In the Official Gazette (Part I) no.489 of 17 May 2022, Law no.135/2022 for amending and supplementing some normative acts.
Thus, according to Law no.135/2022, employers in agriculture and the food industry will pay, between June 2022 and December 2028, a differentiated minimum gross wage of 3,000 lei, but will owe reduced payroll taxes.
We point out that until now, such a differentiated minimum wage and reduced payroll taxes existed only in the construction sector.
Specifically:
- exemption from income tax (at the rate of 10%),
- exemption from health contribution (10%),
- reduction of pension contribution (from 25% to 21.25%, reduction of 3.75% – the part that goes to the private pension) and
- reduction of the insurance contribution for work (theoretically from 2.25% to 0.3375%).
We mention that the targeted employers are those operating using the following CAEN codes:
-CAEN code 01: agriculture, hunting and related service activities:
011 growing of non-perennial crops;
012 growing of perennial crops;
013 growing of plants for propagation;
014 animal husbandry;
015 mixed farming (growing of crops combined with rearing of animals);
016 activities auxiliary to agriculture and post-harvest activities;
-CAEN code 10: food industry.
Application of facilities – conditions:
In order to be eligible for the above-mentioned facilities, employers will have to achieve a turnover from the above-mentioned activities of at least 80% of the total turnover.
In the case of newly established employers, i.e. registered with the trade register/tax registered from June 2022, the turnover is calculated cumulatively from the date of registration, including the month in which the exemption is applied, and for existing employers on 1 June 2022 it is considered as the basis of calculation, cumulative turnover from the beginning of the year, or cumulative turnover from the date of registration in the case of those established/registered between the beginning of the year and 1 June 2022, including the month in which the exemption applies. For employers in existence on 1 January of each year after 1 June 2022, turnover from the above activities is calculated cumulatively for the corresponding period of the current year, including the month in which the exemption applies.
This turnover is based on a contract or order and covers labour, materials, machinery, transport, equipment, fittings and other ancillary activities necessary for the above activities. It is important to note that turnover will include production realised and not invoiced.
Secondly, the facilities will apply to gross monthly incomes between 3,000 and 30,000 lei, if employees work full time (i.e. eight hours a day and 40 hours a week). For amounts exceeding 30,000 lei, the usual payroll taxes will be calculated and paid. The facilities are to be applied according to a procedure given by an order of the Ministry of Finance, to be issued by 16 June 2022 (within 30 days of the publication of the new law).
According to the new provisions, employees will be exempted from the part of the pension contribution that now goes to the compulsory private pension, but they will be able to opt for continued payment into the private pension by submitting an application to their employer. Although they will be exempt from paying health contributions, employees will be insured under the national health system, including for sick leave and occupational risks.
At the same time, the reduction of the insurance contribution for work will mean that the employer will pay only the part that goes to the State for the Guarantee Fund for the payment of wage claims, but the employees will be automatically insured for unemployment.
It is important to recall that this reduction of the labour insurance contribution is inapplicable in the construction sector, as a state aid scheme is needed to support it, so the same treatment could be given to the facility for the agriculture and food industry sectors.
We remind you that the provisions of Law 135/2022 apply from the income related to June 2022, but an order of the Ministry of Finance is needed to establish the procedure for implementing the new tax facilities.
Legal basis:
– The Fiscal Code of 2015 (Law 227/2015), with subsequent amendments and completions;
– Law 135/2022 for the amendment and completion of some normative acts.