Situation:
An employee in the position of a programmer assistant in a commercial company that meets the conditions for exemption from payroll tax for its employees does not receive tax exemption on the grounds that he did not graduate from a higher education institution with a technical profile, but from a university with a human profile.
The question is whether this employee is entitled to exemption from payroll tax?
Solution:
According to article 60, point 2 of Law no. 227/2015 on the Tax Code, individuals are exempt from income tax for income from salaries and similar income referred to in article 76 paragraphs (1) – (3), as a result of carrying out the activity of creating computer programs, under the conditions established by joint order of the Minister of Communications and Information Society, the Minister of Labour and Social Justice, the Minister of National Education and the Minister of Public Finance no. 20463/3964/967/1415/2023 on the classification of the activity of software creation.
According to article 1 paragraph (1) of this order, it is specified that employees of economic operators operating on the territory of Romania, whose object of activity includes the creation of computer programs (CAEN codes 5821, 5829, 6201, 6202, 6209), benefit from tax exemption on income from wages and salaries, if the following conditions are met cumulatively:
a) the posts on which they are employed correspond to those on the list of occupations and activities set out in sections 1 and 2 of the Annex;
b) the post is part of a department whose activity is in at least one of the following areas, highlighted in the employer’s organisation chart: information and communication technology, artificial intelligence and emerging digital technologies, electronic tax administration, databases, e-government services and digital transformation;
c) they hold a bachelor’s degree from a long or short higher education institution or from the first cycle of bachelor’s degree studies, issued by an accredited higher education institution, or they hold a baccalaureate degree and are attending an accredited higher education institution and actually perform one of the activities listed in the Annex;
d) the employer has realized in the previous fiscal year and has recorded separately in the analytical balances income from the activity of creating computer programs for commercialization;
e) the annual income referred to in letter d) has a value that represents at least the equivalent in lei of 10,000 euro (calculated at the average monthly exchange rate communicated by the National Bank of Romania, for each month in which the income was recorded) for each employee benefiting from the exemption from income tax.
Therefore, the income tax exemption is granted if all the above-mentioned conditions are cumulatively met.
According to Article 4 paragraph (1) of MCID Order 20463/2023 on the classification of the activity of creating computer programs, the supporting documents to be taken into account when classifying persons exempt from the payment of tax on income from salaries and assimilated salaries, in accordance with the provisions of Law no. 227/2015 on the Fiscal Code, as amended and supplemented, according to the specific occupations and activities provided in the annex, are: (…)
c) the job description or any other legal document establishing the employee’s duties;
d) a copy with the original attestation of the degree obtained after the completion of a long or short term higher education or after the completion of the first cycle of undergraduate studies, respectively a copy with the original attestation of the document of equivalence or recognition of the degree, issued by the specialized structures of the Ministry of Education, for employees who are natural persons;
e) the certificate of graduation from the undergraduate studies, issued by the higher education institution in question, if the graduation diploma has not yet been issued, respectively the copy with the original attestation of the document of equivalence or recognition issued by the specialized structures of the Ministry of Education, for employees who are natural persons;
f) a copy with the original attestation of the baccalaureate diploma, respectively a copy with the original attestation of the certificate of equivalence or recognition of the diploma, issued by the specialized structures of the Ministry of Education, including for employees who attend courses in an accredited higher education institution;
g) a certificate attesting that the person is attending a higher education institution, if the employee holds a baccalaureate diploma, and the document of equivalence or recognition, if applicable, but has not graduated from short university studies or long university studies or the first cycle of undergraduate studies. The certificate shall include the following: the university, the normative act by which the university was accredited, the faculty, the study programme, the form of education, including the year of study followed at the date of the application, the school situation, so as to prove the student status, according to the legal provisions in force;
h) a copy of the original diploma supplement, requested by the employer, in order to exclude periods of interruption of education from the tax exemption, if these interruptions were not declared by the beneficiary of the exemption, if the employee holds a baccalaureate diploma and the document of equivalence or recognition, as the case may be, but has not graduated from a short or long university course or from the first cycle of undergraduate studies, upon completion of a diploma course at an accredited higher education institution;
i) a copy of the individual employment contract or of any legal act of the head of the public institution on the basis of which the service/work relationship is exercised, with the original attestation; (…)
We note that the above-mentioned provisions do not condition the appointment to a post for which the exemption is granted to the fulfilment of certain conditions of specialization.
The condition imposed in the legal regulations is that the person in question must hold a diploma awarded after completion of a long-term higher education course (a specific profile is not specified) or a short-term higher education course, or hold a diploma awarded after completion of the first cycle of university studies, issued by an accredited institution of higher education or hold a baccalaureate diploma and attend the courses of an accredited institution of higher education (proved by a certificate) and actually perform one of the activities specified in the annex to the order. The legislation does not specify a specific profile, e.g. technical.
It is also important to point out that the Romanian Classification of Occupations does not make the position of programmer (COR 351201) conditional on the existence of studies in a certain speciality.
The requirements for a position are established by the employer taking into account the provisions of the COR (Classification of Occupations in Romania), as well as special regulations establishing minimum educational levels for certain positions.
If there are no legal provisions that expressly establish the studies required to perform a function/job, then the nature of the studies will be determined by the employer according to the duties to be performed by the person according to the job description.
Therefore, at present, the tax exemption is granted to persons who actually perform one of the activities of creating computer programs corresponding to the specific occupations mentioned in the annex to the order if the other conditions provided by the order are fulfilled.
In conclusion, the order does not impose certain specialisations for the income tax exemption. The persons in question must be graduates of higher education and have the necessary knowledge to perform the functions provided for in the order.
In view of the case in question, a graduate with a higher education in the humanities may benefit from the income tax exemption if he is employed as a programmer assistant (COR 351201), provided that the other conditions imposed by the order are met.
Legal basis:
– MCID Order 20463/2023 on the classification of the activity of software creation;
– Fiscal Code (approved by Law no. 227/2015, published in MO no. 688 of 10.09.2015), as amended and supplemented;
– Methodological Norms for the application of the Tax Code (approved by Government Decision no. 1/2016).