We present some legislative news with impact in the field of labor law and tax law.

A.     CHANGES IN THE FISCAL CODE

Government Emergency Ordinance no. 79/2017 for amending and completing the Law no. 227/2015 regarding the Fiscal Code.

The new normative act includes several changes to the tax regime, among which:

Reducing social contributions to 3 (three) as: social security contributions (CAS), social security contributions (CASS)  and insurance contribution to work. Thus, mandatory social contributions will be the following:

1. the social insurance contribution (CAS) in the share of:

a) 25% due by the persons having the quality of employees and by the  natural persons for whom the social insurance contribution is payable according to the Fiscal Code;

b) 4% due to special labor conditions by natural persons  and legal entity who have the status of employers or are assimilated to them;

c) 8% due to special conditions of work and other working conditions, as provided by Law no. 263/2010 on the unitary pension system by natural persons and legal entity  who are or are assimilated to employers.

2. the social security contribution (CASS) in the 10% share due by natural persons who have the quality of employees or for which there is the obligation to pay the social insurance contribution, according to the Fiscal Code.

3. The insurance contribution for the 2.25% share of the work due by the natural and legal persons who are or are assimilated to employers.

In fact, it can be seen from the above that the total share of mandatory social contributions has been reduced by a total of 2 percentage points, respectively from 39.25% to 37.25%, and the fiscal burden of mandatory social contributions obligations was transferred from the employer to the employee in the case of salary and salary income.

Reducing the income tax rate from 16% to 10% for salary income and assimilated to salaries, from independent activities, from disposal of property use, from investment (less income from dividends, for which the tax quota of 5 %), pensions, agricultural activities, prizes and other sources.

Modification of the applicable conditions for the listing of legal entities as micro-enterprises, including by increasing the registration ceiling from 500,000 Euro to 1,000,000 Euro;

According to the new normative act, the sanctioning of an economic agent with the refusal to deduct VAT is possible only if there is evidence that he has clear information about the activity of the evasion companies with which he entered into commercial relations.

B.     MODIFICATIONS REGARDING WORKING RELATIONS

According to article VIII of GEO no.82 / 2017 for the amendment and completion of some normative acts - the initiation of collective bargaining is mandatory, for the implementation of the provisions of Government Emergency Ordinance no. 79/2017 for amending and completing the Law no. 227/2015 regarding the Fiscal Code.

As with the legislative amendments in GEO no. 79/2017, starting with 01.01.2018, the employees' net salaries will decrease due to the increase of the social contributions due by them, the employers are obliged to start the negotiations with the employees, between the 20th of November and the 20th of December.

Employers who do not initiate the negotiation will be sanctioned with a fine ranging from 5,000 lei to 10,000 lei according to Article 217 paragraph (1) letter b) of the Social Dialogue Law no.62 / 2011.

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