OVERTAXATION OF MINERAL OILS AND OF PART-TIME EMPLOYMENT
CONTRACTS IS ABOLISHED (LAW NO. 263/ 30/12/ 2019)
The basis of assessment for determining social security contributions (pension and health
insurance) for natural persons receiving income below the gross minimum wage has so far
been the gross minimum wage, which is why, in the case of part-time contracts, social security
contributions are much higher in proportion to income. This provision is now being repealed.
From January 2020, the actual income received from a full-time or part-time contract will be
the basis for calculating social security contributions (pension and health insurance), even if
they are lower than the gross minimum wage.
At the same time, Law No. 263/2020 eliminates the overtaxation of mineral oils (leaded petrol;
unleaded petrol; diesel) introduced in 2017 in two stages (15 September and 1 October). Thus,
the consumer tax on leaded petrol will be reduced by about 14%, that on unleaded petrol by
about 17%, while the consumer tax on diesel fuel will be reduced by almost 18%.
Law No. 263/2019 came into force on 1 January 2020.
SEPARATE PAYMENT OF NET PRICE AND VAT (SPLIT PAYMENT PROCEDURE)
IS REPEALED AS OF 01.02.2020 (EMERGENCY ORDINANCE NO. 78/ 18.12.2019)
The Emergency Ordinance No. 78 of 18 December 2019 repeals, with effect from 1 February
2020, Ordinance No 23/2017 with regard to the separate payment of net price and VAT.
Regulation 23/2017 provided for the opening of a separate VAT account to which customers
would pay VAT and from which input VAT to suppliers/service providers or VAT liabilities to
the tax authorities would be paid directly.
Until 1 February 2020, these special VAT accounts can now be enforced by any creditor,
regardless of the nature of their claim. The credit balance then still on the VAT accounts after
1 February 2020 will be transferred by the State Treasury to the State Treasury accounts of
the persons who have applied the split payment procedure within 10 days without further
formalities. If the users of the split payment procedure do not have an account with the State
Treasury, they must notify the State Treasury of their bank details to which the credit is to be
transferred within a period of ten days calculated from 01.02.2020.
NEW OBLIGATIONS RESULTING FROM LAW NO. 129/2019 ON THE FIGHT
AGAINST MONEY LAUNDERING AND TERRORIST FINANCING
On 18 July 2019, Law No. 129/2019 on combating money laundering and terrorist financing
was published. This law obliges so-called “reporting units” to fulfil certain reporting obligations
within 180 days of the law’s entry into force, i.e. from 21 January 2020.
Thus, the Act provides for the obligation to designate a person in relation to the National Office
for the Prevention and Combating of Money Laundering. The designation is made exclusively
in electronic form, by accessing the Authority’s website – section “Personal designation and
online reporting” – subheading “Personal designation and online reporting” and the next steps
for obtaining an account in the electronic data transmission system (SEDT).
This obligation to designate a reference person does not apply to natural persons, nor to
foundations and associations, federations or other legal persons under private law, even if
they have the status of “reporting entity”.
All “reporting units” are however obliged to transmit a report on suspicious transactions
exclusively to the Office if they have knowledge of them, if they suspect or have reasonable
grounds to suspect that
- the goods originate from crimes or in connection with the financing of terrorism;
- the person or his authorised representative/agent is not who he claims to be;
- the information held by the reporting unit can be used to enforce the provisions of this
Act; or - in any other situation or with regard to elements that may raise suspicion as to the
nature, economic purpose or justification of the transaction, such as the existence of
inconsistencies in the client’s profile or if there are indications that the data available
on the client or on the actual beneficiary are not real or up-to-date and the client refuses
to update them or provides implausible explanations.
Law No 129/2019 defines the following as “reporting units”:
a) “Credit institutions, Romanian legal persons and branches of credit institutions, foreign
legal persons;
b) financial institutions, Romanian legal persons and branches of financial institutions,
foreign legal persons;
c) managers of private pension funds in their own name and for private pension funds
which they manage, with the exception of the pension funds of occupational pensions;
d) gambling service providers;
e) auditors, tax consultants and authorised accountants, censors, persons providing tax
and financial consultancy services and business or accounting advice;
f) notaries, attorneys, bailiffs and other persons exercising freelance legal professions,
when they assist their clients in the purchase or sale of real estate, shares, business
shares, securities or other goods in the creation or perfection of transactions involving
a sum of money or a transfer of ownership, opening or managing bank accounts,
savings deposits, financial instruments, organising the subscription procedure for the
establishment, operation or management of a business; the creation, management or
operation of such companies, intermediaries for collective investment in securities or
other similar structures, as well as in the case of participation in any financial operation
or relating to real estate, in its own name or on behalf of its clients;
g) service providers for companies and trustees other than those referred to in points (e)
and (f); estate agents;
h) Other companies and natural persons who market goods or services as traders, insofar
as they carry out transactions in cash exceeding the equivalent in lei of €10,000,
regardless of whether the transaction is carried out by a single operation or by several
operations that are related to each other.
Important! A service provider for companies and other entities or legal structures is
understood to be any natural or legal person who professionally provides one of the following
services for third parties:
1. establishes companies or other legal entities
2. carries out the activity of director or manager of a company or is a partner in a
partnership, an investment company or has a similar function within other legal entities
or arranges for another person to carry out these activities or functions
3. provides a registered office, an elected domicile or any other service associated with
a company or any other legal person or similar legal structure;
4. acts as a trustee within a trust or similar structure, or arranges for another person to
exercise such activity
5. arranges for another person to act as a shareholder on behalf of a legal entity, except
for companies whose shares are traded on a regulated market which is subject to
disclosure requirements in accordance with European Union legislation or
internationally established standards;
Sanctions
Failure to comply with the provisions of Law 129/2019, if not carried out in circumstances that
constitute a criminal offence, is punishable as follows
1. for natural persons with a warning or a fine between 25,000 lei and 150,000 lei,
2. for legal entities, with a warning or the fine provided for in point 1. for natural persons,
the maximum amount being increased by 10% of the total proceeds shown in the last
annual financial statements prior to the date on which the assessment report is drawn
up and the offence is sanctioned The sanctions and measures may be imposed on
members of management or other natural persons responsible for the violation of the
law.
3. if one of the infringements is committed by another financial institution not under the
supervision of the National Bank of Romania and if the infringement is serious,
repeated, systematic or a combination thereof, without, however, fulfilling the
conditions of a criminal offence, the upper limits of the penalties provided for under 1.
and 2. shall be increased as follows:
- for legal persons by 5,000,000 lei;
- for natural persons by 50,000 lei.