Romania: Tax amnesty bill following reassessment of daily allowances

Following intensive negotiations between the business community and the Romanian government, the Romanian parliament has issued a bill on the enforcement of a tax amnesty for tax liabilities, including late payment interest and penalties, imposed by the tax authorities following the reassessment of daily allowances as salary income.

The main companies affected by this reassessment are those in the construction and international transport sectors and temporary work agencies.

The tax amnesty is intended to apply to all tax liabilities imposed by the tax authorities following the reassessment from 1 July 2015 until now.

The tax amnesty will target unpaid tax liabilities and tax debts already paid by companies, in which case the companies will be refunded if they submit a written request.

The tax amnesty will be applied automatically by the tax authorities without the need for companies to make a special request to benefit from it, as decisions will be issued to cancel the tax debts and these will be communicated to companies.

The bill also provides clarifications on the tax treatment of daily allowances with a view to avoiding a future reassessment:

• Primarily, the new tax regulations will make explicit reference to the delegation allowance, the secondment allowance and the transnational secondment allowance.
• A new deductibility threshold (at the level of the company) and non-taxable threshold (at the level of the employee) of 3 base salaries for external daily allowances will be implemented. 
• The tax authorities will be able to perform a reassessment of the daily allowances based only on the findings of the Labour Inspectorate.

We reiterate that this is merely a bill which still needs to go through the entire legislative process to be approved and amendments may be made.