evolution
2012: 3.33 %
2013: 3.98 %
2014: 1.07 %
2015: – 0.90%
2016: – 0.54%
2017: 3.32%
Jan. 2018 / Jan. 2017: 4.32%
Feb. 2018 / Feb. 2018: 4.72%
Mar. 2018 / Mar. 2017: 4.95%
Key indicators
– VAT: 19%
– Profit tax: 16%
– Microenterprise tax: 3% / 1%
– Dividend tax: 5%
– Total salary taxes: cca 50% in addition to the negotiated net salary
– Minimum gross salary: 1,900 RON (e.g. cca 408 EUR)
– Local tax on buildings:
– residential: 0.08% – 0.2%
– business: 2% – 1.3%
– Tax deductible loan interest: 200,000 EUR + 10% of the gross profit