CHANGES TO THE TAX LAW BOOK (Law No 60/2019, valid from 20.04.2019)

The Romanian Official Gazette No. 296 of 17 April 2019 published Law No. 60/2019 amending and supplementing Law No. 227/2015 with regard to the Romanian Code of Laws of the Republic of Romania.

The new regulation includes the introduction of an upper limit for services provided by electronic means and the applicable VAT regulation with regard to the sale of vouchers.

Value vouchers: clarification of the due date of the VAT for them

In order to implement the provisions of EU Directive 1065/2016, a new article has been added to the Romanian Tax Code defining vouchers. These are divided into single-purpose vouchers and multi-purpose vouchers and it determines how VAT is levied in the case of the two categories. The main changes are as follows:

• The term “voucher” previously used in the national VAT legislation will be replaced by the term “value voucher“.
• The vouchers are defined as instruments which require that they be accepted as a partial / total price for goods and services and which indicate either in their content or in the related documentation, the goods/services supplied or the identity of the potential supplier/service provider.
• There are two types of vouchers: a single-purpose voucher is therefore a voucher where the place of supply of the goods or services to which the voucher relates and the VAT due on those goods or services is established at the time the voucher is issued. If these criteria are not met, the voucher is a multi-purpose voucher.
• In terms of VAT, this distinction has the following effects: in the case of single-purpose vouchers, VAT is payable at the time the vouchers are transferred, and in the case of multi-purpose vouchers, VAT is payable on the supply of goods or services to which the vouchers relate.

Companies that issue vouchers, trade them, broker the trade and/or receive payments from value coupons must analyse the transactions and pay VAT on each sale of single-purpose vouchers, whereas in the case of multi-purpose vouchers they must only do so when the goods/services are delivered in exchange for the voucher.

Value added tax for electronic services: Registration simplifications

Providers of electronic services to natural persons not subject to VAT are no longer obliged to register for VAT in the EU countries from which the consumers originate if they cumulatively meet the following conditions:

• the service provider is established or, if not established, has his residence or habitual abode in a single EU Member State;
• the recipients of the services are non-taxable persons having their fixed or normal residence in any other EU Member State other than the Member State of the service provider;
• the total value, net of VAT, of electronic services in the current calendar year does not exceed 10,000 euros or the equivalent in national currency (46,337 lei)

If the service provider meets the above conditions, he will issue an invoice with Romanian VAT to all customers not subject to VAT.

Until the law no. 60/2019 came into force, taxable electronic service providers had to register as VAT payers in each EU member state of their private customers or could opt for the use of the MOSS (Mini One Stop Shop), which gave them the opportunity to use the Romanian VAT no. in other EU states.

THE DAILY WAGES ACT NO. 52/2011 (OUG 26/2019) IS CHANGING

On 19 April 2019, the Emergency Ordinance No. 26/2019, amending Law 52/2011 on the exercise by day labourers of certain occasional activities, was published in the Romanian Official Gazette No. 309.

The main changes introduced by these amendments are:

• The extension by 9 fields of activity in which contracts can be concluded with day-labourers: Agriculture, hunting and related activities – Division 01; Forestry, except forest exploitation – Division 02; Fishing and aquaculture – Division 03; Organisation of exhibitions, fairs and congresses – Group 823; Advertising – Group 731; Artistic performances – Shows – Class 9001, Support for artistic performances – Shows – Class 9002 and Activities of administration of event premises – Class 9004; Breeding and reproduction of domestic animals and other animals – Class 0149; catering for events – division 5621; landscape maintenance – planting and maintenance of parks and gardens, with the exception of private residences – class 8130; restaurants – class 5610; bars and other catering activities – class 5630; activities of zoological and botanical gardens and other nature reserves – class 9140.
• Introduction of the obligation to pay pension insurance contributions amounting to 25% of gross income. Thus, day-labourers are legally insured for pensions. On the other hand, compulsory health insurance will not be introduced. However, day-labourers can opt for health insurance as part of their income tax return. The employer is also not obliged to pay the employment insurance (2.25%) for the remuneration of the day labourer.
• Changes in the maximum duration of the activity that a day labourer can perform. Thus, each day-labourer cannot work for the same employer for more than 90 days, cumulated over one calendar year. Excluded from this are day-labourers working in agriculture, animal husbandry in the extensive system through seasonal grazing of sheep, cattle, horses, the seasonal activities of botanical gardens subordinated to accredited universities, as well as in viticulture; in these cases the duration of activity cannot exceed 180 days cumulated over one calendar year.

The creation, on 20 December 2019, of an electronic register of day labourers, which will be the only means of transmitting data on day labourers’ records.