Individuals who intend to make or already make individually income from the provision of services representing tuition, are required to register with the National Office of the Trade Register and apply for authorization to operate, under the conditions provided for by the EMERGENCY ORDINANCE no.44/2008, in the following forms of organization:
– individually and independently, as authorised natural persons;
– as sole proprietors of a sole proprietorship;
– as members of a family business.
The National Trade Register Office (ONRC) of the court will issue the registration certificate, containing the unique registration code.
After registration with the ONRC, the individual who obtains income from tutoring also has tax obligations – declaration and payment obligations in terms of income tax and social contributions.
Submission of Single Declaration (form 212):
If the activity starts during the tax year, the natural person shall submit the single tax return within 30 days from the date of the event.
If the FP starts its activity in December of the tax year, the individual will submit the single tax return “Chapter I. Data on income earned” by 25 May of the year following the tax year.
It is worth mentioning that when filling in the Single Tax Return, the taxpayer estimates the income that will be obtained in the year of starting the activity and exercises the option to determine the annual net income:
- either on the basis of the income rules;
- or in the real system, on the basis of accounting data
Determination of annual net income based on income rules:
If the annual net income from self-employed activities is determined on the basis of the income rules, the income rules of the place of activity shall be used to determine it.
The tax is calculated by applying the rate of 10% to the income norm or to the adjusted income norm, as the case may be.
The annual income norms for the year 2022, established for self-employed activities, according to article 69 of Law no. 227/2015 on the Fiscal Code, as well as the correction coefficients are available on the website of the National Agency for Fiscal Administration (ANAF), in the section Assistance for taxpayers/Tax liability declarations/Income norms, for each county:
https://static.anaf.ro/static/10/Anaf/AsistentaContribuabili_r/Normevenit2022/Norme_venit_2022.html
We emphasize that the Ministry of Public Finance (MFP) draws up the nomenclature of activities for which the net income can be determined on the basis of the annual income rules, which is approved by order of the Minister of Public Finance, in accordance with the activities in the Classification of Activities in the National Economy – CAEN.
We find in the Annual Income Norms for the year 2022 under position 104 CAEN 8559 “Other forms of education” for the independent activity – Services performed by tutors.
If the tutoring activity is carried out for periods shorter than the calendar year, the income norm for that activity is reduced proportionally.
If an individual carries out two or more activities that generate income from self-employment (production, trade and service activities), the net income from these activities is determined by the taxpayer by adding together the level of the income rules corresponding to each activity.
If an individual carries out an activity included in the classification and another self-employed activity, the annual net income is determined in the real system, based on accounting data.
Taxpayers for whom the net income is determined on the basis of income rules and who in the previous tax year recorded a gross annual income greater than the equivalent in lei of the amount of 100,000 euro, starting with the next tax year are obliged to determine the net annual income in the real system.
Please note that the RON equivalent of the 100,000 euro limit is calculated using the average annual exchange rate communicated by the NBR at the end of the fiscal year.
It is very important to note that the annual income rules can be adjusted in the single declaration.
The adjustment of the annual income norms is made by the taxpayer by applying the correction coefficients published by the Regional General Directorates of Public Finance (employee status, age, degree of disability, rented space, students, if applicable).
The correction coefficients are mentioned in the annual income rules and can be either increased or reduced.
If the activity ceases during the year/is temporarily interrupted, the taxpayer is obliged to submit to the tax authority a Single Tax Return – Chapter II – Data on the tax on the estimated income/income norm to be realized in Romania and the social contributions due and to recalculate the income tax, within 30 days from the occurrence of the event.
Taxpayers who determine the annual income on the basis of the income rules are not obliged to keep accounting records, but instead they are obliged to complete the Tax Register only on the income side.
Determination of annual net income in real system:
The annual net income from self-employed activities is determined in the real system, on the basis of accounting data, as the difference between gross income and deductible expenses incurred for the purpose of generating income.
Gross income mainly comprises the amounts received and the lei equivalent of income in kind obtained from the activity.
According to Article 68, paragraph (4) of the Fiscal Code and point 7, paragraph (5) of the rules for the application of the FC, the main general conditions that must be met by expenses incurred for the purpose of self-employment in order to be deductible, depending on their nature:
- be carried out in the framework of independent activities, justified by documents;
- be included in the expenditure of the financial year in which they were paid;
- comply with depreciation rules;
- are incurred for the purpose of the activity and regulated by the regulations in force.
Please note that article 68 paragraph (5) of the CF provides for expenses with limited deductibility. Non-deductible expenses are provided for in article 68 paragraph (7) of the Fiscal Code.
Declaration of estimated annual net income and calculation of income tax:
According to the current provisions, the taxpayer has the obligation to estimate the annual net income for the current tax year, and to establish the estimated annual tax, by filing the D.U. – Chapter II:
- by 25 May inclusive of the year in which the income is realised;
- within 30 days from the date of commencement of activity – if they start their activity during the tax year.
The tax is determined by applying the rate of 10% on the estimated annual net income considered as taxable income.
If the activity ceases during the year/is temporarily interrupted, the taxpayer is obliged to submit to the tax authority the Single Tax Return – Chapter II – Data on the tax on the estimated income/income to be realized in Romania and the social contributions due and to recalculate the income tax, within 30 days from the occurrence of the event.
