Ministry of Finance (MF) Order no.4433 on the classification of the activity of software creation was published in the Official Gazette (Part I) no.1252 of 23 December 2022.
According to the normative act, the income tax exemption applicable to IT-ists is extended by the authorities from 1 January 2023.
Thus, more people benefit from the tax facility given specifically for the creation of computer programs.
Please note that the provisions of Order 4433/2022 apply from the income related to the first month of 2023, replacing, with some modifications, the old rules of income tax exemption for IT-ists.
A novelty offered by the recently approved order is that also employees of public institutions benefit from the income tax exemption for the period they create computer programs.
According to the new document, a new occupation appears in the list of occupations covered by the income tax exemption, namely software development engineer. According to the description in the new act, this newly introduced occupation refers to activities of analysis and evaluation of requirements for existing or new computer applications and operating systems (design, development, testing and maintenance of software solutions to meet these requirements).
Note that the other occupations on the list covered by the facility remain the same.
LIST of occupations specific to software development activities
crt.No. | SECTION 1 | SECTION 2 |
Occupation | Description of the activity | |
1 | Database administrator | Activities to provide specialist expertise and practical assistance in the management of database systems and in the use of IT data to meet the requirements of the IT system at any point in its lifecycle, in accordance with defined quality criteria |
2 | Analyst | Analysis activities in order to define specifications for the actual construction of information systems, likely to meet users’ requirements |
3 | Information systems engineer | Activities combining analytical and design skills with appropriate knowledge of software and hardware technology, in order to define, design, build, test, implement and modify information systems containing software as the main component |
4 | Software systems engineer | Activities of adapting and/or harmonising hardware, software and operating system solutions and existing or designed applications to actual or expected user requirements, in order to meet the requirements of the degree of demand (response time) |
5 | IT Project Manager | Coordination activities of major IT application specific development systems, including staff coordination and tracking of project requirements (information/data required, programming, analysis). Project managers develop, plan, analyse, estimate and prioritise the components to be implemented, as well as project phases and deadlines |
6 | Programmer | Activities to produce computer programs according to predefined specifications and assemble them into coherent systems, including testing to ensure compliance with specifications |
7 | Information systems designer | Activities combining analytical and design skills based on specialist knowledge with knowledge in the use of software tools or programming languages to produce and implement functional solutions that meet predefined requirements or organisational needs |
8 | Computer system programmer | Activities combining analytical and design skills with appropriate knowledge of software and hardware technology, in order to define, design, build, test, implement and modify information systems containing software as the main component |
9 | Help programmer | providing technical support for the development of computer programs according to predefined specifications and assembling them into coherent systems, including testing to ensure compliance with specifications |
10 | Help Analyst | Technical support activities for the analysis to define specifications for the actual construction of computer systems, likely to meet user requirements |
11 | Software Product Development Engineer | Activities to analyze and evaluate requirements for existing or new IT applications and operating systems: design, development, testing and maintenance of software solutions to meet these requirements |
Conditions for applying the income tax exemption:
According to the normative act, the employees of economic operators who carry out their activity on the territory of Romania in accordance with the legislation in force, whose object of activity includes the creation of computer programs (CAEN code 5821, 5829, 6201, 6202, 6209), benefit from the exemption from to the payment of the tax on income from wages and incomes assimilated to wages, provided for in art. 60 point 2 of Law no. 227/2015 on the Fiscal Code, with subsequent amendments and additions, if the following conditions are cumulatively met:
a) the positions they are employed on correspond to the list including the occupations and activities mentioned in the annex, sections 1 and 2;
b) the position is part of a specialized IT department, highlighted in the employer’s organization chart, such as: direction, department, office, service, office, department or similar;
c) hold a diploma awarded after completing a long-term or short-term form of higher education, or hold a diploma awarded after completing the first cycle of undergraduate university studies, issued by an accredited higher education institution, or hold a baccalaureate diploma and follows the courses of an accredited higher education institution and effectively performs one of the activities provided in the annex;
d) the employer realized in the previous fiscal year and recorded separately in the analytical balances income from the activity of creating computer programs intended for sale;
e) the annual income provided for in letter d) has a value of at least the equivalent in lei of 10,000 euros (calculated at the average monthly exchange rate communicated by the National Bank of Romania, related to each month in which the income was recorded) for each employee who benefits from the income tax exemption.
