Romania’s Finance Ministry has started the approval process for an emergency ordinance draft that brings important changes to the Fiscal Code, Romania-Insider informs.
The emergency ordinance aims to significantly change 200 of the 500 articles in the current Fiscal Code, which entered into force starting January 1, 2016. The current tax code was approved by law in September 2015.
One of the big changes proposed by the new emergency ordinance targets the social security contributions (CAS) and public health insurance contributions (CASS), two of the major taxes on labor in Romania.
According to the ordinance draft, the employers will pay no more social security contributions (CAS) for their employees but the employees’ quota will more than double. The new CAS paid by employees will be 21.7% of their gross salary, up from 10.5% now. However, the employers will no longer pay their 15.8% quota. This means, that the overall social security contribution for employees will be reduced from 26.3% to 21.7%.
However, the social security contribution quota paid by people who make revenues from independent activities will also increase from 10.5% to 21.7%.
Similar changes will be applied for healthcare insurance contributions (CASS). The employer’s quota, which is now 5.2% will be eliminated and the employee’s quota will increase from 5.5% to 8.9%. People who make revenues from independent activities will also pay the 8.9% contribution.
If these changes are approved, there will be no more differences in the way salaries and independent revenues are taxed.