The package of laws dubbed the “small tax reform” has been published in the Official Gazette along with the presidential decree promulgating it, IPN reports.
Effective on October 1, a flat tax of 12% will be imposed on individual income. This is replaces the progressive system which levied 7% on annual incomes of up to 33,000 lei and 18% on any amounts above that. Also, under the new rules, taxi drivers earning up to 10,000 lei a month will pay a fixed monthly tax of 500 lei.
Personal tax breaks are now rising to 24,000 lei. For individuals who got disabled in combat the tax exemptions are 30,000 lei. Additional exemptions also increased: to 3,000 lei for every child, and to 18,000 for every dependant with congenital or serious disabilities.
Social insurance premiums paid by private sector employers will reduce from 23% to 18%, and from 16% to 12% in agriculture. Also, VAT in the hospitality and restaurant industry will be halved to 10%.
Additionally, the deadline for repatriating foreign currency under external contracts will increase from two to three years. The powers of the Security and Intelligence Service will be limited when investigating economic offenses. Fines and late payment penalties will be annulled if overdue taxes are paid by December 10 or 20.
Most measures in the package will take effect on October 1.