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The Procedure for redirecting an amount up to 3.5% from the annual income tax

In this issue:

Order no. 147/2020, published in the Official Gazette no. 44/22 January 2020, provides for the Procedure, as well as for the form 230 for the transfer of an amount up to 3.5% of the annual income tax due to support nonprofit entities, cults and private scholarship

The Order no. 147/2020 provides for the Procedure applicable for redirecting an amount up to 3.5% from the annual income tax due to support nonprofit entities, cults and private scholarships. The Order also provides for new forms relevant for the Procedure, including for the Form 230.

Several relevant aspects provided by the Order are as follows:

- Along with salary income, salary assimilated income and pension, the Form 230 shall be also filed for the following income:

  • Income from independent activities/agricultural activities taxed based on income quotas;
  • Income from independent activities, earned based on contracts for sports activities, for which income tax is withheld by the payer;
  • Income from intellectual property rights, other than income for which the net income is determined under the real system;
  • Rental income, for which the net income is determined by lump sum deductions or income quotas.
 

- The taxpayers may opt supporting one or several entities. There is also the option available to support the same entity for a period of 2 consecutive years. After this period, the form needs to be renewed. 

- Depending on the type of income, the option to redirect the amount/amounts can be exercised by completing and submitting the following forms:

  • “The annual statement regarding income tax and social charges due from taxpayers";
  • Form 230 “Application for the transfer of the amount of up to 3.5% from the annual income tax due”.
 

- In case of taxpayers who earned salary income, salary assimilated income, pension income, as well as independent income based on sports activity contracts, between 1 January 2019 - 31 March 2019, the amounts will be transferred based on the provisions of Order no. 50/2019, as follows:

  • 2% to support nonprofit entities, cults and private scholarships; or
  • 5% to support nonprofit entities and cults, which are providers of social services and which are accredited with at least one licensed social service, according to the law.
 

- Form 230 may be submitted both in hard copy or electronically, through the Virtual Private Space.

- The deadline for filing the Form 230 continues to be by 15 March of the year following the one the income is earned. For tax year 2019, the deadline is by 16 March 2020.

 

Feel free to reach out to us should you like to receive detailed information on the provisions brought by this normative act as well as its applicability to your business.

Also, EY can assist you with tailoring advices on how to comply with the legal requirements provided by this  normative act (either for you as a natural personal, for your employees, or for the Company you represent).

For more information or details on the above you may consult the Official Gazette no. 44/22 January 2020, or you could contact us directly to clarify any other questions.

Prepared by:
Claudia Sofianu - Partner, People Advisory Services
 
For additional information, please contact:
Alex Milcev – Partner, Tax & Law Leader Romania
 
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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