In the Official Gazette no. 661 from 1 July 2022, it was published the Order of the Minister of Finance no. 1525 from 29 June 2022 regarding the approval of the Procedure for granting fiscal facilities in the agricultural sector and the food industry.

Under the Law no. 135/2022, which supplemented the provisions of the Fiscal Code, certain tax facilities were introduced for income from wages earned in the agricultural sector and the food industry for the period 1 June 2022 to 31 December 2028, if certain conditions provided by the law are cumulatively met. The procedure for granting these facilities was established by Order 1525/2022.

The fiscal facilities for the agricultural sector and the food industry consist of:

• exemption from the payment of the income tax;

• reduction of the social security contribution rate from 25% to 21.25%;

• exemption from the payment of the health contribution;

• reduction of the labour insurance contribution rate from 2.25% to 0.27%;

• exemption from the payment of social security contributions due by employers, in the case of special working conditions.

The most important aspects provided by the published Procedure are the following:

• The calculation mechanism of the indicators "Total turnover" and "Turnover actually achieved from activities in the agricultural sector and the food industry" which form the basis for determining the percentage of 80% of the total turnover for the current year, which represents a condition for granting the fiscal facilities in the agricultural sector and the food industry.

• The method of determining the percentage of at least 80% of the turnover, in the case of:

o employers/income payers existing on 1 January of each year after 1 June 2022;

o newly-established employers/income payers, registered in the trade register/tax registered from June 2022 onwards;

o employers/income payers existing on 1 June 2022.

• The method of reporting to the gross salary/gross monthly income, in order to fulfill the condition of the Fiscal Code, according to which the gross monthly income from salaries and assimilated salaries earned by individuals applying the facilities should be calculated on a gross salary for 8 hours of work/day of minimum 3,000 lei and maximum 10,000 lei monthly.

The Procedure also clarifies the following aspects:

• individuals who earn income from salaries and assimilated salaries from employers who carry out activities in the agricultural sector and in the food industry that fall under the conditions provided by the legislation, may opt for the payment of the 3.75% contribution due to the privately administered pension fund.

• the fiscal facilities are granted for the activity carried out in Romania, including individuals seconded on the territory of Romania, if their employer complies with the conditions provided by law, and the fiscal facilities are not granted to individuals who are seconded outside Romania.

The provisions of this Order are applicable starting with the income related to June 2022.

In the Official Gazette no. 661 from 1 July 2022, it was published the Order of the Minister of Finance no. 1528 from 29 June 2022 regarding the approval of the Procedure for granting fiscal facilities in the construction sector.

According to the Fiscal Code, individuals who earn income from wages in the construction sector, benefit from certain fiscal facilities for the period 1 January 2019 to 31 December 2028, if certain conditions provided by the law are cumulatively met.

The fiscal facilities granted for the construction sector are similar to those previously mentioned, for the agricultural sector and the food industry.

The procedure for granting fiscal facilities in the construction sector was regulated following the amendments to the Fiscal Code by Law no. 135/2022. Thus, the provisions included in this Procedure aim to integrate in a single normative act the information on the granting of fiscal facilities in the construction sector.

In addition, this Procedure clarifies some technical aspects and introduces some new elements, as follows:

• individuals who earn income from salaries and assimilated salaries from employers who carry out activities in the construction sector that fall under the conditions provided by the legislation, may opt for the payment of the 3.75% contribution due to the privately administered pension fund.

• the fiscal facilities are granted for the activity carried out in Romania, including individuals seconded on the territory of Romania, if their employer complies with the conditions provided by law, and the fiscal facilities are not granted to individuals who are seconded outside Romania.

• the turnover calculation mechanism and the gross salary condition are regulated.

The provisions of this Order are applicable starting with the income related to June 2022.

In the Official Gazette no. 742 from 22 July 2022, it was published the Law no. 252/2022 from 20 July 2022 amending the Law no. 227/2015 on the Fiscal Code.

According to the present Law, the increased rate of 2% tax on non-residential buildings of individuals can be applied in case the evaluation report is not submitted within the stipulated term, only if the owner of the building has been previously notified by the local tax authority about the possibility of submitting the evaluation report.

Also, the same aspect applies to the increased rate of 5% tax on buildings owned by legal persons where the owner of the building has not updated the taxable value in the 5 years preceding the reference year.

The deadline for notification is 31 October of the current year for tax due from the following year. If the notification is not communicated by the local tax authority by this date, the tax will be calculated by applying the standard rate.

In the Official Gazette no. 716 from 15 July 2022, it was published the Government Ordinance no. 16/2022 for changing and amending Law 227/2015 regarding the Fiscal Code, repeal of certain laws and other financial and tax measures. This normative act brings important changes in most of the areas of taxation.

For more details on important changes to the Fiscal Code, please see our previously published Tax Flash, available here.

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