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Tax alert no. 22 - Government Emergency Ordinance no. 43

In this issue:

     Government Emergency Ordinance no. 43 / 21 June 2019 for the amendment and addition of some normative acts regarding the establishment of some measures in the field of investments

On 21 June 2019, it was published in the Official Gazette no. 507, the Government Emergency Ordinance no. 43, through which several amendments were introduced, among which ones relate to the special provisions for the construction industry (which regulate tax incentives), as follows:

-         the minimum gross salary at the national level for certain activities from the construction industry is maintained to 3,000 RON per month for the period 1 January 2020 - 31 December 2028. This amount is established as cash payment and it does not include allowances or other incentives. This level is for a normal working schedule on average of 167.333 hours per month, at RON 17.928/hour.

-         sanctions are imposed for non-compliance with the minimum gross salary;

-         additional NACE codes from the field of building materials manufacturing for which tax facilities may be applied are introduced. Furthermore, the architectural, engineering and technical advisory services are excluded from the category of building materials manufacturing, being included in a distinct category, for clarification purposes;

-         changes are made in the method of determining the level of the turnover from certain activities of 80% of the total turnover (which is one of the eligibility conditions for the tax incentives), distinguishing between newly established companies, registered starting with January 2019, and those in place at the date of 1 January  of each year. Furthermore, clarifications are brought relating to the types of construction activities taken into account to determine the proportion of 80%. The computation mechanism of the turnover will be established by order of the president of the National Commission for Strategy and Prognosis, which will be published on the website of the competent institution;

-         clarifications are brought related to the monthly gross income from salaries and assimilated to salaries for which the tax incentives may be applied, ranging between RON 3,000 and RON 30,000 per month: the minimum value applies for 8 hours of work per day; the part of the gross monthly income that exceeds the maximum value of RON 30,000 RON will not benefit from the tax incentives.


The above mentioned amendments will enter into force from 20 July 2019.


Prepared by:
Corina Mîndoiu, Director, Income tax and social charges


For additional information, please contact:

Alex Milcev, Partner – Head of Tax&Legal


Ernst & Young SRL

Bucharest Tower Center Building,

22nd Floor, 15-17 Ion Mihalache Blvd.,

Sector 1, 011171, Bucharest, Romania

Tel: (40-21) 402 4000, Fax: (40-21) 310 7124

Email: office@ro.ey.com

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