Income from the provision of beauty/authority care activities, individually or in a form of association, is taxable income and, according to the Tax Code, falls under the category of income from self-employed activities.
Thus, natural persons who intend to obtain income from beauty/authority care activities can carry out their activity in the following forms of organization:
a) individually and independently, as authorised natural persons;
b) as sole proprietors of a sole proprietorship;
c) as members of a family business.
Any economic activity carried out permanently, occasionally or temporarily in Romania by authorised natural persons, sole proprietorships and family businesses must be registered and authorised, in accordance with Government Emergency Ordinance no.44/2008.
The authorization of operation does not exempt authorized natural persons, individual enterprises and family enterprises from the obligation to obtain, before starting the activity, the authorizations, permits, licenses and the like, provided for in special laws, for carrying out certain economic activities.
Natural persons who intend to obtain income from the provision of beauty/authority care activities are obliged to apply to the trade registry office of the court in the county where they establish their professional headquarters, for registration and authorization to operate, before the start of economic activity, as an authorized natural person, respectively as a sole proprietor of a sole proprietorship. The representative of the family business is obliged to apply for registration in the commercial register and authorization to operate before the commencement of economic activity.
Submission of the Single Declaration:
After registration in the Trade Register and authorization to operate, individuals are obliged to submit to the tax authority the single declaration on income tax and social contributions owed by individuals (form 212).
If individuals start their activity during the fiscal year, they must submit the single declaration within 30 days from the date of the event.
In the single tax return, the taxpayer will fill in Chapter II – Data on the tax on estimated income/income to be realized in Romania and social contributions due, through which taxpayers exercise their option to determine their net annual income:
– either on the basis of the income norms;
– or in real system, based on accounting data.
If the individual starts his/her activity in December of the tax year, he/she will submit the Single Declaration on income tax and social contributions due by individuals – Chapter I. Data on income earned up to and including 25 May of the year following the tax year.
If the annual net income from self-employed activities is determined on the basis of income norms, the income norms 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.
It is important to point out that the annual income norms are available on the ANAF portal, www.anaf.ro, section “Taxpayer assistance”.
If the activity is carried out over periods shorter than the calendar year, the income norm relating to the activity is reduced proportionally to reflect the period of the calendar year in which the activity was carried out.
If the taxpayer ceases activity during the year, i.e. the activity is temporarily interrupted, the taxpayer has the obligation to submit to the tax authority, within 30 days of the event, the single tax return on income tax and social contributions due by individuals – Chapter II – Data on tax on estimated income / income to be earned in Romania and social contributions due and to recalculate the income tax.
If the net income is determined on the basis of income norms, but in 2023 the gross annual income is higher than the RON equivalent of 25.000 euro, starting with the next tax year the taxpayer will have the obligation to determine the net annual income in the real system.
The exchange rate to be used to determine the RON equivalent of 25,000 euro is the average annual exchange rate communicated by the National Bank of Romania at the end of the fiscal year.
In this situation, the taxpayer will fill in the appropriate form and submit to the tax authority the single declaration on income tax and social contributions due by individuals – Chapter II. Data concerning the tax on the estimated income/type of income to be realized in Romania and the social contributions due up to and including 25 May of the year following the year in which the income was realized.
Income tax payment deadline
Payment of the tax shall be made to the state budget up to and including 25 May of the year following the year in which the income was earned.
If the taxpayer opts for the determination of net income on the basis of income rules, he has the obligation to complete the Tax Register, only in the part related to income and has no obligations regarding accounting.
Social insurance contribution (CAS):
For income from self-employed activities, the taxpayer shall pay the social security contribution if he estimates for the current year income from self-employed activities and income from intellectual property rights, from one or more sources and/or categories of income, the cumulative value of which is at least equal to 12 gross minimum wages per country, in force at the deadline for submission of the Single Tax Return on income tax and social contributions due by individuals – Chapter II. Data on tax on the estimated income/income to be earned in Romania and social contributions due.
The annual basis for calculating the social insurance contribution, in the case of persons earning income from self-employment, is the income chosen by the taxpayer, which may not be less than:
a) the level of 12 gross minimum wages per country, in force on the deadline for submission of the single return on income tax and social contributions due by individuals – Chapter II. Data on tax on estimated income/type of income to be earned in Romania and social contributions due, in the case of income earned between 12 gross minimum wages per country inclusive and 24 gross minimum wages per country;
b) the level of 24 gross minimum wages per country, in force on the deadline for submission of the single declaration on income tax and social contributions payable by individuals – Chapter II. Data on tax on estimated income/standard of income to be realised in Romania and social contributions payable, in the case of realised income at least equal to 24 gross minimum wages per country.
The social insurance contribution is calculated by applying the rate of 25% to the annual calculation base.
Health insurance contribution (CASS):
For income from self-employed activities, the taxpayer shall pay the health insurance contribution if he estimates for the current year income from self-employment, from intellectual property rights, from associations with legal persons, from the transfer of the use of goods, from agricultural, forestry and fish farming activities, from investments and income from other sources whose cumulative value is at least equal to 12 gross minimum wages per country, and is obliged to submit the Single Declaration on income tax and social contributions due by individuals – Chapter II. Data on the tax on the estimated income/income to be earned in Romania and social contributions due.
The annual basis for calculating the health insurance contribution is:
a) the level of 6 gross minimum wages per country, in force on the deadline for submission of the Single Return on income tax and social contributions due by individuals – Chapter II. Data on the tax on the estimated income/type of income to be realised in Romania and social contributions due, in the case of realised income between 6 gross minimum wages per country inclusive and 12 gross minimum wages per country;
b) the level of 12 gross minimum wages per country, in force on the deadline for submission of the single return on income tax and social contributions due by individuals – Chapter II. Data concerning the tax on the estimated income/type of income to be earned in Romania and the social contributions due, in the case of income earned between 12 gross minimum wages per country inclusive and 24 gross minimum wages per country;
c) the level of 24 gross minimum wages per country, in force on the deadline for submission of the single return on income tax and social contributions due by individuals – Chapter II. Data concerning the tax on the estimated income/type of income to be earned in Romania and the social contributions due, in the case of income earned at least equal to 24 gross minimum wages per country.
The health insurance contribution is calculated by applying the rate of 10% to the annual calculation base.
Deadline for payment of social security contributions è up to and including 25 May of the year following the year for which the contribution is due.
Legal basis:
– www.anaf.ro
– Fiscal Code (approved by Law no.227/2015, published in the Official Gazette no.688 of 10.09.2015), as amended and supplemented.