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Romania: Tax Amnesty Law Regarding the Reclassification of Daily Allowances as Salary

Romania: Tax Amnesty Law Regarding the Reclassification of Daily Allowances as Salary

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Law 72/2022 on the enforcement of a tax amnesty for tax liabilities, including interest and penalties for late payment, imposed by the tax authorities following the reclassification of daily allowances as salary, was published in the Official Gazette on 31 March based on a bill submitted in September 2021.

The tax amnesty applies to all tax liabilities from 1 July 2015 until now imposed by the tax authorities following the reclassification. The main companies affected by this reclassification are those in the construction and international transport sectors and temporary work agencies.

The tax amnesty targets both assessed and unpaid tax liabilities as well as tax debts already paid by companies. In the latter case, companies will be able to apply for a refund.

The tax amnesty will be applied automatically by the tax authorities without the need for companies to make a special request to benefit from it, as decisions will be issued to cancel the tax debts and these will be officially served to qualifying taxpayers.

The Law also provides clarifications on the tax treatment of daily allowances with a view to avoiding future reclassification:

  • Primarily, the new tax regulations make explicit reference to the delegation allowance, the secondment allowance, amounts paid under mobility employment clauses and the transnational secondment allowance.
  • A new deductibility threshold (at the level of the company) and non-taxable threshold (at the level of the employee) of 3 base salaries for external daily allowances is implemented. 
  • The tax authorities will be able to reclassify the daily allowances only based on the findings of the Labour Inspectorate.

By Theodor Artenie, Tax Advisor, Noerr

Romanian Knowledge Partner

Țuca Zbârcea & Asociații is a full-service independent law firm, employing cross-disciplinary teams of lawyers, insolvency practitioners, tax consultants, IP counsellors, economists and staff members. It also operates a secondary law office in Cluj-Napoca (Romania), and has a ‘best-friend’ agreement with a leading law firm in the Republic of Moldova. In addition, thanks to the firm’s dedicated Foreign Desks, the team provides the full range of services to international investors seeking to gain a foothold or expand their existing operations in Romania. Since 2019, the firm and its tax arm are collaborating with Andersen Global in Romania.

Țuca Zbârcea & Asociaţii is providing legal services in every aspect of business, covering all major areas of practice: corporate and M&A; litigation and international arbitration; corporate tax; public procurement; TMT; employment; insurance; banking and finance; capital markets; competition; healthcare and pharmaceutical; energy and natural resources; environmental; intellectual property; real estate; regulatory legal services.

Țuca Zbârcea & Asociaţii is a First-Tier law firm in all international legal directories and a multiple award-winning law firm both locally and internationally. It received the CEE Deal of the Year Award (DOTY Awards 2021) and the Law Firm of the Year Award: Romania (IFLR Europe Awards 2021). 

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