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Exclusion of IT employees from income payroll tax in Romania

August 27, 2018
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Romanian

Employees who carry out their activity on the territory of Romania, in accordance with the legislation in force, may benefit from the tax exemption on income from salaries and assimilated wages, 60 pt. 2 of the Law no. 227/2015 regarding the Fiscal Code, with the subsequent modifications and completions, if the following conditions are met cumulatively:

  1. The Articles of Incorporation of the respective company must include the specific economic activity “computer software creation” (CAEN code 5821, 5829, 6201, 6202, 6209);
  2. The jobs/positions assigned to the employees must be according to the list below:
  • Database Administrator (COR Code: 252101)
  • Analyst (COR code: 251201)
  • System Engineer in Computer Science (COR Code: 251203)
  • Software System Engineer (COR Code: 251205)
  • IT Project Manager (COR Code: 251206)
  • Programmer (COR code: 251202)
  • Information system designer (COR Code: 251101)
  • Information system programmer (COR Code: 251204)
  • Help Programmer (COR Code: 351201)
  • Help Analyst (COR Code: 351202)
  1. The persons that would be eligible for tax exemption work within a specialized department in accordance with the internal organization of the company, e.g. “Direction”, “Department”, “Office”;
  2. The employees have obtained diploma awarded after completing a form of long-term or short-term higher education or hold a diploma, after the completion of the first cycle of university degree studies issued by an accredited higher education institution or holding a baccalaureate diploma and are following courses to an accredited higher education institution and effectively carries out one of the activities listed in the Law Annex;
  3. The company (the employer) has obtained during the previous fiscal year and it has booked distinctively, the income being obtained exclusively from software creation activities;
  4. The yearly income mentioned at point 5 must be at least 10.000 euros* (calculated at the official monthly average foreign exchange rate) for each of the respective employees that are tax exempted.

* Exceptions to the fulfillment of this condition:

  • Companies set up during the fiscal year are exempted from fulfilling the required condition – for the year of establishment and for the following fiscal year;
  • Companies that have done a reorganization during the year are exempt from the condition – for the year in which the reorganization operation took place.

Required documents

The supporting documents relating to the classification of persons exempt from tax on salary income are:

  • The constitutive act, in the case of economic operators;
  • The employer’s organizational chart;
  • Job description;
  • A copy of the diploma awarded after the completion of studies in the university/long-term education, i.e. the copy with the mention “according to the original”, a diploma awarded after the completion of the first cycle of undergraduate studies, respectively the legalized copy the certificate of equivalence or recognition of a diploma issued by the specialized structures of the Ministry of National Education for the citizens of the Member States of the European Union, of the European Economic Area and of the Swiss Confederation;
  • The certificate of graduation of the university license issued by the higher education institution in the case, if the graduation diploma has not yet been issued;
  • A copy with the mention “according to the original” of the diploma of a baccalaureate, i.e. a certified copy of the certificate of equivalence or recognition of a diploma, issued by the specialized structures of the Ministry of National Education, for the citizens of the European Union Member States, of the European Economic Area and of the Swiss Confederation following the courses of an accredited higher education institution;
  • A certificate stating that the person is undergoing a higher education institution, if the employee holds the baccalaureate degree, possibly equaled/recognized but has not completed a short-term university studies or a long-term university studies or a first cycle licensing studies;
  • The copy with the words “according to the original” of the individual labor contract;
  • The payroll report drafted separately for employees benefiting from the exemption from tax on income from salaries and assimilated to salaries, provided in art. 60 pt. 2 of the Law no. 227/2015 regarding the Fiscal Code, as subsequently amended and supplemented;
  • The internal order, approved by the employer’s authorized management, which certifies the request to initiate the process of creating computer programs;
  • The analytical balance in which to reflect the distinct revenue from the computer program creation activity.  The file containing supporting documents shall be kept at the employer’s premises for inspection purposes. If the employer keeps the supporting documents in electronic format, they will be signed with a qualified electronic signature provided by an accredited service provider.

The file containing supporting documents shall be kept at the employer’s premises for inspection purposes. If the employer keeps the supporting documents in electronic format, they will be signed with a qualified electronic signature provided by an accredited service provider.

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