Tax Flash no. 43
11 November 2020
Law no 239/2020 for the amendment and completion of Law no. 227/2015 regarding the Tax Code
In the Official Gazette no. 1041 dated 6th November 2020 was published the Law no. 239/2020, which, with 9th November 2020, introduces tax facilities regarding corporate income tax and personal income tax for legal entities that set up nurseries / kindergartens for the children of their own employees or pay for the placement of children of their employees in private or public nurseries / kindergartens, as follows:
- Corporate income tax:
- Are included in the non-deductible expenses for corporate income tax purposes the expenses for the proper functioning of early education units (i.e. nurseries, kindergartens) administrated by taxpayers or the expenses with the amounts paid by taxpayers for the placement of children of their employees in private or public nurseries / kindergartens.
In the same time, it is introduced the possibility for taxpayers to deduct from the corporate income tax due the expenses incurred with early education, in the limit of 1,500 RON / month / per child. If the amount exceeds the corporate income tax due, the difference will be deducted from the salary income tax withheld by the taxpayer for employees, from the VAT due or from the excise duties due, in this specific order.
Please note that at this moment the provisions on the tax treatment for corporate income tax purposes of the expenses incurred for the proper functioning of early education units are not clear. Thus, this type of expenses are included both in the social expenses deductible in the limit of 5% of the salary expenses, as well as in the non-deductible expenses for which it is granted a reduction of the corporate income tax or of other taxes as mentioned above. We will revert with additional information if clarifications will be introduced trough the Methodological Norms.
- New categories of depreciable fixed assets for tax purposes are introduced, respectively, the investments performed and the fixed assets owned and used for organizing and developing vocational and technical education, dual pre-university and university education;
- Are considered deductible expenses the expenses performed for the organization and development of vocational and technical education, dual pre-university and university education, according to the legal regulations in the field of national education;
- Personal income tax:
- The amounts paid by the employer for the early education of the children of its employees are introduced as non-taxable benefits from a personal income tax perspective, without establishing a non-taxable limit.
Please note that these amounts are taxable from a mandatory social security contributions perspective (37.25%), regardless of their value.
Law 241/2020 for the amendment of paragraph (1) of art. 459 of Law no. 227/2015 on the Fiscal Code
In the Official Gazette no. 1041 dated 6th November 2020 was published the Law no. 241/2020, which will enter into force on 1st January 2021. The law amends the method of calculating the local tax for mixed-use buildings owned by individuals, therefore, it will be calculated by summing the following:
- the tax calculated for the area used for residential purposes, determined by applying the quota and the specific conditions;
- the tax determined for the area related to the non-residential activity, indicated by a declaration on one's own responsibility, and provided that the utility expenses are not recorded in the charge of the person carrying out the economic activity. The tax rate related to the non-residential value will be applied starting from the value related to the residential use to the area corresponding to the non-residential activity.