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The updated form of the Statement 112

In this issue:

Order no. 3063/1376/1430/2019 for the approval of the model, content, filing procedure of the “Statement regarding the payment obligations related to social contributions, income tax and the nominal record of the insured persons” has been published in the Official Gazette no. 794 dated 1 October 2019

The Order provides for the updated form of the Statement 112 and several aspects raised our attention as regards the following:

-   tax incentives implementation method in construction sector;

-   employees’ assignment between two Romanian companies;

-   employees’ assignment to/from Romania within EU/EEA/ Switzerland and third countries;

-   reclassification of independent activities into dependent ones;

-   reporting of benefits in cash and in kind received from third parties as a result of an employment relationship generating salary type of income.    

 

Tax incentives applied in construction sector  

Further to the Emergency Government Order 43/2019, the Order splits the month of July 2019 in two periods  (i.e., 1 – 21 July 2019 and 22 – 31 July 2019) and regulates the method for filling in the Statement 112 and/or related Appendices starting with July 2019.

According to the Order, no penalties shall apply for failing to fulfill the tax obligations within the legal timeframe for the respective two months (July and August), so long as the they are undertaken within 60 days – calculated as of the date the electronic version of the Statement 112 is uploaded on ANAF website.

So long as the conditions provided for the employer are cumulatively met, the tax incentives shall also apply for:

-      to part-time employees and those with internship and apprenticeship contracts, provided that their base salary amounts to at least RON 17.928/hour, applied to their working time;

-      to individuals on medical leave or with reduced working time, where the base salary is of at least RON 3,000 for a full-time working schedule.

The tax incentives apply also to employees assigned to Romania provided that the Romanian host company fulfills the conditions for applying the tax incentives and the salary payments are made by the latter.  The tax incentives do not apply for the employees assigned outside Romania.

To be noted, the tax incentives have been extended to other types of agreements (beside individual employment contracts) for income tax purposes only. Thus, all social charges continue to apply.

The Order provides several examples for filling in the Statement 112, depending on the tax incentives’ implementation method for various scenarios.

 

Assigned employees / Income reclassification

The Order also provides instructions on how the Statement 112 is due to be filled in starting October 2019, in certain situations, as follows:

-      in case of employees assigned by a Romanian employer to another Romanian employer - it should be mentioned which of the employers is making the salary payment;

-      in case of employees assigned to EU/ EEA/ Switzerland - it should be stipulated whether employees benefit or not from A1 forms, whereas for those assigned to non-EU/ EAA/ Switzerland, if the assignment is in a Treaty/non-Treaty country;

-      in case of employees assigned from EU/ EEA/ Switzerland - it should be stipulated whether employees benefit or not from A1 forms, whereas for those assigned from non-EU/ EAA/ Switzerland, if the assignment is from a Treaty/non-Treaty country;

-      in case of reclassification of independent activities into dependent ones – the type of insured person shall be mentioned as per Appendix 4 regarding “Classification “Type of the Insured Person”” from the Order.

 

Prepared by:
Stela Andrei - Director, People Advisory Services

 

For additional information, please contact:
Alex Milcev - Partener, Head of Tax&Legal

 

Ernst & Young SRL

Bucharest Tower Center Building,

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

011171, Bucharest 1, Romania

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

Email: office@ro.ey.com

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