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Main legislative changes of May 2023

07/06/2023
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1.     New procedure for income tax exemption for programmers

 

In the Official Gazette no. 370 of 2 May 2023 was published Order no. 20.463/3.964/967/1.415/2023 on the classification of the activity of creating computer programs.

 

The Order repeals the former Order no. 21813/6421/2246/4433/2022 and makes minor changes to the conditions required to qualify for exemption from tax on income from wages and salaries by employees whose activity includes the creation of computer programs.

 

The main changes presented by the new Order are:

  • The department to which the employee belongs must have at least one of the following areas of activity, highlighted in the employer's organisation chart: information and communication technology, artificial intelligence and emerging digital technologies, electronic tax administration, databases, e-government services and digital transformation;
  • Introduction of the bachelor's degree as a document obtained on completion of university studies;
  • Keeping a separate record of the activities of employees benefiting from the payroll tax exemption, which must be made on a monthly basis for the actual duration of the creation of computer programs activity, in order to grant the tax facility;
  • The application of exemption from the payment of tax on income from wages and assimilated salaries for the entire income earned in the month in question for employees of public institutions, even if the software development activity is carried out for only part of the month;

The new Order comes into force on 1st June and applies from May income onwards.

 

 

2.     Prison sentence for VAT fraud

 

In the Official Gazette no. 440 of 22 May 2023 was published Law no. 125 supplementing Law no. 241/2005 on preventing and fighting tax evasion.

 

According to the new law, any action or inaction committed as part of a cross-border fraudulent scheme resulting in a reduction of at least €10.000.000 in national currency equivalent, of the resources of the European Union budget shall constitute a criminal offence and shall be punishable by imprisonment for a term of 7 to 15 years and loss from exercising certain rights.

 

 

3.     Amendment of the archiving period for accounting and tax documents

 

The Order of the Minister of Finance no. 1477/2023 was published in the Official Gazette no. 453 of 24 May 2023, bringing changes and additions to the regulations on financial-accounting documents.

 

According to the new rules, mandatory accounting ledgers and supporting documents that are used for financial accounting records must be kept in the archives of the persons provided by law, for a period of 5 years, starting on 1 July of the year following the financial year in which they were prepared. The 5 year retention period applies also to salary statements. In this sense it is correlated with the prescription period of the tax authority's right to establish tax claims.

 

In case of fixed assets with a useful life of more than 5 years, supporting documents shall be kept for the period corresponding to their useful life.

 

 

4.     Establishment of the TLI-NAFA collaboration procedure

 

In the Official Gazette no. 395 of 9 May 2023 was published the Order of the Minister of Finance no. 1429/2023 regarding the approval of the procedure for the application of the provisions of Law no. 72/2022 for the cancellation of certain tax obligations and for the modification of certain normative acts.

 

According to the present procedure, verifying of the situations declared by the employers concerning the delegation, secondment or transnational secondment in which the employees are, as the case may be, according to the law, will be done by the Labor Inspectorate, through the territorial labor inspectorates. The documents drawn up as a result of own control actions are then transmitted to the territorial tax authorities of the National Agency for Fiscal Administration, within a maximum of 45 working days from the date of conclusion, in order to be taken into account in any tax inspection actions to be carried out on the taxpayers concerned.

 

If, as a result of risk analyses and unannounced controls carried out by the territorial tax bodies of the NAFA, situations are identified where employees are subject to delegation/secondment/transnational secondments as well as the granting of additional performance based on the mobility clause, to confirm the nature of the income earned by the employees of the taxpayers concerned, the territorial tax authorities of the NAFA request the territorial labor inspectorates subordinate to the Labor Inspectorate, within a maximum of 15 working days from the date of the completion of the risk analysis or the date of the minutes drawn up as a result of the unannounced tax inspection, to carry out verifications to ascertain the situation of the employees of the taxpayers concerned.

 

After receiving the control documents from the territorial labor inspectorates, NAFA can carry out tax inspection actions in which it orders, where appropriate, the tax reclassification of the amounts in question.

 

 

5.     Declaration of non-deductibility of VAT for expenses financed by the NRRP

 

In the Official Gazette no. 452 of 24 May 2023 was published the Order of the Ministry of Finance no. 1481/2023 approving the Instructions on the use of the form "Declaration on the non-deductibility of VAT related to expenses incurred in the framework of operations financed through the National Recovery and Resilience Plan within the Recovery and Resilience Mechanism and from national public funds".

 

According to the present Order, beneficiaries of funds under the NRRP must draw up and submit to the reform coordinators and/or other persons provided for by law the "Declaration on the non-deductibility of VAT related to expenses incurred in the framework of operations financed through the National Recovery and Resilience Plan within the Recovery and Resilience Mechanism and from national public funds" related to the activities carried out based on contracts concluded with service providers or other economic operators.

 

The reform coordinators verify the information in the "Declaration of non-deductibility of VAT" based on data from the Register of Taxable Persons registered for VAT purposes.

 

 

6.     Amendment of the “e-propriri” procedure

 

In the Official Gazette no. 399 of 5 May was published NAFA Order no. 626 regarding the amendment and completion of NAFA Order no. 878/2022 on the establishment of electronic transmission of enforcement documents and the procedure for their communication.

 

The Order eliminates the provisions relating to the Framework Agreement concluded between the banks and NAFA based on which the banks provided information.

 

As a result of these amendments, banks will be required to communicate, after the establishment of the enforcement and whenever amounts are collected in the debtors' accounts, information regarding the amounts that can be paid, with the aim of avoiding the financial availability of debtors being affected by multiple enforcements of the same debt and avoiding situations in which the tax authorities would have to refund excess amounts collected.

 

The amendments mentioned above will come into force on 1st October 2023, given the need to adapt the credit institutions' IT systems to the new legal provisions.

 

 

7.     The European directive on pay transparency and equal pay

 

In the Official Journal of the European Union no. L132 of 17 May 2023, was published Directive (EU) 2023/970 of the European Parliament and of the Council of 10 May 2023 to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women through pay transparency and enforcement mechanisms.

 

The Directive prohibits discrimination and lays down minimum requirements to strengthen the application of the principle of equal pay for equal work or work of equal value between men and women. The Directive applies to employers in public and private sectors and is addressed to the Member States for implementation.


Disclaimer

The information contained in this newsletter is intended to give you an overview of new legislation; the newsletter does not contain a comprehensive analysis of each topic. For more information on the topics covered please contact us. No liability is accepted for decisions or omissions following the use of the contents of this newsletter. All Crowe newsletters are available at the address www.crowe.ro.

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