A. The Ordinance 18/2018 brings changes to the income tax and social security for the persons who obtain other income than from salary.
The Ordinance implements a new declaration/reporting system, replacing the declaration 600. « The single declaration » for the reporting of the income to the National Agency for Tax Administration other than of salary nature, respectively for the declaration and payment of social security is thus implemented.
The natural persons who obtain income from economic activities or other income categories will submit to the National Agency for Tax Administration a single declaration - "Single declaration" - which includes all the necessary information on income tax and social contributions owed and it ensures the simplification of the way of determining and declaring the payment obligations. The new mechanism also allows the simplification of the way of making the payment of the income tax and social contributions.
The declarations D200, D201, D220, D221, D600, D604, D605 are eliminated by introducing the Single Declaration. The new Single Declaration makes the shift from a system where the information was provided by the taxpayers in different declarations in order to establish the income tax and the social contributions to a reporting system in which all the declarative obligations of the taxpayers are fulfilled by submitting the Single Declaration. This contains information both about the income obtained in the previous year and about the income estimated for the current year and it may be amended any time until the payment deadline.
By the new system implemented by this ordinance the shift is made from the income tax and mandatory social contributions established by the tax body to a self-taxation system in which the income tax and the mandatory social contributions for the current year are established directly by the taxpayer through the Single Declaration.
For the social contributions, the current payment obligations are determined by estimating the income to be obtained in the current year from independent activities and intellectual property rights, in case of pension contributions and in case of health contributions the income obtained from independent activities, rental and leasing, agriculture, forestry, fishery, associations with legal entities, investments and other sources are estimated for the current year.
The social security contribution represents 25% of an income chosen by the taxpayer at least equal to Lei 22,800 for 2018 (12 minimum gross basic salaries at national level).
The health contribution represents 10% of Lei 22,800 for year 2018 (12 minimum gross salaries at national level). The natural persons may choose to pay the social health benefit if they estimate that they obtain a cumulated annual net income below the threshold of Lei 22,800 (12 minimum gross salaries at national level) and/or if they do not obtain income in the current year.
The taxpayer who pays income from intellectual property rights, income from associations with legal entities and income from rent will establish, declare and pay the income tax, the social security contribution and the health insurance contribution by withholding upon payment of the income.
The withholding does not apply if the estimated income for each source of income is less than Lei 22,800 for 2018 (12 minimum gross salaries at national level).
The withholding of the income tax with final taxation is also maintained for income obtained from dividends, interests, liquidation of a legal entity, prizes and gambling and other sources.
The scope of the income from independent activities has been revised in the sense of exclusion of the income from intellectual property and its separate treatment as a standalone independent category of income for which the withholding tax method continues to apply. The withholding tax does not apply to income from intellectual property for which the beneficiary has opted for the taxation in real system.
The Single Declaration on the income tax and social contributions owed by the natural persons will NOT be submitted for the following categories of income:
• Net income determined based on standard income, except for those who have submitted the declaration set forth in art. 120;
• Income from intellectual property rights whose taxation is final according to art. 84 paragraph (8);
• Income in the form of salaries and similar income for which information is included in the specific declarations;
• Investment income whose taxation is final;
• Income from prizes and gambling whose taxation is final;
• Income from pensions;
• Income from the transfer of real estate properties from the personal patrimony;
• Income from other sources, except for those set forth in art.116.
Submission deadline
The new form will be submitted once per year.
In 2018 the declaration will be submitted by 15 July and the payment will be made until 15 March 2019.
Starting from 2019, the declaration will be submitted by 15 March including for the income estimated to be made in 2019, and the payment will be made until 15 March of the following year.
If the activity starts after 15 July 2018 and 15 March 2019, respectively, the single declaration will be submitted within 30 days from the start of the activity.
In the event of its cessation or temporary suspension, the natural person will notify the tax bodies to stop the payment obligations.
The Order introduces for 2018 the possibility of reducing the annual tax liabilities - income tax, social security contribution, health insurance contribution - by granting discounts as follows:
• 5% if the single declaration is submitted until 15 July 2018 by electronic means and the tax liabilities are fully paid until 15 March 2019;
• 5% if the tax liabilities are fully paid until 15 December 2018.
The discounts reduce the estimated paid annual tax liability. If the conditions mentioned are cumulatively fulfilled, the discount granted will be of 10%.
The income from 2017
The taxpayers natural persons who obtained in 2017 income in the country and abroad, subject to declaration and taxation in Romania, from the category of income mentioned above, will submit the single declaration until 15 July 2018.
The tax authority determines the payable taxes and it will issue the taxation decision.
The income from 2018
The taxpayers natural persons who estimate to obtain income of the nature mentioned above, which is in the scope of the single declaration, will submit this declaration until 15 July 2018. These taxpayers will calculate themselves the tax owed and will determine whether they owe social security contributions.
The natural persons who have already submitted the income declarations by forms 200 or 201 until the date of entry into force of this ordinance, for income obtained in 2017, will no longer submit the single declaration.