Declaration of annual net income and determination of annual tax due:
The taxpayer is obliged to declare the annual net income and to determine the annual tax due by filling in the D.U. – Chapter I – Data on income earned up to and including 25 May of the year following the year in which the income was earned.
After the end of the year:
– Annual net income is recalculated, if necessary, by deducting tax losses carried forward;
– from the recalculated net annual income, deduct, where appropriate, the social security contributions due and obtain the net annual taxable income;
– the annual tax due shall be determined by applying the rate of 10% to the net annual taxable income – payment deadline up to and including 25 May of the year following the year in which the income was earned.
Mandatory registers in the case of the establishment of the annual income in real system:
- Register of receipts and payments – chronologically record all amounts received and paid both in cash and through bank accounts, based on supporting documents;
- Inventory register – all goods, rights and obligations related to the activity are recorded, representing the business assets;
- Tax register – to establish the annual net income or annual net loss and to complete the D.U.
It is completed annually with the total income and expenses incurred for the purpose of their realization in the current year for the entire period of activity carried out in the previous fiscal year, by the date of submission of the D.U. but not later than May 25.
The data filled in must correspond to those contained in the DU and in any other corrective declaration submitted subsequently.
Only the annual deductible expenses must be entered, which must correspond to those entered in the DU.
It is important to note that it can be kept in written or electronic form in compliance with the model provided in OMF no.3254/2017.
It is kept at the tax domicile either in written or electronic form.
Declarative tax obligations – social contributions:
For income from self-employment, which includes income from tuition, it is due according to the level of income:
- Social insurance contribution (CAS) – 25% rate
The social security contribution (CAS) is due if the person estimates income from tuition (adjusted annual income norm or net annual income), cumulated, as the case may be, with other net income from self-employment and/or income from intellectual property rights, at least equal to 12 gross minimum wages per country, in force at the deadline for submission of the estimated single declaration:
– for the year 2022: minimum gross salary 2.550 lei -> limit 12 months x 2.550 lei = 30.600 lei CAS = 25% x chosen income (which cannot be less than 12 months x minimum salary)
– for the year 2022: 25% x minimum 30.600 lei=minimum 7.650 lei
We mention that pensioners and individuals insured in their own social insurance systems (lawyers, notaries, military personnel) who are not obliged to be insured in the public pension system do not owe CAS.
If the estimated income does not fall within the limit , individuals may opt to pay the CAS for the current year under the same conditions as for individuals who estimate their annual income to be above the limit .
The deadline for payment è 25 May of the year following the year in which the income was earned.
The social security contribution (CASS) is due if the person earns income from tuition (adjusted annual income norm or net annual income), cumulated, as the case may be, with other net income from self-employment and/or income from intellectual property rights, association with a legal person, transfer of use of goods, investments, agricultural, forestry and fish farming activities and other sources at least equal to 12 gross minimum wages per country, in force on 25 May of the year of income.
- for the year 2022: minimum gross salary 2.550 lei -> limit 12 months x 2.550 lei = 30.600 lei CASS = 10% x 12 gross minimum wages per country
- for 2022: 10% x 30.600 lei = 3.060 lei
Important! CASS is due, depending on the limit , regardless of whether the person is an employee or a pensioner.
If the estimated income does not fall within the limit , the person can opt for insurance under the social health insurance system for the current year by submitting the DU.
- CASS due = 10% x 6 minimum gross basic salaries per country – if the declaration is submitted by 25 May of the year of income;
- CASS due = 10% x the number of months remaining until 25 May of the year following the year of income – if the declaration is submitted after 25 May of the year of income.
The deadline for payment è 25 May of the year following the year in which the income was earned.
Value Added Tax (VAT):
Taxpayers, natural persons, who intend to make or already make individually income from the provision of services representing tuition (other than teachers in the field of school, pre-university and university education), are obliged to keep accurate and complete records of all operations carried out in the course of their activity with the help of the Sales Journal and the Purchase Journal and are registered for VAT purposes in the following situations:
- by option;
- when exceeding the exemption threshold of 300,000 lei provided for in the Fiscal Code;
- when making intra-Community purchases, providing or receiving services to/from EU taxable persons.
Please note that private tutoring by teachers in the field of school, pre-university and university education is exempt from value added tax.
Legal basis:
– Law no. 227/2015 on the Fiscal Code, with subsequent amendments and completions; The incomes obtained from meditations are assimilated to the incomes from independent activities and are treated in the Fiscal Code at Title IV, CHAPTER II – Incomes from independent activities.
– GOVERNMENT DECISION 1/2016 for the approval of the methodological norms for the application of Law no. 227/2015 on the Fiscal Code, with subsequent amendments and completions; – OPANAF no.2127 / 2021 of December 30, 2021 for the approval of the model, content, method of submission and management of form 212 “Single declaration on income tax and social contributions due by individuals”;
– EMERGENCY ORDINANCE no. 44/2008 regarding the development of economic activities by the authorized natural persons, the individual enterprises and the family enterprises, with the subsequent modifications and completions;
– OMFP no.3254 / 2017 regarding the Register of fiscal evidence for natural persons, taxpayers according to title IV of Law no. 227/2015 regarding the Fiscal Code;
– GOVERNMENT DECISION no. 65/1997 regarding the approval of the Classification of activities in the national economy – CAEN;
– EMERGENCY ORDINANCE no. 28/1999 republished, regarding the obligation of economic operators to use fiscal electronic cash registers.