Situation: A company operating in the construction sector and benefiting from tax facilities intends to grant Christmas bonuses exceeding the 300 lei limit.
What is the tax treatment for amounts exceeding the 300 lei limit?
Solution:
According to the Tax Code, article 76 paragraph (4), the following incomes are not taxable, in the sense of income tax:
- a) funeral aids, aids for serious and incurable diseases, aids for medical devices, aids for childbirth/adoption, aids for losses in one’s own household due to natural disasters, income representing gifts in money and/or in kind, including gift vouchers, offered to employees, as well as those offered for their minor children, the cost of transport to and from the employee’s place of work, the cost of tourist and/or treatment services, including transport, during holidays, for own employees and their family members, provided by the employer for own employees or other persons, as provided for in the employment contract or internal regulations.
Income of the nature mentioned above, earned by individuals, is not taxable, if such income is received on the basis of special laws and/or financed from the budget, with the exception of holiday allowances granted in accordance with the law.
In the case of gifts in cash and/or in kind, including gift vouchers, offered by employers, the income is not taxable to the extent that its value for each person, on each of the following occasions, does not exceed 300 lei:
(i) gifts given to employees, as well as those given to their minor children, on the occasion of Easter, Christmas and similar holidays of other religious denominations;
(ii) gifts given to female employees on the occasion of 8 March;
(iii) gifts given to employees for the benefit of their minor children on 1 June.
The same provision is also found in Article 142(b) of the Tax Code as regards social contributions.
From the point of view of CASS, according to Article 157 paragraph (2), the amounts provided for in Article 76 paragraph (4) letter d), Article 141 letter d) and Article 142 are not included in the monthly basis for calculating the social health insurance contribution.
Therefore, gifts offered to employees and minor children at Christmas, in the amount of 300 lei/person, are not taxable and taxable with income tax and social security contributions if their granting is mentioned in the employment contract (individual or collective) or in the internal regulation.
We underline the fact that this tax treatment is a facility granted to employees in any field of activity.
Provided that the gift exceeds 300 lei and is granted by an employer in the construction sector, what exceeds this amount follows the tax treatment of wage income in the construction sector.
If the employer applies the facilities, the amount exceeding 300 lei (or the entire amount if not regulated by the employment contract or internal regulation) is granted with facilities (21.25% CAS and CAM 2.25%).
Please note that if the gross income exceeds 10.000 lei, no facilitations are granted for what exceeds 10.000 lei.
Legal basis:
-Fiscal Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), with subsequent amendments and additions;
-Methodological Norms for the application of the Tax Code (approved by HG no.1/2016).