The natural persons who have submitted for 2018 the forms 220, 221 and 600, will submit "The single Declaration" on the income tax and social contributions until 15 July 2018 and this will replace the respective forms.
The natural persons who have not obtained income, but have concluded optional social security contracts and have submitted the Form 604 and maintain the option of being insured, do not submit the single declaration, the initial form keeping its validity.
For the following years, the persons within the scope of the single declaration will submit this declaration until 15 March for the current year in order to be insured during this year. The payment of the tax and social security contribution for the income of the previous year will be made until 15 March of the following year.
Discounts may be granted for the full payment in advance under the state budget law.
B. The Order 888/2018 approves the template and the contents of the form (212) “Single declaration on the income tax and social contributions owed by the natural persons” introduced by the Government Emergency Ordinance 18/2018.
The form is used to declare the income earned in 2017 and to declare the estimated income tax and the mandatory social contributions owed by the natural persons starting from 2018.
The declaration will be submitted by:
• The natural persons who obtain, individually or in a form of association, income/register losses in Romania or/and abroad, who owe income tax and mandatory social contributions, according to the provisions of the Tax Code;
• The natural persons who do not obtain income and who choose to pay the health insurance contribution.
The declaration will be submitted until 15 July 2018 including by the natural persons who are obliged:
• To declare the income obtained in Romania or/and abroad in 2017;
• To declare the income tax/standard income estimated to be obtained in Romania in 2018;
• To declare the estimated income for the classification as a payer of social contributions and, where appropriate, to declare the social contributions owed in the fiscal year 2018.
The declaration is submitted within 30 days from the event occurrence date in case of the taxpayers who start an activity during the fiscal year and of those who obtain income from rental and leasing of the personal patrimony other than the income from lease for which the taxation is final and who have not had the obligation to submit the single declaration until that date.
The single declaration may be rectified by the taxpayers on their own initiative whenever the current information does not correspond to that in the previously submitted declaration by submitting an amending declaration.
The amending declaration is used for:
• The correction of the income tax and of the social contributions owed by the natural persons;
• The change of the data related to the category/source of income or their level according to law;
• The change of the data related to the social security contribution and the health insurance contribution estimated for 2018;
• The correction of other information mentioned in the form.
The taxpayer may rectify the estimated income until the deadline for the payment of the tax owed, namely until 15 March of the year following the taxation year.
The Ordinance implements a new declaration/reporting system, replacing the declaration 600. « The single declaration » for the reporting of the income to the National Agency for Tax Administration other than of salary nature, respectively for the declaration and payment of social security is thus implemented.
The natural persons who obtain income from economic activities or other income categories will submit to the National Agency for Tax Administration a single declaration - "Single declaration" - which includes all the necessary information on income tax and social contributions owed and it ensures the simplification of the way of determining and declaring the payment obligations. The new mechanism also allows the simplification of the way of making the payment of the income tax and social contributions.
The declarations D200, D201, D220, D221, D600, D604, D605 are eliminated by introducing the Single Declaration. The new Single Declaration makes the shift from a system where the information was provided by the taxpayers in different declarations in order to establish the income tax and the social contributions to a reporting system in which all the declarative obligations of the taxpayers are fulfilled by submitting the Single Declaration. This contains information both about the income obtained in the previous year and about the income estimated for the current year and it may be amended any time until the payment deadline.
By the new system implemented by this ordinance the shift is made from the income tax and mandatory social contributions established by the tax body to a self-taxation system in which the income tax and the mandatory social contributions for the current year are established directly by the taxpayer through the Single Declaration.
For the social contributions, the current payment obligations are determined by estimating the income to be obtained in the current year from independent activities and intellectual property rights, in case of pension contributions and in case of health contributions the income obtained from independent activities, rental and leasing, agriculture, forestry, fishery, associations with legal entities, investments and other sources are estimated for the current year.
The social security contribution represents 25% of an income chosen by the taxpayer at least equal to Lei 22,800 for 2018 (12 minimum gross basic salaries at national level).
The health contribution represents 10% of Lei 22,800 for year 2018 (12 minimum gross salaries at national level). The natural persons may choose to pay the social health benefit if they estimate that they obtain a cumulated annual net income below the threshold of Lei 22,800 (12 minimum gross salaries at national level) and/or if they do not obtain income in the current year.
The taxpayer who pays income from intellectual property rights, income from associations with legal entities and income from rent will establish, declare and pay the income tax, the social security contribution and the health insurance contribution by withholding upon payment of the income.
The withholding does not apply if the estimated income for each source of income is less than Lei 22,800 for 2018 (12 minimum gross salaries at national level).
The withholding of the income tax with final taxation is also maintained for income obtained from dividends, interests, liquidation of a legal entity, prizes and gambling and other sources.
The scope of the income from independent activities has been revised in the sense of exclusion of the income from intellectual property and its separate treatment as a standalone independent category of income for which the withholding tax method continues to apply. The withholding tax does not apply to income from intellectual property for which the beneficiary has opted for the taxation in real system.
