Law No. 135/2022 amending and supplementing certain legislative acts was published in the Official Gazette (Part I) No. 489 of 17 May 2022.
According to its provisions, employers in agriculture and the food industry will pay a differentiated gross minimum wage of 3,000 lei between June 2022 and December 2028, but will owe reduced wage taxes, similar to the construction sector.
The reduced payroll taxes are:
– exemption from income tax (at the rate of 10%),
– exemption from health contribution (10%),
– reduced pension contribution (from 25% to 21.25%, reduction of 3.75% – the part that goes to the private pension) and
– reduction of the labour insurance contribution (theoretically from 2.25% to 0.3375%) – this reduction of the labour insurance contribution is inapplicable in the construction sector, as a state aid scheme is needed to support it, and the same is likely to happen in the agriculture and food industry sectors.
The employers concerned by the above provisions 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 farming of animals);
016 activities auxiliary to agriculture and post-harvest crop activities;
CAEN code 10: Manufacture of food products.
Conditions for the application of the facilities:
– Employers must achieve a turnover from the above activities of at least 80% of the total turnover.
In the case of newly-established employers, i.e. those registered with the trade register/registered for tax purposes from June 2022 onwards, turnover is calculated cumulatively from the date of registration, including the month in which the exemption applies, and for existing employers as at 1 June 2022, turnover is calculated cumulatively from the beginning of the year, i.e. cumulatively from the date of registration in the case of those registered between the beginning of the year and 1 June 2022, including the month in which the exemption applies.
For existing employers, 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 shall be on a contract or order basis and shall cover labour, materials, machinery, transport, equipment, fittings and other ancillary activities necessary for the above activities. Turnover shall include production carried out and not invoiced.
– The facilities will apply to gross monthly incomes of between 3,000 and 30,000 lei, if the employees work full-time.
For amounts exceeding 30,000 lei per month, the usual payroll taxes will be calculated and paid.
The provisions of Law 135/2022 will apply as of June 2022 income, but an order of the Ministry of Finance is also needed to establish the procedure for implementing the new tax relief.