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Emergency Ordinance issued concerning HSSC
The Romanian Government has issued Emergency Ordinance no. 88/2013 regarding the approval of fiscal and financial measures, as well as for the amendment and completion of normative acts. Taxand Romania discovers how this Emergency Ordinance will affect taxpayers.
According to the new provisions, starting 1 January 2014, individuals deriving incomes from rental of goods are liable to pay health social security contributions (HSSC), irrespective whether they derive other types of income or not.
The Ordinance establishes the computation method for determining the HSSC taxable base for incomes derived from rental of goods, including incomes from rental of agricultural goods subject to withholding tax regime. The taxable base cannot be lower than the level of one minimum gross salary - when the income derived from rental of goods is the only income for which the contribution is computed – and cannot exceed the value of 5 gross average salaries.
Individuals deriving incomes from rental of goods, excepting those deriving incomes from rental of agricultural goods subject to withholding tax regime, are required to make quarterly prepayments representing health social security contributions. The payment is performed on a quarterly basis, in 4 equal instalments, by 25th of each last month of the quarter.
Income payers, in case of individuals obtaining incomes from rental of agricultural goods subject to withholding tax regime, are liable to compute, withhold and pay the amounts representing health social security contributions.
In addition to the above, according to the new provisions, the determination of HSSC for individuals obtaining incomes from renting, for touristic purposes, of rooms located within personal properties, is performed based on the tax assessment decision issued by the relevant tax authority; payment of the contribution shall be performed in 2 equal instalments; by 25 July and 25 November, inclusively.
Taxpayers need to review Emergency Ordinance no. 88/2013 in-depth to ascertain what consequences, if any, it will have on their taxable income. Special attention should be brought to the varying deadlines for payment as there will be repercussions for lack of or delayed payment.