The Single Declaration on the income tax and social contributions owed by the natural persons will NOT be submitted for the following categories of income:
• Net income determined based on standard income, except for those who have submitted the declaration set forth in art. 120;
• Income from intellectual property rights whose taxation is final according to art. 84 paragraph (8);
• Income in the form of salaries and similar income for which information is included in the specific declarations;
• Investment income whose taxation is final;
• Income from prizes and gambling whose taxation is final;
• Income from pensions;
• Income from the transfer of real estate properties from the personal patrimony;
• Income from other sources, except for those set forth in art.116.
Submission deadline
The new form will be submitted once per year.
In 2018 the declaration will be submitted by 15 July and the payment will be made until 15 March 2019.
Starting from 2019, the declaration will be submitted by 15 March including for the income estimated to be made in 2019, and the payment will be made until 15 March of the following year.
If the activity starts after 15 July 2018 and 15 March 2019, respectively, the single declaration will be submitted within 30 days from the start of the activity.
In the event of its cessation or temporary suspension, the natural person will notify the tax bodies to stop the payment obligations.
The Order introduces for 2018 the possibility of reducing the annual tax liabilities - income tax, social security contribution, health insurance contribution - by granting discounts as follows:
• 5% if the single declaration is submitted until 15 July 2018 by electronic means and the tax liabilities are fully paid until 15 March 2019;
• 5% if the tax liabilities are fully paid until 15 December 2018.
The discounts reduce the estimated paid annual tax liability. If the conditions mentioned are cumulatively fulfilled, the discount granted will be of 10%.
The income from 2017
The taxpayers natural persons who obtained in 2017 income in the country and abroad, subject to declaration and taxation in Romania, from the category of income mentioned above, will submit the single declaration until 15 July 2018.
The tax authority determines the payable taxes and it will issue the taxation decision.
The income from 2018
The taxpayers natural persons who estimate to obtain income of the nature mentioned above, which is in the scope of the single declaration, will submit this declaration until 15 July 2018. These taxpayers will calculate themselves the tax owed and will determine whether they owe social security contributions.
The natural persons who have already submitted the income declarations by forms 200 or 201 until the date of entry into force of this ordinance, for income obtained in 2017, will no longer submit the single declaration.
The natural persons who have submitted for 2018 the forms 220, 221 and 600, will submit "The single Declaration" on the income tax and social contributions until 15 July 2018 and this will replace the respective forms.
The natural persons who have not obtained income, but have concluded optional social security contracts and have submitted the Form 604 and maintain the option of being insured, do not submit the single declaration, the initial form keeping its validity.
For the following years, the persons within the scope of the single declaration will submit this declaration until 15 March for the current year in order to be insured during this year. The payment of the tax and social security contribution for the income of the previous year will be made until 15 March of the following year.
Discounts may be granted for the full payment in advance under the state budget law.
B. The Order 888/2018 approves the template and the contents of the form (212) “Single declaration on the income tax and social contributions owed by the natural persons” introduced by the Government Emergency Ordinance 18/2018.
The form is used to declare the income earned in 2017 and to declare the estimated income tax and the mandatory social contributions owed by the natural persons starting from 2018.
The declaration will be submitted by:
• The natural persons who obtain, individually or in a form of association, income/register losses in Romania or/and abroad, who owe income tax and mandatory social contributions, according to the provisions of the Tax Code;
• The natural persons who do not obtain income and who choose to pay the health insurance contribution.
The declaration will be submitted until 15 July 2018 including by the natural persons who are obliged:
• To declare the income obtained in Romania or/and abroad in 2017;
• To declare the income tax/standard income estimated to be obtained in Romania in 2018;
• To declare the estimated income for the classification as a payer of social contributions and, where appropriate, to declare the social contributions owed in the fiscal year 2018.
The declaration is submitted within 30 days from the event occurrence date in case of the taxpayers who start an activity during the fiscal year and of those who obtain income from rental and leasing of the personal patrimony other than the income from lease for which the taxation is final and who have not had the obligation to submit the single declaration until that date.
The single declaration may be rectified by the taxpayers on their own initiative whenever the current information does not correspond to that in the previously submitted declaration by submitting an amending declaration.
The amending declaration is used for:
• The correction of the income tax and of the social contributions owed by the natural persons;
• The change of the data related to the category/source of income or their level according to law;
• The change of the data related to the social security contribution and the health insurance contribution estimated for 2018;
• The correction of other information mentioned in the form.
The taxpayer may rectify the estimated income until the deadline for the payment of the tax owed, namely until 15 March of the year following the taxation year.
Any presented information is general and is not meant to address the specific conditions of a particular individual or legal person. Although we try to provide accurate and up-to-date information, there is no warranty that such information is accurate at the time of its receipt or that it continues to be accurate. No action should be taken based on this information without relevant professional assistance following a careful examination of the circumstances that are typical of a particular state of affairs.
