A. Amendment of the Tax Code (Law no. 227/2015)
Law no. 296/2023 introduced a series of amendments to the Tax Code, some of which will take effect from November 1st, 2023. These amendments pertain to sectors of interest, including the IT industry, as well as the construction, agricultural, and food industry segments.
a. Income tax
One of the main changes concerns the applicability of the tax exemption on income from salaries and other equivalent income from the activity of creating computer programs. According to the new provisions, the exemption applies within the limit of a gross income of up to 10,000 RON. Thus, any amount exceeding this income will not benefit from the income tax exemption.
b. Social security contribution
Another amendment affecting the previously mentioned sectors concerns the social security contribution rate. As per Law No. 296/2023, it has been established that this rate will be reduced by the equivalent percentage points of the contribution rate to the Private Pension Fund stipulated by Law No. 411/2004.
Individuals earning income from salaries or those considered equivalent to salaries are provided with the option to pay the contribution due to the Private Pension Fund.
c. Health insurance contribution
Employees in the IT, construction, agriculture and food industry branches are required to pay the health insurance contribution for their income from salaries and assimilated to salaries; these categories of persons are no longer exempted from these contributions.
B. Amendments concerning cash transactions (Law no. 70/2015)
Law No. 296/2023 has also implemented several noteworthy changes concerning cash transactions. These amendments are set to take effect starting on November 11, 2023.
a. Thresholds for cash transactions:
Cash receipts from legal entities, PFAs, individual and family enterprises, freelancers, independent contractors, associations, and other entities—whether with or without legal personality—are limited to 1,000 RON per day per person. Notably, cash transactions in cash and carry shops have a higher limit of 2,000 RON per day per person.
Cash payments to legal entities, PFAs, individual and family enterprises, freelancers, independent contractors, associations, and other entities, regardless of legal status, are capped at 1,000 RON per person per day, with an overall limit of 2,000 RON per day.
Cash payments made from advances for settlement purposes may be conducted within a daily limit of 1,000 lei per person.
b. Receipts and fragmented payments
Cash receipts and payments for invoices with a value exceeding 1,000 RON, respectively 2,000 RON for cash and carry shops, cannot be fragmented.
c. Cash receipts and payments representing the value of works or purchases of goods or services, dividends, assignment of debts or other rights and loans/financing
Cash receipts and payments between individuals and legal entities, PFAs, individual enterprises, family enterprises, freelancers, individual contractors, associations, and other entities, whether with or without legal personality, will be conducted within a daily limit of 5,000 RON per person until December 31, 2024, and then reduced to 2,500 RON starting from 2025.
It’s important to note that fragmented receipts and payments exceeding the limits of 5,000 RON (until 2024) or 2,500 RON (from 2025) for cash transactions to or from one person are prohibited.
Moreover, it is not permissible to conduct fragmented transactions that involve the assignment of claims or other rights, receipt or repayment of loans or other financing, dividends, or the fragmentation of goods delivery or service provision, with a value surpassing the aforementioned thresholds.
These prohibitions do not apply to the supply of goods and services made in installments if these contracts are executed in compliance with the law.
d. Money in the cash register
The cash register may retain a maximum of 50,000 RON. Should this amount be exceeded, the company is obligated to deposit the excess funds into a bank account within two working days.
As an exception, this limit may be exceeded only with the amounts related to the payment of salaries and other personnel rights, as well as other transactions involving individuals, for a period of 3 working days from the date foreseen for their payment.
e. Cash refunds on cancelled invoices
In case of cancelled invoices, the limits for cash refunds for returned goods and/or services not rendered are 1,000 RON, respectively 2,000 RON for cash and carry shops.
For the return of goods/non-provision of services by individuals, the threshold is set at 5,000 RON.
f. Cash receipts and payments between individuals (transfer of ownership, provision of services, loan):
These operations can be carried out within the limit of a daily cap of 10,000 RON/transaction. Fragmented cash receipts and payments have been banned for transactions exceeding 10,000 RON.