Important mention:
The companies that are established during the fiscal year and the companies that during the year were the subject of a reorganization according to the law, in order to benefit from the mentioned fiscal facility, are exempted from fulfilling the condition stipulated in letter d), for the year of establishment and for the fiscal year following, respectively for the year in which the reorganization operation took place.
Justifiyng documents:
We specify the fact that, in the MF Order 4433/2022, there are adjustments regarding the supporting documents that must be taken into account when classifying persons exempt from income tax, by reference to the occupations covered by the order. Thus, the supporting documents that are considered for the inclusion of persons exempted from paying the tax on income from wages and assimilated to wages, in accordance with the provisions of Law no. 227/2015 on the Fiscal Code, with subsequent amendments and additions, according to the specific occupations and activities provided in the annex, are:
a) the constitutive act, in the case of economic operators;
b) organization chart of the employer;
c) job description;
d) the copy with the mention “in accordance with the original” of the diploma awarded after the completion of studies in long/short-term university education, respectively the copy with the mention “in accordance with the original” of the diploma awarded after the completion of the first cycle of undergraduate university studies, respectively the copy with the mention “in accordance with the original” of the diploma equivalency or recognition document, issued by the specialized structures of the Ministry of Education, for natural person employees (the novelty: the legalized copy of the diploma equivalency or recognition certificate is replaced by the copy conforming to the original of the document of equivalency or recognition of the diplom);
e) certificate of graduation from undergraduate university studies, issued by the higher education institution in question, if the graduation diploma has not yet been issued, respectively the copy with the mention “in accordance with the original” of the equivalence or recognition document issued by the specialized structures of the Ministry of Education, for natural person employees (the mention regarding the copy conforming to the original of the equivalence or recognition document is completely new);
f) the copy with the mention “in accordance with the original” of the baccalaureate diploma, respectively the copy with the mention “in accordance with the original” of the certificate of equivalency or recognition of the diploma, issued by the specialized structures of the Ministry of Education, including for employees attending the courses of an institution of accredited higher education (the novelty is the replacement of the legalized copy of the certificate of equivalency or recognition of the diploma with a copy conforming to the original);
g) the certificate attesting to the fact that the person follows a form of higher education, if the employee holds a baccalaureate diploma, and the equivalence or recognition document, if applicable, but has not completed short-term university studies or university studies of the long duration or the first cycle of undergraduate studies. The certificate will specify the following: the university, the normative act by which the university was accredited, the faculty, the study program, the form of education, including the year of studies followed at the time of the request, the school situation, so as to prove the quality of a student, according to the legal provisions in force (the special mentions regarding the content of the certificate are completely new);
h) if the employee holds the baccalaureate diploma and the equivalency or recognition document, if applicable, but has not completed short-term university studies or long-term university studies or the first cycle of undergraduate studies, upon completion with the diploma of the courses of an accredited higher education institution, the employer will request the copy with the mention “in accordance with the original” of the diploma supplement, in order to exclude periods of school interruptions from the granting of tax exemption, if these interruptions were not declared by the beneficiary of the exemption (the provisions are newly introduced);
i) the copy with the mention “in accordance with the original” of the individual employment contract/administrative act of the head of the public institution on the basis of which the service report/work report is exercised (the specification regarding the administrative act is new);
j) the pay statement drawn up separately for employees who benefit from the income tax exemption;
k) the internal order, approved by the authorized management body of the employer, which certifies the request to initiate the process of creating computer programs;
l) the analytical balance in which the revenues from the activity of creating computer programs are reflected distinctly.
In the case of employees from public institutions, the supporting documents considered are those from points b-j in the list. In addition, the document/documents attesting the initiation and duration of the process of creating computer programs, approved by the competent management body of the employer, are added to the list.
Legal basis:
– Fiscal Code (approved by Law no. 227/2015, published in MO no. 688 of 10.09.2015), with subsequent amendments and additions;
– Methodological norms for the application of the Fiscal Code (approved by HG no. 1/2016); – MF Order no. 4433/2022 regarding the inclusion in the activity of creating computer programs;
– MFP order no. 3337/2017 regarding the inclusion in the activity of creating computer programs.